Burger King to expand its Canadian footprint by 25% in 5 years

Dive Brief:

Burger King said Thursday it plans to open more than 100 restaurants in Canada within the next five years, a 25% increase in the brand’s footprint in the market. The new stores will open in Ontario and Manitoba, according to QSR Magazine.
The expansion will be managed by Redberry Restaurants, a 15-year partner of Burger King Canada. Redberry currently franchises 110 Burger King restaurants across Ontario, Quebec and Manitoba.
Burger King has more than doubled its international presence, more than doubling its global unit count to almost 11,000 restaurants outside of the U.S. since 2010.

Dive Insight:

Considering Burger King’s sister chain Tim Hortons is a Canadian staple, and the largest chain in that market, it makes plenty of sense for the brand to expand there. The ability to leverage familiarity, logistics and infrastructure is a major benefit for Restaurant Brands International, or any multi-brand holding company, at least on paper.

There’s also plenty of brand familiarity from its operating partner, Redberry, which currently runs 110 Burger Kings across three provinces, representing 40% of all Canadian Burger King locations. Such an expansion deal for an existing partner certainly indicates a vote of confidence in how the brand is performing in the market, or at least the brand's potential in the market.

There's plenty of runway for Burger King's growth here. The fast food market is the fastest-growing restaurant segment in Canada, increasing by a compound annual rate of 4%. That pace is expected to continue until 2024, according to Mordor Intelligence.

Aaron Allen & Associates paints a more detailed picture of the growth potential in the Canadian market, noting that Canadians are increasingly spending their money on food away from home, but that they have about 14 percentage points of total food spend before they catch up to American’s food away from home budgets.

Burger King is on a bit of a roll internationally, up 9% in unit expansion outside of the U.S. in the third quarter. According to RBI CEO Jose Cil, global comp sales were up 5% internationally, representing Burger King’s strongest results since 2015. Additional growth markets for the chain include France, Italy, the United Kingdom, Korea and Mexico. The brand also registered a whopping 66% growth in sales in India year over year, benefiting in large part from its menu strategy.

It could also very well benefit from its menu in Canada, specifically its Impossible Whopper. Meat consumption in the market has decreased, but a significant number of Canadians, 25%, are considering changing to a plant-based diet, according to a new Insights West study. Perhaps because of this, McDonald’s has chosen Canada as the test market for its foray into the plant-based space, while KFC’s plant-based offerings there sold out in about six hours. In other words, while there is plenty of potential for Burger King in Canada, there's also plenty of competition awaiting.