Burger King is four years into a turnaround plan that has seen it invest hundreds of millions of dollars into restaurant remodels and relocations, upgrades to technology and equipment in stores, and increased marketing.Gene J. Puskar/The Associated Press
When Burger King executives are on the road and strike up conversations with strangers about what they do, the most common reaction they hear is not an encouraging one.
“So many people would say, ‘I used to love Burger King,’” Tom Curtis, the president of the brand in the United States and Canada, said in an interview with The Globe and Mail. For Mr. Curtis, such comments underscore what his leadership team is up against.
“I think it’s really challenging for any legacy brand to get people that have gone away from it to come back,” he said.
The chain, owned by Toronto-based Restaurant Brands International Inc. QSR-T, is four years into a turnaround plan that has seen it invest hundreds of millions of dollars into restaurant remodels and relocations, upgrades to technology and equipment in stores, and increased marketing to try to convince customers to return. (Mr. Curtis and some other RBI executives are based in Miami.)
They have work to do: In Canada, Burger King held a dollar share of just 5.3 per cent in the quick-service burger market as of December, according to data from research firm Circana. That puts it in the No. 4 spot, behind McDonald’s, A&W and Wendy’s. Its performance in the U.S. has similarly lagged.
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“What happened?” Mr. Curtis lamented, in an ad he voiced for the brand that ran during the Academy Awards broadcast last month.
That marketing push was meant to communicate that things are starting to change: The chain rolled out a revamped version of its signature Whopper burger in the U.S. in late February, and last week, the company brought the update to Canada.
The sandwich has a different bun, and clamshell packaging to prevent it from getting squished and soggy in the bag. (Upgrades to the mayonnaise, advertised in the States, do not apply here because the chain adopted the formulation from its Canadian restaurants.) Canada’s menu changes are also going further than the States, with new fries, chicken nuggets and onion rings also coming to the restaurants.
The hope – for both RBI and the franchisees who have invested heavily in upgrades to their locations – is that the changes drive traffic among people who have not set foot in a Burger King for a while. But the investment had to come first, Mr. Curtis said.
“If you elevate the menu and people come back, and the restaurant’s dirty and the floor tiles are cracked, and the experience is erratic from franchise to franchise, then those menu changes might get you a moment of fleeting attention, but if they’re really going to reset the brand – which I think they’re doing – you have to have that foundation in place,” he said.
At an investor day in late February, the company announced that the number of U.S. restaurants that had been upgraded to a “modern image” went from 37 per cent in 2021 to 58 per cent last year. Canada is outpacing that number, and now stands at 75 per cent, Mr. Curtis said.
Convincing more restaurant owners to keep up the pace of remodellings could be a challenge, however, as economic conditions tighten. RBI reported in February that after recent years of improvements to franchisee profitability, average store profits slipped last year because of higher beef prices and increased contributions the U.S. owners made to the company’s advertising fund. The menu improvements also come with added costs.
“Elevating the Whopper is expensive,” Mr. Curtis said. “… And you and your franchisees need to lock arms and believe in that, and believe that it will put the brand on a trajectory for success – for them, ultimately, through growth and traffic, and for the brand itself, in terms of sales growth.”
In Canada, for the other menu changes launching now, the team worked for more than a year to research recipes at other Burger King markets around the world, and taste-test versions of them with customers here. The fries – now slightly thinner, with a bit of potato skin left intact and a different coating – came from Scandinavia. The tempura-battered chicken nuggets, with more meat inside, were inspired by the South Korean version. The chain is increasing prices slightly for those sides, to offset the costs of the revamped menu for franchisees.
Burger King will be watching the performance of those new items in Canada, and while Mr. Curtis said he does not consider the country a test market – since tastes here can differ significantly from the U.S. – it could inform changes south of the border. (Mr. Curtis learned about Canadian tastes as the chain prepared to launch the new nuggets and he urged the team to offer a ranch dipping sauce that tested well with customers. They informed him that Canadians prefer honey mustard or sweet-and-sour sauce, and do not dip their nuggets in ranch at the rate Americans do.)
All of this is happening in an increasingly competitive market, at a time when restaurants have to fight harder to attract inflation-weary customers who are cutting back on dining out. Earlier this year, for example, McDonald’s Canada dropped the price of its value menu.
Mr. Curtis has been front and centre in the efforts to win back those customers. Earlier this year, Burger King launched a feedback line, and Mr. Curtis continues to take calls from patrons. When McDonald’s president and chief executive officer Chris Kempczinski drew online mockery in February for a video promoting a new burger that showed him taking a small, almost hesitant bite, the Burger King team responded with a video of Mr. Curtis eating a Whopper with a touch more enthusiasm. But he also acknowledges that sort of hoopla only goes so far.
“You can’t do it through standard marketing,” Mr. Curtis said of the turnaround he is aiming for. “You have to do it through a genuine effort, and then you have to deliver when customers do give you that one chance.”