Core Insights - Restaurant Brands International Inc. (RBI) has taken over Burger King's operations in China and is implementing a new strategic plan to optimize its business [1][2] Management Changes - Burger King China has appointed two new executives: Chen Wenrui as Chief Supply Chain Officer and Deputy CEO, and Xue Bing as Chief Transformation Officer [1] - Chen previously served as Chief Supply Chain Officer at Yum China, while Xue worked at McDonald's China [1] Store Closures and Openings - As part of its optimization strategy, Burger King China plans to close underperforming stores while opening 40 to 60 new locations, resulting in a net decrease in total store count by 113 stores by the end of 2024 [2][4] - The total number of stores is expected to decline from 1,587 in 2023 to 1,474 in 2024 [2] Sales Performance - The average annual sales for underperforming stores are reported to be below $300,000 (approximately 2.16 million RMB), indicating limited impact on overall sales [5] - Burger King China's system sales are approximately $700 million, with an average annual sales per store of about $400,000, significantly lower than other markets like France and South Korea [5] Future Growth Projections - RBI anticipates that the total number of stores across all its brands in China will grow by about 300 by 2027 or 2028, despite current challenges faced by Burger King China [7] - The company believes in the long-term potential of the Chinese market, despite the need for short-term adjustments [7] Competitive Landscape - Burger King China is facing stiff competition from other fast-food brands, which continue to expand rapidly, with significant gaps in store numbers compared to competitors like KFC and McDonald's [9] - The previous franchise agreement with the Turkish restaurant group was terminated early, with RBI acquiring Burger King China for $158 million (approximately 1.15 billion RMB) [9] Marketing and Promotions - Burger King China is enhancing its promotional strategies, including launching a 9.9 RMB discount campaign and other promotional events to attract customers [12] - The company is focusing on localizing its menu and marketing efforts to better connect with Chinese consumers [13]

Financial Data and Key Metrics Changes - The company is on track to deliver over 8% adjusted operating income growth for the year, which is a fundamental part of its long-term algorithm [15][16] - Franchise profitability for Tim Hortons exceeded $300,000 annually per unit last year, increasing by $25,000 [70] Business Line Data and Key Metrics Changes - The acquisition of Carrols was a significant step for the Burger King brand, aimed at changing the franchise landscape to more local owner-operators [9] - The company has taken over its Burger King business in China, which had been struggling, and is now focused on improving operations and ramping up advertising [10][11] Market Data and Key Metrics Changes - In the U.S., stable employment levels are seen as a positive driver for QSR usage, while Canada has experienced a slight uptick in unemployment, presenting a tougher environment [30][31] - The company sees stabilization in consumer spending in China, with plans to open 300 restaurants there as part of its growth strategy [38][39] Company Strategy and Development Direction - The company aims to build compelling business models for franchise partners globally, focusing on sustainable unit economics [18] - The strategy includes refranchising Carol's restaurants and Burger King China to local operators, simplifying the business model over time [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about addressing fundamental challenges in the business, including turning around the Burger King brand and improving operations in China [16][17] - The management believes that the investments made will yield high returns and strengthen the business foundation by 2028-2029 [21] Other Important Information - The company has added a new segment called Restaurant Holdings, which includes Carol's, Popeyes China, and Firehouse Brazil, to provide clearer financial disclosure [20] - The company plans to maintain a high level of capital expenditures in 2025 and 2026, with expectations to stabilize around $300 million thereafter [25][27] Q&A Session Summary Question: What has changed in the past year for Restaurant Brands International? - Management highlighted the acquisition of Carrols and taking over Burger King in China as significant changes [9][10] Question: What are the top three takeaways for investors? - The company is on track for 8% adjusted operating income growth, addressing fundamental challenges, and building sustainable business models for franchisees [15][16][18] Question: What is the path to improve ROIC? - The focus is on refranchising Carol's and Burger King China, with a long-term view of simplifying the business model [24][25] Question: How is the macro environment affecting different markets? - The U.S. shows stable employment, while Canada faces challenges; China is stabilizing, and Western Europe has mixed performance [30][31][33] Question: How is Tim Hortons performing in Canada? - Tim Hortons has maintained strong performance due to its value proposition, despite macro challenges [35][36] Question: What is the strategy for Popeyes in China? - The company is optimistic about Popeyes in China, focusing on building a strong local management team and improving operations [41][42] Question: How does the company manage coffee price pressures? - The company hedges coffee prices by buying forward, which helps mitigate volatility, and coffee costs represent a small portion of COGS [70][71][72] Question: What is the outlook for Tim Hortons' same-store sales growth? - Management expects continued outperformance beyond the long-term algorithm of 2% due to consistent improvements in product quality and service [76][80]