Restaurant Brands International Inc. continues to tap its global supply-chain and technological opportunities to grow its four concepts internationally, the executive chair told the Morgan Stanley Global Consumer & Retail Conference attendees on Tuesday.
Patrick Doyle, the former Domino’s leader who bought into and was named executive chair of the Toronto-based RBI in November 2022, spoke during a conference fireside chat Tuesday with Brian Harbour, equity analyst with Morgan Stanley. As of Sept. 27, Restaurant Brands International was the owner and franchisor of 30,375 restaurants, including 19,035 Burger Kings, 5,701 Tim Hortons, 4,373 Popeyes Louisiana Kitchens and 1,266 Firehouse Subs.
“There are some things you can do centrally,” Doyle said. “You've got to have visibility on talent and be able to move talent amongst different businesses centrally. Procurement is clearly a big opportunity in the international growth. [With] the platform we have there, we can grow faster with three other brands because we've got the scale business with Burger King that is a huge advantage for us.”
Burger King is in more than 120 countries, he added.
“If you look at the best or healthiest competitors in in our categories — in sandwiches right now in the U.S. it's probably Jersey Mike’s … [and] in chicken it's probably Chick-fil-A — neither of them have any kind of meaningful international business,” Doyle said. “It's going to be hard for them to move into international.”
Doyle conducted the fireside chat solo, without Josh Kobza, the RBI CEO who remained home with a new baby.
Doyle said Popeyes remained “a standout” in the increasingly popular chicken category, which has been dominated by the success of Atlanta-based Chick-fil-A. Restaurant Brands International has been working on making operations in Popeyes units easier for franchisees, he added, including new equipment in the kitchen
“Chick-fil-A's units are incredibly efficient,” Doyle admitted. “They have a hundreds of industrial engineers in Atlanta that are finding ways to make those restaurants more efficient day in and day out. And they've done a terrific job at creating a very efficient box.
“They execute at a high level,” he said, “because they train in hire well, but also because they've just made it easier for them to do it.”
Popeyes has to execute better, Doyle said.
“We've got to get better at executing both in terms of the people who are doing it in the restaurants and how we train them, but frankly a lot of it's on us,” he said. “We have to make those restaurants easier to run for them to be able to produce at a level and a speed of service and a consistency. And we are not where we need to be on that, and so we know what we need to do. The path is there. It's going to take a bit of time, but that's going to generate a lot of growth.”
Doyle also said RBI, through its $400 million “Reclaim the Flame” investments announced in September 2022, was working to restore luster to the Burger King brand in the United States.
He said RBI was intent on improving profits at Burger King units in the United States.
“We care about their profitability more than any other metric,” he said. “We're looking at driving cash-on-cash returns for them,” which he called the “the magic” of the franchise business.
Reimaging and updating of Burger King units was getting underway, Doyle said. “The whole asset base of all of our restaurants need to look great. That's going to take some time, but we also want to look at the results that we're getting from the investments we're making see if there are any tweaks that we need to make. So far, it looks very, very good,” he said.
“We still have an awful lot of the advertising dollars that we committed that are yet to be spent,” he said. “That gives us some confidence around our ability to drive sales.”
RBI’s scale outside of the United States remains an advantage for the company, Doyle concluded.
“What's important — and I think we're getting very right now — is that you have empowered presidents of those businesses that are going to move quickly that you don't lose the entrepreneurialism that you might have as a single-brand company,” he said. “What Josh has been doing really well is kind of moving the authority down to those presidents to move faster with their businesses, make more of the decisions there as opposed to kind of at the RBI level. There are things that we do from a support standpoint that are going to generate better growth better returns maybe efficiency.”
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