Burger King announces $400M 'Reclaim the Flame' investment for sales recovery in the US

Burger King reveals its plan for sales recovery in the United States. The fast-food giant is investing $400 million in fresh advertising, remodelling of its restaurants, enhancement of its app, and more.

Burger King said it would pour in the investment in over two years. This will not affect the affordable offerings in the store as the company said the value meals would remain on the menu.

The Restaurant Brand International, the burger joint's parent company, announced the investment plan late last week, and the scheme is actually part of a broader strategy to bring around the falling sales in the U.S. The RBI made the announcement concerning its business during its recent annual franchisee convention that was held in Las Vegas.

According to CNBC, the new financing is likely to weigh on its adjusted earnings per share for this year and 2023 by 10 to 12 cents per year. Burger King is expecting the investments to start filling the bill by 2025. Analysts at Wall Street surveyed by Refinitiv predict that the earnings per share could be $3.24 in 2023.

The company will now prepare to make changes in Burger King. It will spend around $200 million on the remodelling of around 800 stores, and $50 million is set to go for the upgrading of technology, kitchen equipment and improvements in roughly 3,000 locations.

Lastly, $150 million will be spent on new advertising and digital investments. The fast-food chain is currently operating 7,000 stores in the country.

Burger King said that based on its experience, renovated stores always see a boost in sales of about 12% in the first year and usually do better compared to its older locations over time. Thus, it is hoped the strategic investment will be able to produce stronger sales growth even if it may take time to see the results.

Fox Business reported that the sales recovery scheme had been titled "Reclaim the Flame", and it is aimed at accelerating sales growth and driving franchisee profitability. Burger King North America president, Tom Curtis, stated the initiatives are intended to provide a superior experience for BK customers.

"I'm very proud and thankful that our franchisees have stepped up once again to invest in our performance together, reflecting the genuine partnership and mutual respect we have built between the franchisor and franchisees," the BK North America president said in a press release.

He added, "Ultimately, the success of this 'Reclaim the Flame' plan comes down to execution at the restaurant level, and we are so fortunate to have franchisees who love this brand and are working closely with us to focus on the right priorities. I believe in this team, this plan and a bright future as we evolve and enhance our guest experience and drive profitable growth for the business."