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Burger King Owner Restaurant Brands Acquires Largest U.S. Franchisee for $1 Billion

Burger King Owner Restaurant Brands Acquires Largest U.S. Franchisee for $1 Billion
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Restaurant Brands International is set to acquire Carrols Restaurant Group, the largest Burger King franchisee in the U.S., in a cash deal valued at about $1 billion. This strategic move is a departure from Burger King’s predominantly franchised model over the past decade, with only 175 corporate-owned locations currently. The acquisition aims to rejuvenate Burger King’s U.S. business, following a $400 million revitalization plan initiated by Restaurant Brands over a year ago.

Acquisition Details

Restaurant Brands will pay $9.55 per share for Carrols, which operates over 1,000 Burger King restaurants and 60 Popeyes locations. Carrols’ stock closed at $8.42 on Friday, reflecting a market value of $459 million. The deal, expected to conclude by the second quarter of 2024, marks a pivotal shift in Burger King’s strategy.

Remodeling and refranchising

The post-acquisition focus is on remodeling 600 Carrols’ Burger King locations within the next five years. These renovated establishments will then be sold back to motivated local franchisees, a strategy aimed at enhancing customer experiences. Approximately $500 million will be invested in the remodeling initiative, funded by Carrol’s operating cash flow.

Tom Curtis, President of Burger King U.S. and Canada, expressed the importance of consistent remodeling across the market to improve recruitment, staffing, and the overall brand image. Burger King’s development team plans to collaborate with Carrols to accelerate the renovation process, targeting 120 restaurants annually, doubling Carrols’ original goal for 2024.

Long-Term Strategy

Burger King envisions completing the franchising of the acquired restaurants in five to seven years. While most will be sold off, the company plans to strategically retain a couple of hundred for innovation, training, and operator development.

Financial Landscape and Approval Process

Carrols’ recent announcement of fourth-quarter results revealed a robust performance with a 7.2% increase in same-store sales for its Burger King locations and a 2.9% rise in traffic. This positive trend aligns with Carrols’ historical outperformance within the U.S. Burger King system.

The deal is expected to close in the second quarter of 2024, pending approval from Carrols’ stockholders and regulatory bodies. The transaction includes a 30-day “go shop” period, during which alternative proposals can be solicited.

Analyst Perspective

Andrew Charles, a TD Cowen investment bank analyst, acknowledged Carrols as a superior franchise operator, historically outpacing the U.S. Burger King system. While the deal is seen as advantageous for Restaurant Brands in expediting the renovation of Burger King locations, the long-term impact on modernizing U.S. restaurants is significant. Charles estimates that the acquisition could increase the percentage of modernized Burger King locations from 40% to 60%.


The acquisition of Carrols Restaurant Group by Restaurant Brands International signals a strategic shift for Burger King, emphasizing a commitment to revitalizing its U.S. business. The infusion of funds into remodeling initiatives and the subsequent franchising strategy reflects a proactive approach to enhancing customer experiences and modernizing Burger King locations nationwide. The deal’s successful completion is anticipated to position Burger King competitively in the evolving fast-food landscape.

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