The Cost Of Getting Burger King Back On Track

Back in 2021, Burger King gave itself its first makeover in more than 20 years—one that we declared so sexy it hurt. But even then we knew it would take a while to roll out to all locations, and according to CNBC, in the interim Burger King has been reporting "lackluster sales." It seems Burger King is going with the "spend money to make money" strategy, investing $400 million over the next two years. And with the "Reclaim the Flame" plan franchisees will be footing at least part of the bill.

In a press release sent to The Takeout, Burger King reveals that the "Reclaim the Flame" plan is broken up into two parts: "Fuel the Flame," a focus of $150 million in advertising and digital investments, and "Royal Reset," which puts $250 million toward restaurant technology, kitchen equipment, building enhancements, and high-quality remodels. According to the press release, 93% of franchisees voted to participate in the plan, which is asking a lot of them.

Franchisees are being asked to make a "comparable co-investment" to remodel locations, a renovation that will force locations to close while work is being done. For some locations, this could be an added blow to an industry already struggling to keep doors open due to lack of labor and COVID restrictions. But to encourage franchisees to throw in larger investments and keep stores closed longer for more extensive renovations, Burger King is offering cash to franchisees once the project is completed and will give them a discount on royalties they pay to the company.

Burger King seems pretty confident that these investments will pay off for the business and franchises alike. According to a press release from Burger King:

We have historically maintained a reimaging program which has generated average year one sales uplifts of approximately +12% with sustained outperformance in comparable sales relative to non-remodeled restaurants of approximately 2%.

Back when Burger King's new logo was first revealed, its burger-centric imagery was meant to draw attention back to the food itself, evoke a sense of nostalgia, and create a screen-friendly image for digital literacy. These remodels seem to share those goals, which are appealing for sales. But change is always a gamble and marketing campaigns can fail—Burger King itself faced backlash back in 2008 with its "Whopper Virgins" campaign that led to a drop in sales the following year, Mashed reports. And those sales drops directly affected franchisees who had to shutter their stores.

Will Burger King successfully "Reclaim the Flame"? Will franchisees reap a reward from their investment? All we can do is wait to see if nearly half a billion dollars is enough to get Burger King back on track.