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Burger King's parent company will acquire Carroll's Restaurant Group, the fast food chain's largest franchisee in the United States, for a whopping $1 billion.
Restaurant Brands International, which owns Burger King, Tim Hortons, Popeyes and Firehouse Subs, announced Tuesday that it will acquire Carroll's for $9.55 per share in an all-cash deal.
Carroll's operates 1,022 Burger King restaurants in 23 states, which brought in about $1.8 billion in system sales in 2023, as well as 60 Popeyes restaurants in six states, according to Restaurant Brands International.・Operating a restaurant.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| QSR | Restaurant Brands International Co., Ltd. | 78.45 | +0.26 | +0.33% |
The move comes as part of Burger King's “Reclaim the Flame” plan. The program aims to transition from large-scale franchisees to local franchisees as part of Burger King's strategy to revamp the Burger King brand in the United States, renovate restaurant locations, and attract younger customers.
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Burger King logo seen at a shopping mall in Krakow, Poland, January 10, 2024. (Jakub Porzycki/NurPhoto via Getty Images / Getty Images)
Carroll's stock closed Friday at $8.42 per share, giving it a market capitalization of $449 million. Shares soared 22.49% on Tuesday, reaching $9.51 at 12:36 p.m. ET.
“Carol's has demonstrated the strength and improvement of restaurant operations over the years,” said Tom Curtis, president of Burger King U.S. and Canada. “This acquisition is an exciting catalyst for our 'Reclaim the Flame' plan, which is focused on relentlessly pursuing a better experience for our guests. Over the next five or so years, we will rapidly renovate these restaurants and We plan to put it back in the hands of our customers.'' Our motivated local franchisees provide a great experience for our guests. ”
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The exterior of Burger King, a fast food restaurant in Danville. (Paul Weaver/SOPA Images/LightRocket via Getty Images/Getty Images)
The company plans to invest about $500 million to modernize the 600 restaurants it acquired from Carroll's, more than doubling the rate at which franchisees are renovating them now.
Restaurant brand executives told investors on a conference call that they plan to increase the number of Burger King U.S. franchisees from about 300 now to about 400 to 500 over the next five years.
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A pedestrian passes in front of American hamburger fast food chain Burger King in Spain. (Xavi Lopez/SOPA Images/LightRocket via Getty Images/Getty Images)
“Today’s announcement is a testament to the more than 24,000 Carrolls team members who have helped drive our company to record revenue levels over the past 12 months. “We were able to deliver immediate and solid value to our company at an attractive premium relative to our current and historical stock price,'' said Deborah Darby, President and CEO of Carroll's. he said.
Josh Kobza, CEO of Restaurant Brands International, said, “This is an investment by Tom and his team to deploy capital to accelerate growth and build a more competitive Burger King restaurant base. “This is a great example of our commitment to supporting the team's broader efforts.” The strategic benefits of this acquisition are very compelling and are consistent with our goal of investing capital in long-term, high-return opportunities. ”
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Restaurant Brands International said the transaction is expected to close in the second quarter of 2024.
Reuters contributed to this report.
