Hundreds of Burger King restaurants in the United States are going to disappear in the months ahead as the company reports the bankruptcy of some of its biggest operators. A series of challenges are threatening its empire as one of the largest fast food chains in America and the world right now.
New data reveals that Burger King is falling behind major rivals, including McDonald’s, Taco Bell, and Wendy’s, as revenue shrinks and its restaurants continue to lose popularity amongst US consumers. The numbers indicate that the company’s problems are getting exponentially worse in 2023. That’s why today, we are going to expose the factors that are accelerating the demise of this popular brand.
Not one or two, but three major Burger King operators have filed for bankruptcy so far this year. The biggest franchisees in the state of Ohio, Utah, and Michigan have reported severe cash flow problems and a steep decline in foot traffic, sales volumes, and profits for years. They have been operating several stores at a loss, and about 400 of them are going to close doors for good this year. In addition, the company’s executives shuttered 124 underperforming locations between January and May, and another 63 restaurants were eliminated from its portfolio last month, according to reports released by Restaurant Dive.
In all, roughly 10% of Burger King’s 7,400 locations in America are likely to disappear in 2023, industry estimates reveal. Right now, corporate executives are pressuring collapsing franchisees to sell their stores to other operators instead of closing them, which could result in financial losses to the tune of $300 million. Last month, the company joined a filing alongside various creditors and vendors, to force a sale of the remaining units managed by struggling franchisees.
The fast food chain’s US store profitability has been declining for over a decade now. In fact, between 2010 and 2020, Burger King’s annual revenue decreased by 36%. In 2010, the brand made an average revenue of $2.5 billion, whereas that number was only $1.9 billion in 2022. Even before the COVID-19 Pandemic Burger King began to see a concerning decline in revenue. For instance, between 2012-2013 alone, the company’s revenue fell by 41.6%.
The Buy One, Get One for $1 and 2 for $6 promotions on Whoppers and chicken and fish sandwiches proved to be much less popular than the 2 for $5 deal the chain had in 2020, creating a “considerable year-over-year gap” in BK’s earnings.
Despite the strategy shifts announced by the chain, those moves didn’t seem to be enough to help effectively boost its sales. In June, Burger King’s domestic same-store sales grew by 1.1%, but this was a very disappointing gain when compared to its biggest competitor McDonald’s, which grew its sales by 15%. Not to mention, Burger King lost its spot as America’s second-largest burger chain. In 2021, Wendy’s surpassed Burger King to become the nation’s No. 2 burger chain by sales. According to Technomic data, Wendy’s system sales increased by 4.8% last year. Burger King, meanwhile, dropped by 5.4% to $9.6 billion.
It’s clear that the industry giant is not as financially healthy as we all thought and if there’s something that we learned from the retail apocalypse and the bank collapses of earlier this year is that there’s no company that’s too big to fail. A few bad quarters can bring down an empire that has been built over decades, let’s just hope that’s not the case with Burger King.
Article and Video cross-posted from Epic Economist.
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too bad. I’ve always preferred their burgers to McD’s
Good burgers if you like the taste of charcoal.
The local McDonalds has lines around the block at breakfast and lunch. The local Burger King has zero cars with 1-2 customers in the dining room around the same times of day. I’m betting this BK is a goner!
We got a brand new one here in my town. Their service is awful. They’ll close soon I expect.
A real article would have explored possible explanations and spoken to franchisees to understand the problem from their perspective. Here are my guesses: Many locations are in undesirable areas. The menu is stagnant with no innovation or new products. Food quality is mediocre. Promotion and advertising are nonexistent. Management and staff are poorly trained and unmotivated. But who knows?
How would they grift off your observation?
Most know the why already. It’s all in the grift, gotta make that cheddar.
Stopped eating at BK a few years ago when they went out of their way to insult conservatives. I forget the exact circumstances now, but they became extremely political. About the time the impossible burger came out.
I had a Whopper recently after about 15 years. It didn’t taste the same as I remembered and I threw most of it away. The char-broil flavor was totally absent and it was just bland.
How to fix BK?
1) Get rid of the creepy King in your commercials. The “Big Headed” King was somewhat cute for 1 or 2 commercials 15 years ago…..now it’s a semi-gay, creepy thing.
2) Lower the prices across the board.
3) Automate the ordering process, thereby cutting staff.
4) Keep the restaurant CLEAN. Nobody wants to eat at a place that looks or smells like a dump.
Nobody local eats @ our BK. They hire tattooed ladies, and when that arm comes out the window with your food, it churns your stomach. You drive straight to the exit and shitcan it on the way out. You leave hungry. The only people that eat there aren’t locals.
Oh no, was it the Pride Whopper that started all of this? Or was it donating to LGBTQs for every chicken sandwich it sold on Sundays with a smirk in the direction of Chick-fil-a? Other than those two things I can’t imagine why this is happening.
Politics always comes back to bite them in the arse. Just keep your pie-hole shut.
It’s beginning to look more and more like Taco Bell will be fast food king after the fast food wars are over. So far McDonalds and Burger King are the causalities. Just like Demolition Man. Electric cars, no guns just zapper sticks, instant ticket dispensers for word violations…the three sea shells are next people get ready!
They should change the closing stores to drive-thru only format, like Checkers and Rally’s. With outdoor seating. Less overhead on smaller lot sizes too.
I ceased to be a customer when Ronald McDonald and The King were kissing. The Whopper was good, better than the cardboard from McDonalds. The fries are so-so and my dog won’t eat the chicken nuggets. Drive through service was slow.Taken together the King is not the king anymore. I patronize local burger joints, not the chain stores. Much better food and no woke politics.
A year or so ago their CFO came out as woke homosexual supporting puke and took a shot at Chic Filet. I stopped going to Burger King and maybe others did too for the same reason.
Bidenomics at work!