Burger King Sells 200 Restaurants
The fast-food chain is selling company-owned locations to local franchisees as part of its US turnaround strategy, aiming to retain only 300 company-owned restaurants out of over 6,000
Burger King is on track to sell around 200 company-owned restaurants to local franchisees by the end of the year, as part of its US turnaround strategy. The move is part of a broader refranchising initiative to accelerate the modernization of Burger King restaurants.
The company's parent, Restaurant Brands International, aims to retain only about 300 company-owned locations out of more than 6,000 US restaurants. This strategy is a deliberate shift from the company's previous approach, where it preferred deep-pocketed, private equity-backed franchisees. Instead, Burger King is now directing its sales to smaller, community-rooted operators.
Burger King U.S. President Tom Curtis said the chain wants franchisees who live and work in the communities that they serve. This approach is reflected in the company's recent sales, such as the purchase of 16 Burger King locations in the Salt Lake City area by Jeremy Kline, a former director of franchising for Burger King North America.
The refranchising initiative is part of Burger King's broader turnaround strategy, which has already started to pay off. The company recently overtook Wendy's as the number two burger chain in the US, based on system sales. Burger King reported domestic same-store sales growth of 8.5% in its latest quarter, and shares of Restaurant Brands have risen about 6% over the last year.
## What changed The acquisition of Carrols Restaurant Group, Burger King's largest US franchisee, for roughly $1 billion in 2024, added 1,023 company-owned locations to the 175 that Restaurant Brands already held at the time. However, the company always planned to sell most of those restaurants back to smaller, local franchisees.
## Why it matters The future of Burger King rests on the shoulders of its franchisees, who will be responsible for the majority of the company's over 6,000 US locations. The success of this strategy will be crucial in determining the company's ability to compete in a challenging market, where slow traffic, elevated inflation, and high labor costs are major concerns. New franchisees, such as CKJ Management, which reported a 21% year-over-year sales increase in its Burger King restaurants, will be critical to the company's success.
The company's focus on local franchisees is a strategic reversal from its previous approach, and it remains to be seen whether this strategy will pay off in the long term. However, with the company's recent sales growth and the success of new franchisees, Burger King is betting that its US comeback is on track.
