Burger King To Close As Many As 400 Weak Locations

Burger King

Fast-food giant Burger King is planning to close as many as 400 underperforming locations by the end of 2023, according to company executives, though the exact number hasn't been determined yet.

The closures weed out weaker locations by owner Restaurant Brands International, which also franchises Popeyes, Tim Hortons and Firehouse Subs.

Altogether, Burger King has just over 18,900 restaurants worldwide as of the end of Q1 2023, with more than 6,960 in the United States and nearly 11,950 in other countries. Compared with the same quarter last year, the company has a net 124 fewer U.S. restaurants, but 589 more international locations.

Overall, U.S. same-store sales were up 8.7% year-over-year in the first quarter, its strongest quarter since Q2 2021. Even so, rivals McDonald's and Subway did better in same-store sales increases during the quarter, up 12.6% and 11.7% respectively.

"We'll work with them [weak franchisees] to leave the system and move on to do something else,” RBI Chairman Patrick Doyle said during the company's first-quarter 2023 earnings call.

“There simply is no room for franchisees who are not willing or able to work hard to operate restaurants that are better than the system average over the long term,” Doyle said.

So far this year, two major Burger King franchisees — Meridian Restaurants Unlimited and TOMS King — both declared bankruptcy, QSR magazine reports. Both of them chalked up their troubles to decreased traffic and revenue.

In cases like those, Burger King is sometimes willing to acquire the underperforming restaurants itself, then sell them to a stronger operator. The company bought 17 locations from TOMS King after its bankruptcy.

RBI stock ticked up by about 1.2% by midday Monday. Compared with a year ago, its price is up more than 42.5%.

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