Expert Insights on the RBI/Carrols Deal

The new year has just begun and already there’s a big deal in the restaurant industry as Restaurant Brands International Inc., parent company of Burger Kings inked an estimated $1 billion deal to acquire Carrols Restaurant Group, the largest Burger King franchisee in the United States, operating 1,022 restaurants in 23 states.

The transaction is part of Burger King's Reclaim the Flame plan to accelerate sales growth and drive franchisee profitability. Burger King expects to remodels to a modern image over the next five years and then refranchise a  large majority of newly remodeled restaurants to smaller franchisee groups.

Is this a sign of things to come? To learn more, Modern Restaurant Management (MRM) magazine received expert insights from  Gregg Majewski,  Founder & CEO of Craveworthy Brands and former CEO of Jimmy John’s Sandwiches.

What is your take on Restaurant Brands International (RBI) buying out Carrols, it’s largest franchisee? Were you surprised? Why is this happening now? 

It’s definitely a big and bold move to make for any brand, but with full faith in their new direction, I’m sure they will see success. I’m not surprised that this decision was made, as it’s become more important now, more than ever before, to meet the ever-changing needs of consumers. Big changes are happening in modernization, innovation, food technology, and more, and if you’re not adapting, you simply won’t make it.

What does the deal say about the current state of franchise investment activity? 

The amount of money sitting on the sidelines right now is bigger than ever, and if the economy sees any improvement, it is going to be a wild year. 

The amount of money sitting on the sidelines right now is bigger than ever, and if the economy sees any improvement, it is going to be a wild year. 

What kind of M&A activity do you anticipate in the coming year? 

A huge number of brands will be for sale this year, and that will be good for the franchisees. Sometimes, new leadership can bring new perspectives and opportunities to a stalled and tired brand. 

What do you feel the reinvestment into locations will offer the franchisee operators? 

Reinvesting in the design and atmosphere of stores will not only captivate loyal customers, but attract brand new ones, which is the name of the game. With the same, tired looking stores, you’ll see the same results. Making it in the restaurant industry comes down to providing a true experience for guests. Not only is change inevitable, but it’s how you grow as a brand.

What do you feel this will do to reinvigorate the brand? 

Bringing in new leadership will set the brand up for continued growth and sustainability. As Restaurant Brands International’s plan is to remodel 1,022 restaurants and then sell them back to local franchisees to own and manage moving forward, they are creating new opportunities for their owners.

What can emerging and other legacy brands learn from this deal? 

All brands, emerging or legacy, can learn that even if you have a proven business model, adapting to the needs of consumers and enhancing your guest experience should always be priority. Analyze your customer’s experience from the moment they walk into your restaurant; from ordering, to menu items, to how your products are served.