Dive Brief:

• Burger King will invest an additional $300 million to accelerate remodels of U.S. units, the company said in a press release Tuesday.
• This investment will launch Royal Reset 2.0, an expanded co-investment program that will build on the company’s existing Royal Reset investments. The new program will offer cash incentives to top-performing operators to produce “quality remodels and rebuilds.” It also provides the opportunity to complete about 1,100 additional remodels by 2028, the company said. 
• Parent company Restaurant Business International has now invested roughly $2 billion in Burger King improvements, RBI Executive Chairman Patrick Doyle said on a Tuesday earnings call. Burger King now expects to remodel 85% to 90% of its restaurants by 2028.

Dive Insight:

Burger King previously invested $250 million for “modern image, technology and new kitchen equipment” for its Royal Reset program in September 2022, which is a part of its Reclaim the Flame plan. That plan also includes a Fuel the Flame program that will invest $150 million toward marketing and advertising. Burger King also previously committed $500 million to remodel over 600 Carrols Restaurant Group restaurants. This money will be used after Burger King’s pending $1 billion acquisition of the franchisee is complete. 

Seven months ago, the chain rolled out its Sizzle design, which includes digital pickup and drive-thru elements. Remodels under Royal Reset 2.0 will feature this design. Franchisees have until Oct. 31 to opt in to the Royal Reset 2.0 program. 

“We’ve seen solid interest from franchisees in our system and we’ve been piloting and testing over the past few quarters,” Restaurant Brands International CEO Josh Kobza said Tuesday during an earnings call. He added that the Sizzle image will be available to all franchises in the near future. This remodel has already been deployed in restaurants in Miami, Las Vegas, New Jersey, Northern California and Asheville, North Carolina.

The company said its Reclaim the Flame investments led to record average U.S. franchisee profitability last year. Burger King also saw sales upticks in 100 Royal Reset remodels that were completed and reopened for at least six months. The company also reported an increase in same-stores sales of 3.9% in the U.S. during the first quarter of 2024. 

“I do expect that all of these remodels should be fairly impactful,” Kobza said. “We’re doing larger scope remodels in general compared to what we did over the past 10 years so those tend to have a bigger impact on consumers.”

During Q1, the company funded $6 million for Fuel the Flame investments, which included $5 million toward the Burger King U.S. advertising fund, the company said in an earnings release. It also put $19 million toward Royal Reset investments, which included $9 million toward remodels. As of March 2024, the company has spent $79 million for Fuel the Flame investments and put $81 million toward Royal Reset investments. 

Once these programs are completed, the company doesn’t expect to provide more capital toward co-investment remodel programs.