In the wake of rising regulations and economic strain, a beloved fast-food giant is forced to shut down hundreds of locations, raising concerns about the true cost of progressive policies.
Burger King, a company once cherished by many, is now forced to shut down as many as 400 restaurants this year. This unfortunate event is due to several of these establishments failing to generate sufficient profits. It seems that the Democratic Party’s persistent push for higher minimum wage and other regulations is taking its toll on businesses, further crippling the economy.
The New York Post reports that Burger King closed 124 US locations in just the first quarter of this year, leaving approximately 7,000 restaurants remaining in America. This is quite a departure from the norm for the fast-food giant, which generally only closes a few hundred locations annually.
Are you keeping count of the many AMERICAN stores closing in this country? Looks like something on purpose https://t.co/Ouz4gHE2pp
— 🫵🏾 Wayne DuPree (@WayneDupreeShow) May 6, 2023
According to The Sun, RBI Chairman Patrick Doyle stated that underperforming stores would be phased out. Last week, during the company’s earnings call, he said, “There will always be a minority who aren’t dedicated enthusiastic operators, and that’s OK.” He continued, “We’ll work with them to leave the system and move on to do something else. There simply is no room for franchisees who are not willing or able to work hard to operate restaurants that are better than the system average over the long term.”
In a desperate attempt to save their sinking ship, Burger King introduced the “Reclaim the Flame” plan in September. This strategy included increased advertising, advancements in restaurant technology, upgraded kitchen equipment, and building remodeling. Although there was an 8.7 percent increase in Burger King’s US sales during the first quarter compared to the same period in 2022, according to Food Business News, it’s clear that their efforts might not be enough.
Joshua Kobza, the CEO, addressed the issue of dwindling customer traffic during the earnings call. He admitted that they needed to focus on improving this aspect throughout the year. However, he optimistically mentioned seeing “sequential improvements” and believed that the team is committed to growing traffic for the rest of the year.
On a lighter note, Kobza said customers could anticipate a moderation in pricing increases. He also hinted at the possibility of successful franchise operators being given the chance to take over stores managed by less successful operators. While Burger King’s worldwide business saw a 12.3 percent increase in sales, it’s evident that the situation in the United States is far more challenging.
Kobza commented on the promising performance in countries like France, Germany, Spain, and Australia, as well as the sales recovery in China post-COVID restrictions. He emphasized that digital ordering would continue to be a significant driver of growth in the coming years.
However, there’s no denying the fact that Burger King is struggling in the US, with 90 restaurants in jeopardy following Toms King Holdings’ filing for Chapter 11, as reported by Restaurant Business Online. About 82 of those locations will be handed over to new operators in deals worth $33 million.
The sad reality is that the Democratic Party’s policies are forcing businesses like Burger King to take drastic measures to survive. Instead of supporting economic growth and job creation, it seems that their regulations are pushing more and more businesses towards the edge of collapse.
Sources: WesternJournal, New York Post, The Sun, Food Business News
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