Burger King has seen better days.
The "Home of the Whopper" used to be the clear number two burger chain in the United States. Once the Pepsi to McDonald's (MCD) Coke, the Restaurant Brands International (QSR) chain has fallen to number three in the U.S., slipping behind Wendy's (WEN).
That's a sad position to be in for a company that has the deep history Burger King has. On the positive side, however, Burger King has great brand recognition. Everyone knows what the company does and understands its core menu. That puts the chain in a good position for a revival.
People may not be visiting Burger King right now, or feel all that great about the chain, but they do have fond past associations with it. That's why the fast-food giant has leaned on its past bringing back its classic "long" chicken sandwich in some new varieties.
Now, Restaurant Brands International has a bold turnaround plan and it's making some key moves to support those efforts.
Burger King
Burger King Makes a Key Hire (Do the Dew)
In late 2022, Burger King's parent company made the surprise hire of former Domino's (DPZ) CEO Patrick Doyle as Executive Chairman. During his time in charge of the pizza giant (2010 to 2018), Doyle delivered 29 consecutive quarters of same-store sale increases, and system-wide sales growth of $5.6 billion to $13 billion.
That was a huge hire for the parent company and it should pay off for Burger King as Doyle is an expert in execution. Now, RBI has made a key hire of someone who will work directly for Burger King.
Pat O'Toole, a long-time PespsiCo (PEP) executive who most recently served as chief marketing officer for the company's Mountain Dew brand, will join Burger King in the same role Feb. 6. O’Toole will be "accountable for leading marketing efforts to help grow traffic, accelerate sales growth and amplify the fundamental advancements the brand is making to the Guest experience -- in support of the brand’s existing Reclaim the Flame plan shared in 2022 -- and supported by more than 96% of Burger King Franchisees nationwide," the company shared in a press release.
“Pat joins us at a milestone moment for the brand, and brings the right combination of perspective, experience and expertise to position BK for success in 2023 and beyond, said Burger King North America President Tom Curtis. "We have an incredible plan that has been built with and endorsed by our franchisees. Pat is joining this team to strengthen and build on our existing plans in collaboration with our franchisees, leveraging his impressive background and past experiences.”
Burger King Tries to Catch Wendy's, McDonald's
"Reclaim the Flame" is Burger King acknowledging that the brand may have lost its way. The program was unveiled in Sept, 2022 with a goal of accelerating traffic and sales growth while driving franchisee profitability at Burger King U.S..
RBI CEO Jose Cil talked about those efforts during the chain's third-quarter earnings call.
"We developed this plan in partnership with a diverse representative group of BK franchisees from across the country, who all had one thing in common. They have the respect of their peers and a dedication to address the needs of guests, franchisees, team members and the brand," he said.
Marketing and advertising will be a big part of "Reclaim the Flame," and the parent company has committed $400 million to those efforts. That has kicked off with a heavy blitz of ads that mixes the chain's old "have it your way" tagline with a new take.
"The launch of You Rule also marked the start of our historic Fuel the Flame advertising co-investment," he said.
The ad investment will total $120 million over nine quarters, That's only part of the chain's turnaround efforts.
"Another important element of the plan is our $250 million Royal Reset investment that includes two important components," Cil said. "First, a Royal Reset Refresh capital investment of $50 million in a restaurant technology, kitchen equipment and building enhancement refresh program; and second, the Royal Reset Remodel program that provides access to $200 million of funding for high quality, high return remodels. Together, we expect the Royal Reset Refresh and Remodel programs to touch roughly half of the restaurants across our system over the next two years."
