Burger King (QSR) – Get Free Report is shuttering 400 U.S. restaurants by the end of the year — but it’s trying not to make a big deal over it.
Chief executive officer Joshua Kobza of Restaurant Brands International Inc., which owns Burger King, said in a recent earnings call that the fast-food chain “historically” closes “a couple hundred” Burger King restaurants annually.
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“There will always be a minority (of franchisees) who aren’t dedicated, enthusiastic operators,” Chairman Patrick Doyle added on the same call. “We’ll work with them to leave the system.”
“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,” Doyle added.
Burger King Closes Stores in This U.S. Region
The company also announced that 124 Burger King franchises have closed so far in 2023, bringing the total number of restaurants to just under 7,000.
Most of the U.S.-based Burger King closings appear to be focused on the Midwest and select Western states.
Meridian Restaurants, a major Burger King franchisee with over 100 outlets, said it’s closing 27 Burger Kings in seven states. Meridian had previously announced plans in March to enter into bankruptcy due to rising costs and sagging revenues. The company hasn’t ruled out closing more U.S. Burger Kings, stating it’s “possible, even likely” it may do so, depending on bankruptcy proceedings go.
Other states with sizable presence are closing in the following states:
Additionally, another significant Burger King franchisee – Michigan-based EYM King – had also announced restaurant closings in March due to “unforeseen business circumstances.” The vast majority of those Burger King closings have occurred in Michigan.
Even with the restaurant shutdowns, Burger King appears to have a strong balance sheet. In its previous quarter, Burger King U.S. reported an 8.7% sales boost.