Restaurant Brands International Acquires Carrols Restaurant Group, Largest Burger King Franchisee, for $1 Billion in Cash

Miami, Florida – Restaurant Brands International, the parent company of Burger King, is set to acquire Carrols Restaurant Group, the largest Burger King franchisee in the U.S., in a cash deal worth around $1 billion. Under the agreement, Restaurant Brands will purchase Carrols at $9.55 per share. Carrols currently operates over 1,000 Burger King restaurants and 60 Popeyes locations.

The acquisition marks a significant shift in strategy for Burger King, whose restaurants have been predominantly franchised for the past decade. Currently, the company only owns 75 corporate locations. The move comes as Burger King aims to revitalize its U.S. business, which has been facing tough competition from rival Wendy’s.

In an effort to boost franchisee profits and drive demand, Restaurant Brands plans to invest approximately $400 million in remodeling 600 of Carrols’ Burger King locations over the next five years. The company will then sell these renovated restaurants back to franchisees. The remodeling initiative will be funded by Carrols’ operating cash flow.

CEO Josh Kobza highlighted the strategic nature of the acquisition, stating, “This will allow us to really focus our attention on accelerating remodels and being thoughtful about how to refranchise this restaurant network into smaller packages, with new and existing franchisees who live close to the communities where they own the restaurants.”

The deal is expected to be finalized in the second quarter of 2024. Following the transaction, Burger King plans to retain a select number of restaurants for “strategic innovation, training, and operator development purposes.” It is projected that the majority of Carrols’ locations will be sold off within five to seven years.

Carrols, which recently reported a 7.2% rise in same-store sales for its Burger King locations, has consistently outperformed the rest of Burger King’s U.S. system. The acquisition will further strengthen Restaurant Brands’ presence in the fast-food industry and its ability to drive growth in the highly competitive burger segment in the United States.