Burger King to Spend $400 Million on Advertisement, Store Revamps

Photo Credit: Burger King

Burger King, a fast food restaurant chain, said it would spend more than $400 million on renovations and advertising over the next two years. The choice was made in response to a corporation report showing low sales in the United States.

The executives of Burger King met in Las Vegas to evaluate the company’s plan to turn around its US-based franchises. The parent company of the fast food chain, Restaurant Brands International, finalized the strategy with the help of its brands during the annual franchisee convention. The firm expects the projected investment to start bringing in money by 2025.

Burger King reported flat sales for the second quarter. The fact that the fast food restaurant falls short of Wendy’s and McDonald’s only serves to highlight the need for a sales boost for the business. Jose Cil, the CEO of Restaurant Brands, expressed worry about Burger King’s operations.

As the firm’s chief executive, Cil has been committed to investing in projects that would boost the sales of the company’s brands, notably the resurrection of Tim Hortons, a Burger King-affiliated franchise. Tom Curtis, a former Domino’s Pizza executive, was also given the responsibility of leading Burger King in the US and Canada by Cil. With Curtis on board, Cil made a number of modifications to the business’ drive-thru capabilities and urged patrons to utilize the Burger King mobile app.

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Changes for Burger King on the way

Burger King is expected to undergo significant changes in the following years. More than 800 outlets will be renovated and improved around the country with a $200 million investment from the corporation. In addition, a $50 million budget has also been set aside for technological upgrades, culinary equipment upgrades, and other relevant adjustments. With more than 7,000 locations nationwide, Burger King’s management strives to improve most businesses.

Burger King is certain that the latest adjustments will lead to an increase in sales. The business claims that chains that have undergone renovations have an initial 12% rise in sales and ultimately outperform other chains over time. The corporation is preparing to modify key facilities as a result in order to increase earnings.

“We might see remodels start to hit the market mid-2023 and going forward. It should really be a gradual ramp of the business over the course of a couple of years. We expect that to start having an impact on sales over the next quarter,” Cil said.

In addition to making physical modifications, Burger King will spend an additional $120 million over the next two years to increase its advertising budget by 30%. Later this year, the increased funds for its advertisements will be used.

Additionally, $30 million would be invested in enhancing mobile applications. Many fast food businesses are presently exploring this functionality, which would drastically encourage many customers to use the company’s mobile app often.

Burger King will begin creating new tastes and ingredients for its Whoppers, Chicken Sandwich, and other menus, so the firm will also be making changes to its offerings. The extra funds will be used to train staff members to provide the greatest and tastiest food possible.

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Franchisees approve of the plan

93% of Restaurant Brands International’s franchisees endorsed the plan when it was presented to them. Operators will match a portion of the monies that would be allotted for improvements and personnel training to carry out the goal.

Burger King will provide the franchisees the money so they may begin adopting the Restaurant Brands program. Additionally, a somewhat revised incentive plan that departs from the standard framework it has adopted over the years will be offered to the operators.

“There were many long nights and plane rides,” the US and Canada Burger King president said.

Source: CNBC


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