Burger King in the U.S. needs the most growth, Tim Hortons is a terrific business: Patrick Doyle
An executive at Restaurant Brands International Inc. said the move to appoint a new chief executive officer is “all about accelerating growth” with their franchisees like Burger King.
On Tuesday, the fast-food conglomerate announced Jose Cil would be stepping down as CEO on March 1 and he will be replaced by Chief Operating Officer Joshua Kobza.
“Jose's done a great job getting us to here, it's [CEO change] all about accelerating growth. So how do we move faster? How do we help the franchisees to be more successful? That's ultimately what's going to generate more growth for us,” Patrick Doyle, executive chairman at Restaurant Brands, said in an interview with Bloomberg Markets on Tuesday.
This comes at a time amid rising concerns about profitability at franchisees.
The fast-food company said the average Canadian Tim Hortons location raked in $220,000 last year in earnings before interest, taxes, depreciation and amortization.
Restaurant Brands last reported figures for Tim Hortons locations was back in 2018, with the average restaurant earnings coming in at $320,000.
The Toronto-based company also missed analyst estimates for its fourth quarter on Tuesday, with a drop in adjusted earnings per share.
“I think when you look at them (their fast food brands) the big opportunities are first focus on the franchisee profitability. They're all down a bit from where they were, they're all already starting to recover, some of them pretty smartly, we've got to keep that going,” Doyle said.
He added that they see a big opportunity to grow more in the international market, outside of the United States.
'RECLAIM THE FLAME'
Last September, Restaurant Brands shared details about the “Reclaim the Flame” plan for Burger King locations in the United States.
The company said it would be increasing franchisee investments in areas such as advertising, digital investments, restaurant technology and remodels.
Doyle said about 3,000 Burger King locations south of the border will be getting new technologies and asset upgrades over the course of the year.
“The franchisees have committed that they will up their advertising commitment as long as we hit certain thresholds for their franchise profitability at the store level, which we think is very fair, and we're confident we're going to get there,” he explained.
“So we invested first, we get them to invest along with us, that's going to get the momentum that we really need on this business.”