Restaurant Brands to acquire Burger King's largest franchisee for $1 billion

TORONTO - Restaurant Brands International (NYSE:QSR) (RBI), the parent company of Burger King, announced today the acquisition of Carrols Restaurant Group (NASDAQ:TAST), the largest chain of independent Burger King franchises, in a deal valued at approximately $1 billion. The deal, confirmed by RBI at $9.55/share—a substantial premium—covers operations in 23 states and is set to be finalized in the second quarter of this year.The acquisition sent RBI shares down by over 1.5% following the announcement. RBI's plan includes a major overhaul and subsequent sale of about 600 Carrols’ Burger King locations over the next five years, as part of its broader strategy to rejuvenate the Burger King brand.This acquisition is pivotal to Burger King's Reclaim the Flame campaign, which has been making significant progress with a considerable increase in remodels since September 2022. This initiative is backed by a $400M investment targeting high-quality upgrades aimed at improving franchisee success through operational enhancements, marketing efforts, and digital asset support systems.Today, RBI announced an additional $500 million investment into refreshing nearly 600 Carrols-run establishments within five years to more accurately reflect Burger King's contemporary brand image. This restructuring comes alongside plans to refranchise most of the recently acquired restaurants back into local hands over five to seven years while maintaining some stores directly for corporate innovation and training purposes—a response to past underperformance closures and bankruptcy filings among operators.Carrols reports robust average sales figures at $1.7 million and a marked improvement in quarterly same-store sales by 7.2%, coupled with traffic growth reversal after previous declines. These positive trends underscore the potential for post-transaction career advancements for Carrols’ employees including managerial paths toward franchise ownership as outlined by Deborah Derby.With an upward trajectory indicated by a third-quarter U.S same-store sales increase of 6.6%, this strategic move underscores RBI's commitment to reinvigorate its Burger King brand and enhance its competitive positioning in the fast-food market. The acquisition is expected to boost system sales through substantial upgrades and revamp franchise performance across the board.

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