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Burger King’s U.S. Comeback: Why It’s Betting on Local Franchisees

By Freedom251 Team · · 4 min read

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Burger King’s U.S. comeback plan pairs restaurant upgrades and marketing with a shift of many company-operated restaurants to smaller franchisees rooted in their communities. Restaurant Brands International (RBI), Burger King’s parent, says local operators can take over much of the Carrols Restaurant Group portfolio after renovations—but refranchising is only one part of a broader strategy, and key transfers remain targets rather than completed outcomes.

Why Burger King bought Carrols

In January 2024, RBI announced it would acquire Carrols Restaurant Group, then Burger King’s largest U.S. franchisee. The deal gave Burger King control of a large group of restaurants that RBI said needed modernization. The company planned approximately $500 million in capital investment, funded by Carrols operating cash flow, to remodel about 600 acquired restaurants that did not meet Burger King’s modern-image standard. RBI’s acquisition announcement said Carrols’ experienced team would operate the restaurants alongside Burger King’s operations team during the transition.

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The stated plan was to remodel and then refranchise most of the acquired restaurants to new or existing smaller operators who live in their local communities. Burger King said it expected that process to take five to seven years. The company also planned to retain a smaller company-operated group for strategic innovation, training and operator development. These were plans announced at the time, not confirmation that all the remodels or transfers have since been completed.

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What “local franchisees” means here

A franchisee operates a restaurant under Burger King’s brand and system rather than as a corporate-owned location. RBI’s stated aim is not to hand every restaurant to a new owner: it is to move much of the Carrols portfolio into the hands of smaller local operators, which could include both new and existing franchisees. The approach keeps restaurants within Burger King’s franchise network while changing who operates them.

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What Reclaim the Flame includes

RBI presents Reclaim the Flame as a multiyear program to accelerate sales growth and franchisee profitability. It combines efforts to attract customers with investment in the restaurants themselves; the local-operator shift is just one element of that package.

  • Fuel the Flame: advertising and digital investments. RBI said these investments were completed in the fourth quarter of 2024.
  • Royal Reset: remodels and relocations, restaurant technology, kitchen equipment and building improvements. In its second-quarter 2025 filing, RBI said it had funded $152 million of up to $550 million planned for Royal Reset as of June 30, 2025.

RBI described up to $700 million of planned Reclaim the Flame investment through 2028 in that 2025 filing. Its 2024 announcement set a goal for 85%–90% of U.S. restaurants to reach modern image by 2028. Both figures are company guidance tied to those dates; they should not be read as proof that the full spending has occurred or that the modernization target has been met. See RBI’s 2024 modern-image announcement and second-quarter 2025 results.

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What RBI says has improved

At its 2026 Investor Day, RBI reported several gains since Reclaim the Flame launched in 2022. The figures below are company-reported; they indicate progress on measures RBI highlighted, but do not independently establish what caused the gains.

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Measure RBI-reported result
Burger-QSR comparable sales RBI said Burger King outperformed the burger quick-service restaurant industry for four years since the program’s 2022 launch.
Guest-experience ranking RBI said Burger King moved from 10th to 6th.
Modern-image penetration RBI reported an increase from 37% in 2021 to 58% in 2025.
Franchisee profitability RBI reported a low of around $125,000, rising to approximately $205,000 in both 2023 and 2024. It also said profitability grew in 2025 when its discussion adjusted for temporary beef inflation and advertising-fund transfers.

These are different measures: comparable sales, guest-experience rankings, restaurant appearance and franchisee profitability are not interchangeable, and their movement does not show that local refranchising alone produced the improvement. RBI describes the turnaround as a bundle of advertising, digital, remodeling, technology and operational initiatives. The company’s 2026 Investor Day update reports its view of the progress; the figures here are not independently verified.

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How the advertising-fund arrangement works

RBI said franchisees voted to continue an elevated advertising-fund contribution of 4.5% of sales through at least 2027, with 97% of voting franchisees supporting it. The 2026 update says the rate continues in 2028 only if Burger King reaches $230,000 in franchisee profitability by the end of 2027 or franchisees vote again to extend it. The 2028 continuation is therefore conditional, not automatic.

What remains a target

RBI’s 2026 update said it was actively working to refranchise its U.S. company restaurant portfolio to a base of approximately 300–500 home-market restaurants by the end of 2027, with a longer-term target of around 300 restaurants across selected markets. These are targets for the broader company-operated portfolio, not the same as the five-to-seven-year expectation announced for most of the acquired Carrols restaurants.

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RBI’s 2025 Form 10-K, filed in 2026, likewise said it planned to refranchise the vast majority of Carrols restaurants. It also describes retained company restaurants as useful for innovation, training and developing operational talent. The filing and investor update describe management plans, not a guarantee of timing or final restaurant counts. See the 2025 Form 10-K.

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Why local ownership is a bet, not a guarantee

RBI’s strategy depends on more than signing franchise agreements. Franchisees need the capacity and willingness to invest, remodels and technology upgrades need to be executed, and restaurants still face competition. The company has identified franchisee financial stability, investment and remodel execution, technology deployment and the risks of a franchised business model among relevant considerations.

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Local operators may bring community ties and direct ownership incentives, while a large corporate-operated portfolio can give Burger King more direct control over locations used for training and experimentation. The plan balances those roles: shift most acquired restaurants toward smaller operators while retaining some corporate locations. The available company updates do not isolate how much of Burger King’s reported performance improvement comes from ownership changes versus advertising, upgrades or other operating changes.

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Burger Kingbusiness strategyfranchisingRestaurant Brands InternationalU.S. restaurants

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