Restaurant Brands Slows Burger King Remodeling Program as Costs Stay Elevated — Update

By Adriano Marchese

Restaurant Brands International is slowing the pace of its Burger King remodeling program as higher construction and materials costs force the company to push out its timeline for modernizing its locations.

The fast-food franchiser was aiming to have 85% of Burger King restaurants modernized by 2028, but Chief Executive Joshua Kobza said Thursday that rising costs are slowing its remodeling campaign.

"The current cost environment is influencing the pace of remodel activity and as a result, it will take a bit longer to reach that level," Kobza said on call with analysts to discuss fourth-quarter results. Franchisee profitability weakened across most brands in 2025, reducing their capacity to invest, Kobza said.

Shares fell 5.2% to 90.94 Canadian dollars ($66.98).

"Reclaim the Flame" is Burger King's multi-year turnaround plan started in 2022, backed by a $400 million investment to revive the brand through better operations, increased marketing, and a sweeping restaurant refresher push to lift sales and franchisee profitability.

RBI posted lower franchisee profits in 2025, largely due to high input costs for items such as beef and coffee. On its quarterly earnings call, Chief Financial Officer Sami Siddiqui said Burger King US beef prices rose more than 20%, contributing to commodity inflation of 7% last year, something that is likely to remain elevated in 2026.

Popeyes franchisee profitability also declined, and Tim Hortons Canada faced higher tariffs and commodity costs, adding to the pressure.

Weakening franchisee economics may slow Burger King's Reclaim the Flame investments. It may also limit franchisees' ability to buy remodeled Carrols restaurants from RBI, which acquired the company last year, according to Scotiabank analyst John Zamparo.

While management reaffirmed its 8% adjusted operating income growth target for 2026, the outlook includes higher capital spending and some international segment losses. Much of the growth depends on momentum from its remodeling campaign, franchisee profitability, and RBI's ability to sell modernized Carrols restaurants back to franchisees.

In the fourth quarter, system-wide sales grew at a rate of 5.8% compared with 5.6% a year earlier, taking system-wide sales to $12.13 billion, from $11.28 billion.

Total revenues rose to 7.4% to $2.58 billion, above consensus Wall Street expectations

Comparable sales rose 3.1% in the quarter, with Burger King up 2.7%, Tim Hortons rising 2.9%, and Firehouse Subs up 2.1%. Popeyes extended a run of softer results, with comparable sales falling 4.8%.

Net income fell to $113 million, or 60 cents a share, down from $259 million, or 79 cents a share, in the comparable quarter a year ago. Adjusted earnings were 96 cents a share, beating analyst forecasts by a penny.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

February 12, 2026 12:28 ET (17:28 GMT)