Burger King has closed six restaurants across America amid plans to shut some 400 stores this year and reinvest funds into modernizing the brand.
Stores in Florida, Nebraska and New York have been closed or sold, leaving gaps for competitors to move in.
In Florida, restaurants at 210 E. State St. downtown and 1981 Kings Road were ‘abruptly closed‘ after nearly 40 years serving customers. No reason for the closures was given.
Meridian Restaurants Unlimited – the bankrupt owner of several stores in Lincoln – also received approval to close outlets at 48th and Holdrege streets, 48th and Van Dorn streets, and 5940 Havelock Avenue in Nebraska.
Locations at 84th and O streets, 17th and South streets, 40th Street and Old Cheney Road, and 11th Street and Cornhusker Highway have also been sold to a Kansas-based company, the Lincoln Journal reported.
Burger King is looking to ‘reset’ with $250mn of investment as stores nationwide struggle
While the reason for the closures was not given, Burger King has closed a string of stores nationwide this year amid a drive to modernize stores and bring back lost customers.
The Burger King in Blue Point, Long Island officially closed in October after 40 years in business. Greater Long Island said the site was ‘especially loved by local families for its Hollywood kitsch and 1950s vibe’.
Local restaurants on Medford Avenue, Waverly Avenue and Sunrise Highway will remain open.
In May 2023 Burger King said that it would also crack down on underperforming franchises, estimating around 300-400 ‘low volume’ restaurants would close this year.
‘I would emphasize that there is a fair degree of uncertainty regarding exact numbers, and this will depend, to some extent, on the pace of recovery in the business, which we’ve already begun to see,’ CEO Joshua Kobza said at the time.
Patrick Doyle, RBI chairman, said during the firm’s Q1 earnings call earlier this year: ‘There will always be a minority who aren’t dedicated enthusiastic operators, and that’s OK.
‘We’ll work with them to leave the system and move on to do something else. There simply is no room for franchisees who are not willing or able to work hard to operate restaurants that are better than the system average over the long term.
‘But we’re talking about a small number here in these instances. We’re working to find partners who are all in.’
This came as part of a ‘Royal Reset’ $250mn investment plan announced in September last year to modernize 3,000 restaurants across the country.
$50mn of capital would be used alongside a ‘comparable investment’ from franchisees themselves to retouch restaurants with new tech, equipment and building upgrades.
CEO Josh Kobza said he expects up to 400 locations will shutter across the US in 2023
The remaining $200mn would go towards funding for some 800 restaurant remodel projects.
This would include changing the company’s existing incentive model and offering wider financial support to operators.
A statement read: ‘The remodel program represents a shift toward higher quality remodels and creates a viable path toward modernizing the system.
‘Through a more thoughtful approach and increased funding, we are establishing support for our Franchisees to address their most important investments and lay the foundation for sales and profitability growth in the years to come.’
Burger King’s Chief Operating Officer, Tom Curtis, told RBI: ‘I think that where we have the most opportunity is really redefining or defining who we are – having a relevant and distinct voice.’
In Michigan, 26 locations were
A drastic shift in administration will include changing the company’s existing incentive model and offering wider financial support to operators
The changes could be working. In the first quarter of this year, Burger King experienced 12 percent more sales per store than in the same period last year.
Restaurant Brands International, which also oversees chains including Popeyes, Tim Hortons and Firehouse Subs, experienced its highest share price to date on May 3.
Additionally, confidence in Burger King’s future appears to be rising among employees.
A Comparably poll of Burger King staff earlier this year, based on 2,585 employees, found 29% of staff were concerned about layoffs.
Employees, on average, had a 5/10 confidence rating in the future of the company, while customers believed Burger King would have a ‘neutral’ performance.
But as of November 2023, only 17% of staff feel their job at Burger King is ‘insecure’ or ‘very insecure’. 48% now believe their job is either ‘very secure’ or ‘secure enough’.
The brand suffered when, in April, two franchisees representing more than 140 locations went bust and Meridian Restaurants Unlimited, which has 118 Burger King locations across the US, filed for bankruptcy, having racked up $14 million in debt.
Burger King locations bring in around $1.4mn in sales on average, The Sun reported in April. But some of Meridian’s restaurants had been losing money for years before the shake-up, court filings have shown.
While restaurants appear to have recovered ground since Covid, the added pressures of the cost-of-living crisis have put customers off eating out.
Burger King had 7,105 locations in the US as of 2021, according to the Motley Fool.
