The fourth branch of Burger King’s plan is reimaging the entire portfolio to improve the guest experience and ROI for franchisees. Cil said the chain knows that having a modern, guest-centric, and digitally integrated restaurant is critical to fueling profitability for operators, so the company and franchisees are working together to accelerate the remodeling process.
READ MORE: Burger King Owner to Modernize 10,000 Drive Thrus
RBI launched the “Burger King of Tomorrow” initiative several years ago, and Cil said the chain has made good progress, although he didn’t specifically state how many have undergone the process.
The fifth and final portion of the strategy is translating Burger King’s global advertising creativity into “even greater brand loyalty that drives long-term traffic and sales momentum in our home market.” Cil said Burger King has spent a lot of time on price-driven communication, and that it has more work to do on high-quality messaging around the quality of its products.
Cil believes Burger King’s ability to turnaround its underperformance is entirely within its control, no matter what competitors are doing.
“The industry has been competitive for a long, long time. It goes back to the burger wars in the ‘80s and even before that,” Cil said. “We feel like the opportunity for acceleration is all about focus and pace and its entirely within our control. I think our franchisees believe the same thing. Our teams believe the same thing. It’s all within our control. … I think we have a really strong team with Burger King. We’ve added some top talent in the organization in marketing as well as operations and the team is beginning to gel together.”
RBI’s other brands, Popeyes and Tim Hortons, both had strong quarters. Popeyes U.S. same-store sales increased 26 percent on a two-year stack, still driven by the viral chicken sandwich that debuted in the latter half of 2019. Domestic AUVs are at $1.8 million, compared to $1.4 million two years ago prior to the launch of the Popeyes Chicken Sandwich. The chain also opened a net of 34 stores in the U.S. quarter-over-quarter—the chain’s best Q2 net restaurant growth since 2017. The brand finished the period with 3,562 stores worldwide—2,667 in the U.S. and 895 internationally.
On July 27, Popeyes launched its next big menu innovation—chicken nuggets. A few weeks ago, RBI sent more than 110 corporate Popeyes employees, along with field teams and trainers, to over 1,200 restaurants across the U.S. to prepare stores for the launch. Although it’s early, Cil said the nuggets are incremental and attracting new demographics in the underutilized afternoon daypart.
Tim Hortons’ Canadian same-store sales declined 2.5 percent on a two-year stack, after declining 14.1 percent in Q1 over two years. The chain grew to 5,065 stores globally, or 3,938 in Canada and 1,127 in the rest of the world. Tim Hortons’ digital channels mixed more than 30 percent—the highest among RBI’s brands.
Overall, RBI’s total revenues grew to $1.44 billion in Q2 compared to $1.05 billion last year. Adjusted EBITDA was $577 million versus $358 million in 2020, and adjusted net income was $358 million compared to $154 million in the year-ago period.