Jeremy Kline, a former director of franchising for Burger King North America, recently became a franchisee by purchasing 16 locations in Salt Lake City, reflecting a broader trend as Burger King shifts to a refranchising model.
The chain plans to sell approximately 200 company-operated restaurants to franchisees by the end of the year as part of its turnaround strategy, which includes improving marketing, food quality, and restaurant renovations. This strategy has already shown positive results, with Burger King surpassing Wendy's in U.S. system sales.
The parent company, Restaurant Brands International, is also focusing on an asset-light model, which typically leads to higher earnings. The refranchising initiative is expected to generate cash and improve operational performance, as franchisees are often more invested in their locations than corporate operators.
However, the process is slow, with a focus on ensuring franchisees are well-suited for the brand, moving away from larger private equity-backed operators. This approach aims to foster community connections and accountability among franchisees, which could ultimately enhance the brand's performance in a competitive market.
Shares of Restaurant Brands have increased by about 6% over the past year, contrasting with a 23% decline in McDonald's shares, highlighting the potential for growth as Burger King continues its recovery efforts