Burger King-owner Restaurant Manufacturers Worldwide is buying the most important franchisee of the quick meals chain, Carrols Restaurant Group, for $1 billion in money.
Toronto-based RBI introduced on Tuesday that it reached an settlement to pay $9.55 per share for Carrols, which operates 1,022 Burger King eating places throughout 23 states, plus 60 Popeyes places in 60 states.
The share value represents a 23.1% premium on Carrols’ 30-day quantity weighted common value as of Jan. 12, and a 13.4% premium on the Jan. 12 closing value, the press launch mentioned.
RBI added that it plans “to transform acquired eating places over the following 5 years, accelerating Burger King’s path to trendy picture.”
It’s calling the initiative the “‘Reclaim the Flame’ plan to speed up gross sales development and drive franchisee profitability.”
RBI mentioned its transaction with Carrols “follows the model’s preliminary $400 million funding introduced in September 2022 to drive prime quality remodels, enhance operations, improve advertising and marketing and help ongoing know-how and digital priorities.”
The 1,000-plus Burger King places beforehand owned by Carrols places generated roughly $1.eight billion in gross sales for the 12 months ended Sept. 30, 2023, per the press launch.
For reference, the typical singular Burger King franchise makes about $1.39 million in gross sales per yr, in keeping with monetary modeling platform SharpSheets.
RBI mentioned it “plans to take a position roughly $500 million of capital, funded by Carrols’ working money move, to transform roughly 600 acquired eating places that aren’t at present thought-about trendy picture.”
As soon as the outposts from Carrols’ portfolio are revamped, RBI mentioned it should “put them again into the arms of motivated, native franchisees.”
The deal is anticipated to be finalized within the second quarter of 2024.
Representatives for RBI and Carrols didn’t instantly reply to The Submit’s request for remark.
Within the press launch, RBI CEO Josh Kobza, mentioned: “It is a terrific instance of our dedication to place our capital to work to speed up development and help Tom [Curtis, president of Burger King US and Canada] and his workforce of their broader efforts to have a extra aggressive Burger King restaurant base.”
Carrols’ president and CEO Deborah Derby added: “We consider our workforce members will now have further alternatives as a part of the higher RBI household — in our workplace, within the discipline and particularly in our eating places, together with for long-time managers who might need to change into franchisees themselves. We stay up for working intently with Tom and the remainder of the Burger King workforce within the months and years forward.”
The Submit has additionally sought remark from Burger King.