Burger King to acquire Carrols Restaurant Group

TORONTO — Restaurant Brands International Inc., parent company of Burger King, Tim Hortons, Popeyes, and Firehouse Subs, has reached an agreement to acquire Carrols Restaurant Group for $1 billion. Carrols currently operates more than 1,000 Burger King restaurants and over 60 Popeyes restaurants, according to the company. Carrols has operated Burger King restaurants since 1976.The acquisition is part of Burger King’s “Reclaim the Flame” plan to drive sales, growth, and franchisee profitability, the company said. The company recently invested $400 million in September 2022, which was aimed at remodels, improving operations, enhancing marketing and supporting ongoing technology and digital priorities.RBI recently restructured its business segments to reflect its new organizational structure, which includes five primary segments: Tim Hortons, Burger King, Firehouse Subs, Popeyes Louisiana Kitchen and International. International encompasses the aggregated outcomes from the operations of each brand outside the United States and Canada. The company’s previous segment reporting included four segments of Tim Hortons, Burger King, Popeyes and Firehouse Subs. RBI’s new segment reporting will give investors a more detailed view of the company’s performance and growth prospects, the company said.Burger King is the company’s second-largest segment at 35%, according to the company.“Carrols has demonstrated strong and improving restaurant operations over the years,” said Tom Curtis, president of Burger King United States. “This acquisition is an exciting accelerator to our Reclaim the Flame plan that is focused on relentlessly pursuing a better experience for our guests. We are going to rapidly remodel these restaurants over the next five years or so and put them back into the hands of motivated, local franchisees to create amazing experiences for our guests.”With the acquisition, Burger King said it is planning to speed up Carrols’ current rate of remodels to bring the acquired portfolio to a “modern image” over the next five years by investing approximately $500 million of capital, funded by Carrols’ operating cash flow, to remodel approximately 600 acquired restaurants that are not currently up to date for the modern image.In addition, Carrols operators, in partnership with Burger King’s operations teams, will operate the acquired restaurants. In the future, Burger King said it is planning to refranchise the vast majority of the portfolio to new or existing smaller franchise operators who live in their local communities. After refranchising the acquired restaurants, Burger King said it will maintain a company restaurant portfolio of a couple of hundred restaurants for innovation, training, and operator development purposes.J.P. Morgan acted as financial adviser and Paul, Weiss, Rifkind, Wharton & Garrison acted as legal advisers to RBI. Jefferies LLC acted as financial adviser and Milbank LLP acted as legal adviser to the Special Committee of the Carrols board of directors. The acquisition is expected to be completed in the second quarter of 2024. 



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