Burger King takes another step to reclaim the flame. Boston Market’s uncertain future. A Ukrainian coffee concept to open in Chicago. These stories and more This Week in Foodservice.

The Burger King system is about to experience a notable update.

Burger King’s parent company, Restaurant Brands International (RBI), will acquire its largest franchisee, Carrols Restaurant Group, for $1 billion in cash. Carrols operates 1,022 Burger King restaurants in 23 states that generated approximately $1.8 billion in sales during the 12 months ended Sept. 30, 2023, per a release. Carrols also owns and operates 60 Popeyes restaurants in six states. Popeyes is part of RBI’s portfolio, too.

The transaction is part of Burger King’s “Reclaim the Flame” plan to accelerate sales growth and drive franchisee profitability. “We are going to rapidly remodel these restaurants over the next five years or so and put them back into the hands of motivated, local franchisees to create amazing experiences for our guests,” says Tom Curtis, president of Burger King U.S. and Canada, in a statement announcing the deal.

Burger King got the ball rolling in this area back in September 2022 when it made a $400 million investment “to drive high-quality remodels, improve operations, enhance marketing and support ongoing technology and digital priorities.”

Burger King expects to accelerate Carrols’ current rate of remodels to bring the acquired portfolio to modern image over the next five years. To accomplish this, the team plans to invest approximately $500 million of capital, funded by Carrols’ operating cash flow, to remodel approximately 600 acquired restaurants that are not currently considered modern image.

Foodservice News This Week

• Why are limited-time offers a part of restaurants’ playbooks? Because they are effective. In fact, 91% of consumers are more likely to visit a restaurant that offers new menu items, per a Food Institute Story. The key to making LTOs work, though, is keeping things simple. One such example is Chipotle’s Chicken al Pastor burrito. Citing Circana data, the story notes 25% of buyers actively participated in this LTO despite it coming at a higher price point. Nostalgia can also play a key role in driving the success of an LTO. Take for example, McDonald’s Grimace Birthday Meal, which performed well.
• Boston Market’s future is pretty cloudy. A U.S. bankruptcy court dismissed the personal bankruptcy filing of Kay Pandya, who owns the chain. Boston Market has closed as many as 200 locations within the past year and has been sued at least 140 times over the past three-plus years, per a Restaurant Business story. Most of the suits pertain to unpaid bills. Seemingly trying to jumpstart the chain’s future, it launched Boston Market Connect, an initiative that allows someone to become an operating owner/partner of a Boston Market location without any buy-in requirements, per a company release. Owners can open a Boston Market within an existing restaurant, deli or gas station. There are no franchise fees, either.
• Next Level Burger has acquired Veggie Grill, a California-based vegetarian restaurant chain, per multiple published reports. The post-acquisition value of the company is $80 million, with 27 locations nationally, making Next Level Burger/Veggie Grill one of the largest plant-based restaurant chains nationally, per a story in Nation’s Restaurant News.
• Chicago coffee drinkers will get to sample Ukrainian hospitality later this month. That’s when Soloway Coffee, a Ukrainian coffee company, will open a location in the city’s trendy Lincoln Park neighborhood, per Eater Chicago. The wedge-shaped space will feature a minimalist design. The company opened the first of two cafes in 2016 in the Ukrainian town of Ternopil under the name Karma Kava.
• TriMark’s deal is done. The previously announced $350 million deal to “substantially deleverage” the dealer’s balance sheet is complete, per a release from the Massachusetts-based foodservice equipment and supplies dealer. Ares Management, Oaktree Capital Management, and Bayside Capital all made investments in TriMark.

Economic News This Week

• The Consumer Price Index increased 0.3% in December, per the Bureau of Labor Statistics. Housing drove most of the gains. This is 0.2% greater than November’s increase and was in line with what Bloomberg’s survey had projected. Over the last 12 months the CPI increased 3.4%. The index for food at home increased 0.1% over the month and the index for food away from home rose 0.3%.

·       The Producer Price Index for final demand fell 0.1% in December, per the U.S. Bureau of Labor Statistics. Final demand prices declined 0.1% in November and 0.4% in October. The BLS attributes the December decrease to a 0.4% drop in prices for final-demand goods. The index for final-demand services was unchanged. Overall, the PPI increased 1.0% on a year-over-year basis. December’s results have economists now thinking that November’s increase in the PPI was a blip and that inflation will continue to moderate, per this Reuters story.

• Initial jobless claims totaled 202,000 for the week ending Jan. 6, 2024, per the Department of Labor. This represents a decline of 1,000 from the previous week’s total and it represents the lowest level for weekly claims since October. The 4-week moving average was 207,750, a decrease of 250 from the previous week.