Meridian Restaurants Unlimited, a Burger King franchisee, has filed for bankruptcy, leading to the closure of 27 locations across seven US states. The franchisee cited rising food costs and poor sales as reasons for the move. The operator has reported a debt of $14m that piled up due to a tight market for fast-food outlets where customers increasingly favor competition like Wendy’s, which overtook Burger King as the US’s second-largest chain.
Meridian Restaurants Unlimited further stated that it might shut more restaurants as it negotiates rental and operational improvements with landlords. EYM King of Michigan, another franchisee, will also shut down 26 restaurants after missing a deal with the Department of Labor.
The Toronto-based firm that owns Burger King, Restaurant Brands International (RBI), has also announced that it plans to close up to 400 Burger King stores in the US. The recent bankruptcies of two of the company’s franchisees and low sales contributed to the decision. RBI CEO Josh Kobza explained that most of the closures will come from low-volume stores, limiting any adverse impact on its sales.
Restaurant Brands International’s focus is now on expanding in international markets like the UK, India, and China, where it aims to get more Tim Hortons and Popeyes Louisiana Kitchen restaurants. The company plans to make more franchises typically owned and operated by locals with fewer than 50 locations.
Burger King continues to stand out from its competitors with a focus on its popular Whopper burger. The company’s Q1 2023 sales grew by 12.3%, driven by a global 11.8% increase in system-wide sales in the past three months of 2022. To remain a market leader in the restaurant industry, Burger King aims to refresh its marketing strategies and instill a new company culture across all its outlets. The brand will also pursue a franchising strategy rewarding strong-performing operators with smaller numbers of restaurants, while encouraging less successful or unwilling operators to sell their locations.
In conclusion, the competitive fast-food market has forced Burger King and its franchisees to rethink their strategies. Despite the recent closure of some of its outlets, Burger King remains committed to expanding its international presence while standing out in a highly competitive market.
