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Guest: Tom Curtis, President of Burger King North America
“We always had an objective there of something great. But what was really great was the journey, not actually the destination. And that's part of the reason why I came to Burger King.”
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Burger King has slipped to 7th in the fast-food rankings, losing its #2 burger spot to Wendy’s due to 'neglected' operations and complex menus.
“While still the third largest burger chain, BK ranked seventh in the fast food category behind McDonald's, Chick fil A, Taco Bell and Wendy's in 2022.”
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The $400 million 'Reclaim the Flame' initiative is a high-stakes bet on the Domino’s turnaround playbook, led by former Domino's CEO Patrick Doyle.
“Patrick is very much like a franchisee now. He has his own capital invested in RBI, and he absolutely wants to make it successful and make sure it's successful, not only just so he's been recognized as done a good job, but also because he's heavily invested in it.”
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Management is aggressively pruning the brand’s footprint, closing 400 underperforming stores to alleviate the financial burden on struggling franchisees.
“This is a seminal moment in time for us to figure out which restaurants have long term viability. There's a few out there that don't, and we need to take those off of our owners backs so that they don't have to bear the losses.”
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Store-level profitability has cratered by 20% since 2018, dropping from $175,000 to $140,000 in annual cash flow per location.
“In 2022, profits at Burger King stores were down nearly 20% from 2018. Their store level cash flow was about $140,000 in 2022. That compares to 2018, $175,000.”