This is an English adaptation of a FoodBud historical article originally published on February 16, 2024.
Restaurant Brands International (RBI), parent company of Burger King, Tim Hortons, Popeyes and Firehouse Subs, reported its fourth-quarter and full-year 2023 results with a slightly different segment structure. In addition to brand-level reporting for the U.S. and Canada, RBI added an international segment covering all brands outside those two markets.
For 2023, RBI reported systemwide sales of $42.9 billion, up 12.2% year on year.
By segment:
RBI had 31,070 restaurants at the end of 2023. The store base was split as follows: Burger King U.S. and Canada, 4,525; Tim Hortons Canada and U.S., 7,144; Popeyes U.S. and Canada, 3,394; Firehouse Subs U.S. and Canada, 1,265; and international markets, 14,742. Burger King’s U.S. and Canada footprint declined, with 245 net closures.
Full-year revenue was $7.0 billion, and net profit was $1.7 billion.
At an event in New York, CEO Josh Kobza said RBI expects to exceed 40,000 total restaurants by 2028 and reach $60 billion in annual systemwide sales. Yum Brands had just crossed the $60 billion systemwide-sales threshold.
RBI’s brand targets included:
On the fourth-quarter earnings call, Kobza also discussed RBI’s growth plans, with the company looking to North America and international markets for expansion. China remains an important market, but performance has been below expectations.
RBI’s five-year outlook for international markets called for at least 7,000 net new restaurants. At the New York event, Kobza’s comments on Asia appeared to place more emphasis on India, while expectations for China were lowered. Executive Chairman Patrick Doyle was described as highly optimistic about India because of its large population base and stronger newborn data than China, which he viewed as relevant to long-term customer formation.
In January 2024, RBI announced it would acquire Carrols, Burger King’s largest U.S. franchisee, for $1.0 billion, or about RMB 7.1 billion, at $9.55 per share.
Carrols has operated Burger King restaurants since 1976 and ran 1,022 Burger King stores across 23 U.S. states, representing about 15% of Burger King’s U.S. store count. In the 12 months ended September 30, 2023, Carrols generated $1.8 billion, or about RMB 12.8 billion, in sales, implying annual sales of roughly $1.7 million per Burger King store. Carrols also operated 60 Popeyes stores across six U.S. states.
RBI said the acquisition would accelerate Burger King remodels. It planned to invest $500 million to remodel 600 Carrols restaurants. After the acquisition, Burger King intended to refranchise most of those restaurants to existing or new smaller operators, with the process expected to take five to seven years.
Carrols had already disclosed an agreement with RBI to remodel 64 restaurants in 2023 and 2024 to support Burger King’s broader renovation program.
Kobza said the Carrols deal served two purposes: speeding up Burger King’s remodel program to rebuild franchisee confidence, and shifting more restaurants toward smaller local franchisees. He said larger franchisees were slower to remodel and less profitable than smaller operators. According to data he shared, franchisees operating fewer than 50 restaurants had modernized 51% of their stores, and in 2023 their average per-store profitability was $15,000 higher than that of franchisees operating more than 50 restaurants.
RBI’s tone on international markets, especially China, was more urgent. Yum China and McDonald’s have been expanding strongly in China, while Burger King’s growth there has remained comparatively muted. Tim Hortons’ China expansion has also shifted toward smaller-format stores, but those stores generate lower average revenue and are not counted in RBI’s reported restaurant count.
Kobza described China as a highly attractive growth market. RBI had previously guided for 5% net restaurant growth in 2024, partly based on expectations that China would continue expanding rapidly from its 2023 base. With China now more uncertain, RBI revised its 2024 growth expectations, mainly because of a lower forecast for net new restaurants in China. Kobza said China’s pace of development would slow. At the New York event, when discussing international markets, he also spoke in more detail about countries in Western Europe, including France.
On the earnings call, Kobza said China’s large geography, population and market size meant success would require franchise partners with a long-term development view and sustained capital investment. That was necessary, in his view, to grow in such a competitive market.
Burger King’s franchisee in China is Turkey-based TFI. According to TFI’s website, it had invested in 1,610 restaurants in China by the end of 2023, far smaller than KFC’s and McDonald’s China networks.
Kobza said Burger King’s nearly 1,600 restaurants in China represented a good and profitable business, but RBI expected faster growth to compete with the market’s largest players. In 2023, Burger King China returned to its pre-pandemic growth pace, with 176 net new restaurants, but Kobza said that pace did not match the opportunity in the Chinese market.
For Tim Hortons China, operated by Tims China, also known as TH International or Tianhao Coffee, Kobza said the partner needed to invest more capital to develop the business quickly and in a more compelling way.
Note: all 2024, 2028, acquisition and financial figures above are historical statements from the February 16, 2024 source article.