Burger King owner Restaurant Brands International will acquire Carroll's Restaurant Group, the fast-food chain's largest franchisee, for $1 billion in cash.
Toronto-based RBI announced On Tuesday, the company announced it had reached an agreement to pay Carroll's, which operates 1,022 Burger King restaurants in 23 states and 60 Popeyes in 60 states, $9.55 per share.
The stock price represents a 23.1% premium to Carroll's 30-day volume-weighted average price as of January 12th and a 13.4% premium to the January 12th closing price, according to a press release.
RBI added that it plans to “renovate the acquired restaurants over the next five years to accelerate Burger King's path to a modern image.”
The company calls the initiative “a 'Return the Flame' plan to accelerate sales growth and increase franchisee profitability.”
RBI said the deal with Carrolls was announced in September 2022 to “drive a high-quality facelift, improve operations, strengthen marketing and support ongoing technology and digital priorities.” This follows the brand's initial investment of $400 million.”
The more than 1,000 Burger King stores formerly owned by Carroll's stores generated approximately $1.8 billion in sales for the 12 months ended September 30, 2023, according to a press release.
For reference, the average single Burger King franchise has annual sales of about $1.39 million, according to financial modeling platform Sharp Sheet.
RBI said it plans to invest approximately $500 million in capital, funded by Carroll's operating cash flow, to renovate approximately 600 acquired restaurants that are not currently considered to have a modern image. Ta.
Once the outposts in the Carrolls portfolio are revamped, they will be “back in the hands of willing local franchisees,” RBI said.
The deal is expected to close in the second quarter of 2024.
Representatives for RBI and Carrolls did not immediately respond to The Post's requests for comment.
RBI CEO Josh Kobza said in a press release: [Curtis, president of Burger King US and Canada] and his team are working on a wide range of initiatives to build a more competitive Burger King restaurant base. ”
Deborah Darby, President and CEO of Carroll's, added: “We believe our team members will have additional opportunities as part of the larger RBI family, in the office, on the field, and especially in our restaurants. This includes long-time managers who may wish to do so.” Become a franchisee yourself. I look forward to working closely with Tom and the rest of the Burger King team over the coming months and years. ”
The Post also reached out to Burger King for comment.
