Good afternoon, everyone, and welcome. My name is Kendall Peck, and I lead the Investor Relations Team at Restaurant Brands International. We know today is a very busy day, so we appreciate you all taking the time to join us, whether in person at the New York Stock Exchange or live via webcast. Today you will hear from RBI CEO Josh Kobza and Executive Chairman Patrick Doyle. Josh and Patrick have about an hour of prepared remarks plans. Following their prepared remarks, we'll open the room for a Q&A session. If you would like to ask a question, please raise your hands and wait to receive a microphone before asking. While Josh and Patrick won't be walking through slides today, following today's remarks, we will be posting a presentation to our Investor Relations webpage under Events and Presentations.
This presentation will provide an overview of RBI and cover some of the key topics Josh and Patrick plan to address here today, including our new long-term guidance. On that note, I have the exciting job of reminding you all that today's remarks will contain forward-looking statements. These statements are subject to various risks and uncertainties set forth in our SEC filings, which can be found on our Investor Relations webpage. With that, I'll hand it over to Josh.
All right. Good afternoon, everyone. Thank you so much for joining us today, online or in person here at the New York Stock Exchange. For everyone who's with us here in New York, I hope you all enjoyed your lunch, and ask you to please join me in a round of applause for our culinary teams from Tim Hortons, Burger King, Popeyes, and Firehouse Subs who brought this all together. I was pretty impressed by those of you who ventured into our wings, both for their spice, and so thank you for being brave. It's been about a year since Patrick and I were here on this same stage in front of all of you. I think our business leaders and teams have made really good progress in the last year, and we highlighted a lot of that progress in our earnings call two days ago.
Today, we'll use our time together to share our vision for RBI's future, and for the first time, we'll add long-term guidance to make this vision even more concrete. We want you to share the confidence we have for the long-term outlook of our business and the fundamental drivers of our business. To start off, I'd like to remind you all how much we've evolved as a company since we publicly listed about 12 years ago. At that time, we had just one brand, Burger King, with about 13,000 restaurants and $16 billion in system-wide sales. Since that time, we've grown significantly. We acquired three amazing restaurant brands, Tim Hortons, Popeyes, and Firehouse Subs compelling returns, and offer a ton more growth in the years ahead.
Through these acquisitions, we solidified ourselves as a strong global player in the four largest segments of the quick-service restaurant business. We also more than doubled our restaurant count, and we increased our adjusted operating income by over four times from 2012 to 2023, and we grew our adjusted EPS. We've also delivered a compelling total shareholder return. It's been about 550% since Burger King's IPO in June of 2012, and we outpaced the S&P 500 by a nice margin. When you think about all that, it feels like we got a lot of things right. But for those of you who followed us over the years, I think we objectively missed a few opportunities at the same time. In more recent years, we've become better listeners and have seriously taken into account the advice we've received from our franchisees, our business partners, and all of you in this room.
Because of this good advice, we've become more transparent in our communication and more collaborative with our franchisees. Our evolution as a company isn't just stylistic. We've deliberately pushed more accountability to our business teams. We just added a fifth reporting segment, and we've demonstrated our readiness to put our capital to work to accelerate big priorities, like investing in Burger King U.S. through our Reclaim the Flame program and our pending acquisition of Carrols', our largest franchisee. Today, we'll take another step that many of you have asked for: sharing long-term guidance. I think we're finally ready to do this because our business leaders and teams have done the work to develop a strong base of fundamentals, and those fundamentals are the building blocks we can trust and rely on to drive future business performance.
When you look across our company, we operate in the top four global quick-service restaurant categories, each of which is expected to grow at least 5% annually through 2027. But despite these industry dynamics, which are helpful as a benchmark, we know that restaurant brands who focus on delivering the fundamentals of our business have consistently proven to be the most successful. I'm talking about quality, service, and convenience. We have the best quality food and beverages in all of our segments. The quality of our hero products, some of which you tried today, whether they're coffee and baked goods at Tims, fried chicken at Popeyes, flame-grilled burgers at Burger King, and our hot subs at Firehouse, they're all a distinct advantage for us, one that makes our brands attractive both for guests and for franchisees.
But having the best quality food and beverages doesn't necessarily mean you're serving the best. Quality in our world is delivered with repeatable precision, as Tom likes to say, order by order, million times every day. The key to serving high-quality food and beverages quickly is anchored in a culture of service and training. Culture comes from the top, from our brand leaders and from the franchise partners that we work alongside. Over the years, we haven't always proven our commitment to get service right, at scale, consistently, over time in all of our restaurants. But that started to change more recently, really beginning with Axel's Back to Basics plan that we put together for Tim's in Canada, and which is now about 5 years into its journey. We've also done this more recently with Tom's focus on improving operations with Burger King's Reclaim the Flame plan.
Our commitment as a company to being a better franchisor has also given us the credibility to hold our franchisees more accountable to delivering consistently great operations in all of our restaurants. The vast majority of our franchisees do a terrific job delivering the standards our guests expect and deserve. The other side of that coin is that for those franchisees who aren't up for delivering the brand's standards, we've taken a stronger position over the past year or so to help them improve or to help them exit our brands. The third fundamental we have to consistently get right is improving convenience for our guests. This means adding new restaurants in attractive locations, improving existing restaurants through renovations, and strengthening the digital capabilities of our brands. Opening new doors has historically been one of our key strengths.
Our teams love bringing a new brand to market and seeing the lineups around the block, like you saw in some of those videos today. We've developed an amazing capability to do this over the past 12 years. Our growth efforts are anchored by a network of aligned, well-capitalized franchisee partners who are committed to being excellent operators and hands-on developers. We're taking a bit longer to ramp back up to the historical growth rates that we had pre-pandemic, but we feel confident that we have a path to start delivering the unit economics and the unit growth you came to expect of us pre-pandemic, especially as we continue to improve unit economics for our franchisees. On restaurant image, internationally, we operate with more than 75% Modern Image around the world. Here in the U.S., specifically at Burger King, we allowed our portfolios to fall behind.
We're actively addressing that through our Reclaim the Flame investment and our pending Carrols acquisition, which collectively will bring us to a similar 75% Modern Image in the U.S. within the next five years. We're also committed to providing even more convenience to guests through improved digital experiences. We need to meet our guests wherever they are, whether in our restaurants, on our apps, or with our third-party delivery partners. At our restaurants, we found that transforming the front-counter ordering experience into self-serve kiosks provides a more positive ordering experience for guests and frees up time for team members to focus on order execution and guest service. Given that a majority of our business in North America comes from drive-throughs, we also know we need to enhance an already pretty convenient experience in our drive-throughs.
We're in the process of developing a fully digital drive-through, including testing this concept in several locations in the coming few months. This isn't a journey of being digital just for digital's sake. We know that our digital guests typically visit us more frequently, they spend more when they visit, and they're more loyal over time. At the same time, and perhaps even more importantly, digital ordering often means less pressure on our team members, greater order accuracy, and improved profitability for our franchisees. I'm confident that the repeatable precision across quality, service, and convenience will mean sustainable long-term growth for our business. So, based on the fundamentals we're already delivering, let me tell you what we believe that looks like for RBI in the coming years.
Over the next 5 years, we believe consolidated performance, on average, should be comparable sales of 3%+, 5%+ net restaurant growth, 8%+ in system-wide sales growth, and adjusted operating income that will grow at least as fast as system-wide sales growth, effectively 8%+ as well. I want to provide one important assumption. This guidance assumes 2%-3% inflation, so a more normalized inflation environment, and modest but consistently positive consolidated traffic growth. While we don't plan to provide annual guidance against this algorithm, we do think it's important for our first year to let you know that the mix in 2024 will likely be a little different.
As I mentioned on Tuesday during our earnings call, given pressures in China, we expect consolidated net restaurant growth to be closer to the mid-4% range in 2024 and expect to grow that percentage over time as we see improvements in China and generate more growth from a broader set of brand and country pairs. That said, for 2024, we feel good about our path to delivering 8%+ in system-wide sales growth for the year and seeing efficient conversion of sales to profitability. You should take this shift in approach to providing guidance, something we've historically shied away from, as a sign of two things. First, our effort to provide greater transparency and accountability to our investors. Second, the confidence that Patrick, our board, our leadership and team and I have in our ability to deliver this five-year plan.
To be clear, I don't expect that all five of our segments will achieve all four elements of this guidance each and every quarter. Unexpected things happen in our business, and we'll manage through them over time. We may also make investments in one period to drive compelling returns in another period, so I do expect that there will be quarters or even the odd year that won't match up exactly with this guidance. One of our strengths as a company has been to maintain a long-term view and to make the right long-term decisions, even if those come with short-term implications, and we'll continue to do that. You should expect our underlying fundamentals and long-term mindset should result in the anticipated business performance that I've just laid out over the next five years.
Put another way, delivering against this guidance will mean that we should have at least $60 billion in system-wide sales, at least 40,000 restaurants, and at least $3.2 billion in adjusted operating income by 2028. So how do we get there? Well, while we're not going to provide segment-level detailed guidance, I do want to take a few minutes now to walk through the key drivers of how each business will contribute to our overall consolidated growth over the next few years. Let's start with Tim Hortons, our largest business that drives 43% of our worldwide adjusted operating income today. Tim's is an amazing brand, with the strongest home-market brand love I've ever seen and incredible community ties. I think the fact that the brand's logo is literally a maple leaf tells you all. Tim's clearly showcases how consistently delivering quality, service, and convenience drives compounding results.
At the end of 2019, we put in place an experienced and stable team in Canada under the leadership of Axel, who grew up in the restaurant business himself. This team developed a thoughtful plan, Back to Basics, to enhance our food and beverage quality, improve our service levels, and modernize the guest experience. Importantly, Axel and team really strengthened the relations that we have with our restaurant owners in Canada, rebuilding trust and creating much-needed alignment with the community around our plans. Today, as a result of their efforts, Tim's is delivering quality products, great operations, and unmatched convenience to Canadians. Tim's is the hands-down leader in coffee, baked goods, and breakfast sandwiches across Canada. We implemented fresh brewers and water filtration to enhance the quality of your coffee no matter where you are in Canada.
We also improved ingredients for our baked goods and introduced fresh cracked eggs for our breakfast sandwiches and wraps. These quality improvements since 2019 have helped us to maintain our leadership positions, including selling over 70% of every hot brewed coffee, over 65% of every baked good, and over 60% of every breakfast sandwich and wrap in Canada in 2023. Looking out over the next five years, we're also working to grow our core products while expanding in growth segments that we've talked about, like cold beverages and PM food, both of which you had a chance to try today. On cold beverages, Canada has a large and growing cold beverage market of 2.7 billion servings annually. In that market, we currently only have 25% market share. We see this as a compelling, decades-long opportunity. Many of us in the U.S.
Often forget that Tim's already has a solid cold beverage business in Canada with our Iced Capp products. We built that leadership consistently over time and in 2021 launched Cold Brew, growing the overall cold brew market in Canada by seven times. Victoria, our director of beverages, who's over there and served us a bunch of wonderful beverages today, followed the Cold Brew launch with Real Fruit Quenchers in 2022 and then added a sparkling twist to our quenchers in 2023. If you haven't had a chance to try them yet, I highly encourage you to stop by your nearest Tim's or the table over there and check it out. I'm personally often caught sneaking into the Test Kitchen in Toronto, which I think Talis and Victoria will attest to, to get my favorite, which is our orange ginger flavor.
We've also seen really good traction from Cold Brew and Quenchers. In 2019, one in every six beverages sold at Tim's was cold, and today that's shifted to one in every four. Having a strong cold beverage lineup is also key to delivering against another important goal for Tim's: PM Daypart expansion. Canada has a large PM food market that delivered more than 1.6 billion servings of lunch sandwiches, wraps, bowls, and salads to Canadians in 2023. With nearly 4,000 restaurants and well-established traffic patterns in the morning, we know that the right lunch, snacking, and dinner products can drive new traffic patterns from the same guests in the afternoon and evening.
System-wide sales from PM foods surpassed CAD 1.7 billion in 2023, up from CAD 1.2 billion in 2020, and we've seen our PM food market share increase to nearly 9%, up from 7% in 2021, and moving us to the fourth-largest PM food player in Canada by serving share in 2023. We believe that with the multi-year pipeline Chef Tallis and team have planned, including savory pastries and flatbread pizzas, which are currently in test, that we have a path to grow into double-digit market share in the PM food category over the next few years. Awesome menu innovation is only as good as the ability to execute it in our restaurants. Tim's already has an amazing culture of operational excellence that is really led by our restaurant owners, who work directly in their restaurants every day.
I could go on for hours recounting the incredible stories of Tim Hortons' franchisees, like Danny Murphy, who lives in Prince Edward Island. He's been with the Tim Hortons brand for decades and joined me and Patrick for lunch on Monday. Their stories are inspiring and what makes Tim's so special to all the communities that we serve across Canada. We've also been proud to see that even while expanding into PM food and cold beverages, December drive-through speeds reached 35 seconds, levels we haven't seen in a few years, and our already strong guest satisfaction scores improved to the highest level seen since the inception of the metric in 2019.
The frequency of traffic from Canadians also allows the team to lean in heavily on our Tim's digital app, and our digital Tim's Rewards program remains the number one food and beverage loyalty program in Canada, with 5.3 million monthly active users as of year-end 2023. Canadians who are part of our loyalty program visit us six times more often than non-digital guests and, as a result, spend five times more. The team is hard at work to drive further adoption of this great program. Development is another key aspect of convenience that you'll hear me talk about throughout today. As it relates to Tim's, with nearly 4,000 restaurants in a country of over 40 million people, we already have one of the most penetrated and accessible restaurant concepts anywhere in the world.
Practically, we expect relatively slow unit growth in Canada over the next five years, with potential upside to expand our footprint as the Canadian population continues to grow. We do see runway for the brand in the U.S. and expect to grow from around 600 restaurants today to around 1,000 by 2028. We're proud of the early progress our Tim's U.S. president, Katerina, and her team have made on this front, including signing over 200 new restaurant commitments and development agreements for six new markets around the country over the past 12 months alone. I'll now turn my comments to our international business, which, as a reminder, includes the consolidated results of our four brands outside of the U.S. and Canada.
International is the second-largest contributor to our global earnings today, at around 27% of our operating income, and is expected to be the largest contributor to our adjusted operating income growth over the next 5 years. We ended 2023 with nearly 14,750 restaurants in over 120 markets around the world. Since 2017, David and his team have done a great job growing the business and delivered, on average, mid-single-digit comparable sales, 8% annualized net restaurant growth, and 12% organic system-wide sales growth. International has a pretty simple, nearly fully franchised business model with a ton of white space. We effectively take the core elements of our brands, localize them, and work with ambitious franchise partners to bring them to new markets and guests around the world.
Our culinary innovation, marketing, and quality assurance teams work with suppliers and our franchise partners to tailor menus to the diverse guest profiles that we serve. In some markets, like France and Spain, this means developing premium and gourmet burgers with local ingredients, like arugula or brie, anchored by Burger King's key differentiator of flame grilling. In other markets, like Tim's in South Korea, it meant developing a stronger taste profile for our coffee. And for Popeye's Indonesia, it means significantly turning up the spice level on our chicken to meet local taste expectations. In addition to localizing menus, our partners are committed to delivering great service and a seamless digital experience. This is clear when you look at our Google ratings, which are, on average, better than our peers and improved meaningfully over the last couple of years.
We found guests and team members generally prefer the ordering experience with kiosks, which is why we've rolled out kiosks in so many of our international markets. In some of our markets, like in Spain, we've removed the front-counter ordering entirely and shifted to be 100% digital, with kiosk ordering the only in-store option. In addition to improving the overall guest experience, we're seeing kiosks deliver a high single-digit average checkup lift in our Burger King restaurants compared to front-counter orders. With our international business already generating over 50% of sales through digital channels, it's important we continue to focus on new ways to further enhance the guest experience through digital. While everything I've discussed will help drive comparable sales in the years ahead, restaurant development will ultimately be the largest driver of long-term growth for the business, so I'll focus the next couple of minutes on that.
We have a strong network of franchise partners around the world and between our four brands. We have a very well-balanced cadence of lifecycle development, which I think is important to keep in mind when thinking about our growth trajectory going forward. What keeps me, David, and the team really motivated is the fact that we really only have one brand and market combination that's Burger King Puerto Rico, where we're fully mature. I was just there in December with Renato, who runs our Latin America and Caribbean business, and I think I saw a Burger King on pretty much every major road that we drove down, sometimes multiple Burger Kings. It kind of felt like being in Toronto and seeing Tim Hortons, similar dynamic. But outside of Puerto Rico, we see opportunities in pretty much every other market for Burger King.
I won't bore you by rattling off a long list today, but we'd be remiss not to flag the opportunity in one of our strongest markets, France, where we've generated over $2 billion in system-wide sales last year with approximately 515 restaurants. To put that in perspective, the largest player in France has over 1,500 restaurants, so we see a big opportunity for future development in this market alone and at a high contribution to system-wide sales. Going back just 10 years, there were almost no Burger King locations in France, and our success there over the past decade is perhaps the best example of what our brands can accomplish when we find the right local partner and get the restaurant returns right. For Tim's, Popeye's, and Firehouse, almost all markets are still in the early phases, with many on our agenda to still get started.
Burger King's global network of suppliers and master franchise partners has been an important and differentiating asset as we look to bring Tim's, Popeyes, and Firehouse Subs to many more guests around the world. Since 2014, David and team have introduced Tim's to 13 new markets and expanded the Tim's footprint to over 1,200 restaurants outside of the U.S. and Canada. Meanwhile, Popeyes is now in nearly 40 markets around the world with around 1,200 restaurants. Tim's and Popeyes International have grown system-wide sales over 50% for the past two years to a combined $1.5 billion. While still smaller contributors to our overall adjusted operating income, if we can keep delivering strong double-digit system-wide sales growth, we'll see the benefits compound over time. Firehouse Subs add even more opportunity to serve guests in the years ahead.
In a very short period of time, Firehouse has expanded from Puerto Rico to Switzerland and Mexico, with more to come, including the UAE, upcoming this year. We're often asked to provide a specific breakdown of where restaurant growth will come from over the next 5 to 10 years. An easy exercise to do is to look at our major peers overseas and call that the opportunity. We know that not all these markets will work, or that some markets, like China, may take longer to work. But we also know that macro factors may arise that cause some stops and starts along the way. Even so, we have a lot of confidence that we can deliver at least 7,000 net new restaurants in our international business over the next 5 years. We should also benefit from the formalization of the restaurant sector planning out emerging markets.
This will be a multi-decade process, allowing us to scale our business for decades to come. I see this everywhere I travel, and India is probably one of the clearest examples. I first visited our operations there about 10 years ago and was back in Bangalore and Delhi this past year. The pace and scale of development across malls, roads, and other infrastructure today is breathtaking and will support many years of growth for our brands and the broader restaurant space. This tailwind won't be unique to us, but another great aspect of the international business is that it isn't a zero-sum game. There's plenty of room for great brands to grow, and I have tons of confidence that we have the right brands, partners, team, infrastructure, and experience to benefit for decades to come. All right. I have water before I go to Burger King. All right.
Shifting now to Burger King in the U.S. and Canada, which drove about 18% of our adjusted operating income in 2023. Tom and his team are now into their second year of executing the Reclaim the Flame plan and are making really great progress, including delivering positive traffic growth in Q4 and over $205,000 in average restaurant-level franchise profitability in 2023. That's up nearly 50% year-over-year and nicely ahead of our Fuel the Flame 2024 year-end target. The team has also built much-needed trust and alignment with the franchise community and are taking this another step forward with our upcoming acquisition of Carrols, the largest franchisee in our Burger King U.S. system. Our strategy here is pretty simple.
We want to accelerate the remodels of all the restaurants in the portfolio, leveraging their operating cash flows, and then refranchise the restaurants to move from one larger franchisee to roughly 30-40 smaller franchisees. This accelerates our path to improving the guest experience through Modern Image and community-based franchisees so that we can do what we do best: sell the best-tasting burger in America. We feel really great about the quality of our flagship product here at Burger King, so I'll be brief on this one. The Whopper has consistently voted the best big burger in blind taste tests, something we take a lot of pride in and will continue to reinforce. We consistently hear that our guests love our flame-grilled taste. That's why the burgers are better at Burger King.
It's no surprise our recent commercials around "It's not the same without the flame" resonated so well with our guests. The brand's marketing and menu innovation will remain focused on reinforcing core brand equities and enhancing the quality of our advertising, both of which have already yielded strong returns for us and for our franchisees, as you can see in our recent results. Advertising is only as good, though, as the product you're putting in your guests' hands, and Tom and his team have been very focused on delivering significantly improved operations over the past two years. Many of you know that Tom was a franchisee for Domino's for nearly 20 years before joining their corporate team and ultimately leading operations for them.
I remember the first time I ever met Tom, and he talked so passionately about the pride he took as a restaurant owner in exceeding the expectation of his guests each and every order. Tom has brought this grounded view on operations and the mindset needed to win in the restaurant industry to everything he and the team are now doing at Burger King, instilling a culture of repeatable precision in everything that we do. This started with the expansion of our field teams in 2021 and the addition of the franchise success system to help provide franchisees with clear, measurable data on areas of opportunity. The team then developed targeted training programs like Gold Standard Whopper and Gold Standard Fries, designed to ensure that when guests come to Burger King after seeing our new advertising, they're served hot, fresh, and fast food each and every time.
We reinforced the importance of execution, team member-friendliness, and having clean and welcoming restaurants with Royal Roundtables, which touched over 8,000 restaurant general managers in over 40 cities around the country in 2023. The program was so well received that we decided to bring it back again this year. Patrick and I joined one in Miami a couple of weeks ago, and actually, our New York roundtable is taking place right up the street here right now. Burger King has demonstrated the quantifiable impact of training investments and service improvements on business performance. We estimate that about half of our 12-point improvement in same-store traffic from Q4 of 2022 to Q4 of 2023 was attributable to operational improvements. Our work to help underperforming franchisees improve through targeted business plans, leveraging our Franchise Success System dashboard, is also yielding results.
We saw over 40% of our system improve key operating metrics in 2023 by at least 20%. In the cases where weaker franchisees were unable or unwilling to put in the work, we've been able to transfer their restaurants to more locally engaged franchise partners. We are very focused on this last point: having a much larger number of more locally engaged operators. And this is a significant driving force behind our pending acquisition of Carrols'. Carrols' has a passionate group of restaurant operators that we believe have the potential to turn into strong, hands-on franchisees. Another key focus area for Tom and his team is Modern Image, just to help everyone follow the plotline on our path to fully Modern Image in the U.S. Before our Reclaim the Flame plan, we were on track to achieve mid-50% Modern Image by 2028, largely driven by normal course remodels.
Our September 2022 investment moved that up to about 65%, and our Carrols acquisition moves that up again to about 75% over the same period, with a bit more work to do to get us to the 85%-90% range that we really want to achieve in the next five years. Earlier this month, I worked in one of our new Sizzle restaurants in Miami and can tell you that Modern Image really does matter. Not only is the restaurant beautiful and enticing from the outside, it offers a great environment for guests and team members and includes kiosks, which help to make for a better overall experience. I don't know if it was the new restaurant or the crowns we were handing out, but I've got to tell you we definitely got us a lot of smiles at that restaurant that day.
We're only about 15% of the way through deploying our $150 million Royal Reset remodel investment. As I shared with you on Tuesday, our efforts are yielding better than expected results, including 20% average sales uplifts net of control for the approximately 50 remodels that have been open for at least six months. While we are encouraged by these initial results, about a third of those restaurants have been scraping rebuilds, which are delivering even greater uplifts. So we expect the average uplift may drift into the teens over time as the mix of formats shifts more towards full remodels in the future. I know the big question everyone has on this topic is whether there'll be another round of remodel investments to take our 75% Modern Image closer to 85 or 90%. The answer is yes. We are really excited about this opportunity, especially given these early results.
We'll be working through what a next phase might look like with our franchisees and expect to give you a more specific update on our progress later this spring. As I think about Burger King over the next five years, especially in the context of our other four segments, I think this business will be the clearest proof point of the positive impact from delivering enhanced operations, enhancing our franchisee base, and modernizing our assets. We aren't assuming meaningful unit growth contribution from Burger King U.S. over the near to medium term, so the measure of success here is really franchisee profitability and improving the cash-on-cash returns for our franchisees. Ultimately, we'd expect improvements in restaurant image, guest experience, and unit economics would drive growth in unit count and market share in the U.S. and Canada over the longer term.
While Burger King earnings will likely grow at a slower pace than our consolidated outlook in the near term, we should see a nice acceleration in the outer years as we start generating strong returns from the investments we've been making in the business. With that, I'll turn now to Popeyes. Popeyes today comprises about 10% of our adjusted operating income. We're now seven years post-acquisition, and I think the numbers pretty much speak for themselves. Looking at the period from 2016, just before our acquisition, to 2023, we've grown global system-wide sales from $3.3 billion to $6.8 billion. We increased adjusted EBITDA from around $90 million to roughly $280 million, and we've grown the global restaurant footprint by about 70%. Through that time, we've also become the number two chicken QSR player in America.
A key driver of this success is the quality of our product offerings and the resonance of the brand. Our culinary team, led by Chef Amy, has a proven track record developing and launching amazing, high-quality products like our chicken sandwich, which completely reset the quality bar across the industry and helped drive an over 25% increase in average unit volumes for the system. Amy and team, some of whom are with us here today and prepared the wonderful products we all got to eat for lunch, have brought the same rigor to our recent Wings launch with five amazing flavors and quickly drove Popeyes to now be the number three player in quick-service restaurant Wings. Our marketing team reinforces these efforts with initiatives that really cut through the noise. Let me give you a quick example. Popeyes is in the quick-service restaurant business.
However, our food is anything but rushed or transactional. Our chicken is marinated for over 12 hours, and then it's battered, breaded, and fried right in every restaurant, the same way you'd make it at home. Our marketing campaign, "We don't make sense, we make chicken," clearly showcased our commitment to quality and not taking any shortcuts. We've seen clear benefits of illustrating Popeyes quality differentiation to guests, including favorable movements in our brand perceptions. We know that guests taste the quality difference when they try our food, and we're finding increasingly effective ways to communicate what makes our brand and our products so special.
While we don't take shortcuts on quality, we certainly do have an opportunity to make it easier for our team members to work in our restaurants, which will help improve guest order accuracy, speed of service, and overall guest satisfaction, all of which are closely linked with sales and profitability. That's why Sami and his team launched the Easy to Love plan in 2023. You've heard me talk about this plan before. While each piece is important for driving long-term success, I think the biggest unlock is the design of our kitchens. The team has spent two years working with franchisees, visiting newer international markets to see best practices and developing a redesigned, easier-to-run kitchen to make working at Popeyes easier by implementing new equipment and technology while simplifying some of our processes. Let me give you a few examples of each.
On equipment, we're adding automated batter makers that convert what was a labor-intensive and somewhat inconsistent operation into an almost fully automated, perfect product every time. Everything comes together with a brand new modular production line that centralizes fulfillment of every order in one place. This means our team members are spending less time cooking, prepping, and walking from station to station, unlocking more time to serve our guests. In technology, we're introducing digital drop charts to take the guesswork out of production, and also sticky label printers to help us to improve order accuracy. Everything the team is doing is further supported by more efficient labor management and hands-on training to get the most out of our Easy-to-Run Kitchen.
While we're still in the early days, the results so far have been very exciting, with improvements in accuracy, speed, and guest satisfaction, all accomplished through an upgrade that can take as little as one night to implement. We'll be working closely with our franchisees this year to expand Easy to Run across more clusters of restaurants that will then set us up for a broader rollout thereafter. We also see an opportunity to continue improving the digital and delivery experience for our guests to drive further growth through our digital channels. Popeyes digital sales mix is already over 25% today, with digital guests spending over two times more than non-digital guests. Popeyes is one of the fastest-growing freestanding drive-thru concepts in North America, opening nearly 200 restaurants annually over the past 3 years. We're doing this with strong franchisees, only allowing top operators to grow in our system.
As we look ahead, we see no reason for this engine to slow, especially as franchisee profitability continues to improve towards our goal of $300,000 by 2025. I expect Popeyes U.S. and Canada to remain an important contributor to our overall net restaurant growth outlook and anticipate growing our restaurant count by roughly 800 net new units to reach over 4,200 restaurants in the U.S. and Canada by 2028. I'll wrap up this section on our businesses with Firehouse Subs. This has already been a great acquisition. In the two years post-acquisition, we've increased average unit volumes from approximately $900,000 to about $1 million. We've also set up the system for accelerated development by finalizing our area rep agreement buyouts and introducing compelling and sought-after development incentive programs.
We've increased our digital sales mix from around 20% to nearly 40% and rising through the launch of our new app last summer. One of the reasons we're most excited about the Firehouse Subs was the differentiated quality of its hot subs. Firehouse Subs continues to rank number one in food quality and number one in food taste and flavor. We've seen Firehouse Subs improve in terms of guest satisfaction, both in-store and digital, giving it one of the highest operating satisfaction scores across the entire industry. We are committed to maintaining this quality while also working to improve speed of service. Today, about 2 minutes and 45 seconds of guest wait time at Firehouse Subs is due to our steamers, and 90 seconds is related to the time it takes to toast the bread.
We know this is too long and have been testing new equipment that can significantly reduce wait times while enhancing food quality. In partnership with our vendors, we developed a great new steamer that cuts steaming time down to 45 seconds while actually improving quality. We also identified a toaster that can cut toasting time in half, which we are now testing across our Jacksonville restaurants. I was just in Jacksonville with Mike and team last week seeing the new equipment in our company restaurants. While it's still early days, I'm really encouraged to see the benefits they deliver, including reducing average prep times by about 40%, improving the overall guest and team member experience, and significantly increasing our potential throughput.
We also know that digital ordering can help improve service times, which is why that's an important item that we're focused on to make sure we're delivering a great digital guest experience to help drive more ordering through our digital channels. The team recently overhauled the existing Firehouse app with a focus on the user interface and experience. Following the app relaunch, we saw user ratings on the app stores improve by over 100% to 4.8 stars out of 5. These improvements matter, and they show up in sales. Firehouse already has the highest home market digital sales mix out of all of our brands, reaching nearly 40% in 2023. Part of this is because of the difference in restaurant formats for Firehouse compared to our other home market brands, which have more significant drive-thru businesses. But having a seamless user experience has also helped to drive these incredible results.
Another big priority for us is accelerating restaurant development. We've seen strong uptake in our recently launched development incentive programs and see a clear path to accelerate net unit growth at Firehouse, with aspirations to ramp up to 300 annual openings within the next five years, with a path to deliver at least 800 net new units by 2028. Although Firehouse is a smaller contributor to our global earnings today, it is clearly an important driver of our long-term unit growth and represents an exciting opportunity for us to really demonstrate our global development engine and digital strength. Now, before I wrap it up and hand it over to Patrick, I'll walk quickly through our updated capital allocation philosophy.
We generate a lot of free cash flow, about $6.4 billion cumulatively over the past five years, which we can put to work to help accelerate these plans while at the same time continuing to delever and return capital to our shareholders. Our first priority will always be investing in high-return opportunities for our business. Since 2020, for Tim Hortons Canada alone, these have included our $80 million support behind the advertising fund in 2021, $115 million investment in distribution centers to further improve service levels for our franchisees, and over $100 million towards new builds and renovations. As you know, we're in the middle of our $400 million Burger King U.S. Reclaim the Flame plan, and we have two acquisitions and related investments for $2.5 billion in the last two years with Firehouse Subs and Carrols, each for different strategic reasons.
To support each of these opportunities, we've been investing in our people, especially our field teams, development, franchising, and marketing. I hope you can all tell that we love nothing more than reinvesting into our business where we think there are attractive long-term growth opportunities. We told you earlier this week that for 2024, we expect to invest about $300 million in capital expenditures, tenant inducements, and other working capital investments, including BK U.S. remodels as part of our Reclaim the Flame plan. I'm sure you're wondering if this is a good run rate to expect going forward. I do think over the medium term, this is a decent run rate to hold us to, excluding our pending acquisition of Carrols, and we plan to give you more precise annual expectations on our year-end earnings calls each year.
We not only think these investments are strategically important, we believe in the direct return on investment they'll provide for our shareholders. Even with these investments, including our pending acquisition of Carrols, we remain on track to achieve our stated mid-4x net leverage target by the end of 2024. Over the long term, we plan to manage net leverage between 3x-5x, allowing us to maintain a strong balance sheet while unlocking flexibility to commit to consistent dividend growth and allocate excess financial capacity towards share repurchases when attractive. When we look at shareholder returns, we've heard feedback that it would be helpful to have guidance on the dividend.
To that end, we plan to adjust the pace of growth in our dividend every year until we reach a payout ratio of between 50%-60%, at which point we'll look to grow the dividend more in line with earnings over time. While we don't have a formal share repurchase policy in place, we plan to leverage our existing authorization when we see attractive opportunities to do so, such as our September and October 2023 repurchase activity. Between Matt and his team's thoughtful capital allocation approach and the compelling long-term plans of each of our five business segments, we are very confident in the outlook for the next five years. We know that not everything we're planning to do will work exactly the way we want. We also know that there could be unexpected external factors that impact our plans.
But the advantage of our global business is that we have multiple paths to deliver the growth we've laid out for you today, which is why we feel so confident in sharing it. If we can deliver at least this guidance and allocate our capital towards high-return opportunities, we believe we can provide a baseline double-digit total shareholder return with upside potential. That upside potential will come from better-than-expected execution, stronger returns on our investments, and thoughtful management of our balance sheet. Thank you very much for your time and attention today. I'll pass it over to Patrick now, and then we'll both take your questions. Thank you.
Well done. Thanks, Josh. I am going to also have some prepared remarks. Josh and I have figured out over time that our respective roles are he kind of does play by play, and I do color commentary. But I am going to have some specific numbers in here, and I know I make Kendall really nervous. So I will work from a script for a little while. Actually, so nervous she brought Jill, our general counsel, who's over there with a taser, just in case I get too out of line and I'm talking about things that don't just involve adjectives a lot. So I'm going to take just a few minutes here to share the headlines that I see out of all of this. First is the strengthening base of our franchisees and their unit economics.
You all know this was an early priority when I joined the company a little more than a year ago. I have always believed that in a franchise business model, the cash-on-cash returns of the franchisees is the single most important indicator of future success for the brands. The success of our franchisees relies on an important partnership. As the franchisor, we need to protect and strengthen the brand. We need to deliver quality products and innovation. We need to set the operating standards and help our franchisees achieve them. In turn, our franchisees need to invest in their restaurants to keep them modern. Our franchisees need to establish a service culture, train their teams, and deliver our quality products exactly as they were intended millions of times consistently every day.
If we both do our jobs, then our franchisees will see growing profitability, which allows them to reinvest in their restaurants and open new restaurants. You saw us announce two days ago a pretty remarkable achievement on that front: a nearly 50% year-over-year increase in profitability for Burger King in the U.S., nearly 40% for Firehouse Subs, nearly 30% for Tim Hortons restaurant owners in Canada, and a 17% increase for Popeyes in the U.S. We believe that our Tim Hortons, Burger King, and Popeyes restaurants, on average, in their home markets, should be generating at least $300,000 in EBITDA in their home currency. So we're not there yet. We're making progress, but we're not there yet. At Firehouse, that number should be $150,000 plus. And then, once they're above those thresholds, it needs to be consistently growing from there.
In each case, this would represent the kind of returns that we think we're capable of and indicate a very healthy business for our franchisees. So lots more to do, and as Tom always says, progress, not success. The second headline I take away from all of this is that fundamental restaurant-level execution and digital transformation will be core to our success. You've heard a lot from Josh about the execution in our restaurants, so I'm going to focus a little bit more on the digital transformation piece. Across all our segments, and international is the most advanced here, we see the transformation to kiosks, digitally ordering ahead, and increasing the usage of our apps, all leading to stronger check and better traffic, and an overall better experience for our guests and the restaurant team members. It really is a win-win.
You have all heard this before from restaurant companies, right? Everybody has talked about this. It is also true here. Digital transformation is very positive for the business. Our kiosk learnings internationally have been terrific. And I love how some of our partners - and I'm going to highlight Olivier Bertrand in France - is even testing moving beyond kiosks to QR codes for dining. So what happens when you walk into a Burger King restaurant in France? Our guests come in, they order on the kiosk when they come in. They take a little table tent, put it down on wherever they're going to sit when their meal is ready. They receive it by table service. So somebody walks out. So instead of sitting at the front, standing at the front waiting, they bring their order out to them at the table.
Then, really cool idea, while they're there, as they get to the end of their meal, there is a QR code on the table. They scan the QR code, and they order their hot coffee and their cold sundae. Nobody wants to order their coffee and their sundae at the beginning of the meal because by the time they have them, they're cold or melting, right? So not only does the guest get a hot coffee and a cold sundae when they want it at the end of their meal, but the average check when they scan that QR code in the restaurants in France, EUR 4.40. So it's delivering a really nice overall check uplift for the average guest and a better experience for that customer getting a hot coffee and a cold sundae.
In Canada, we've seen the power of our app, driving frequency and check and, in turn, great savings and speed for our guests who only have to scan their phone once when they're paying and they get their points for our loyalty program. I think we can go much faster in digital. And as Josh was just talking about, Josh and I have challenged Mike to make Firehouse the first 100% digital QSR in America. I think it's very doable. 96% of our Firehouse restaurants are in-line location. So it simply means all we've got to do is rip out the front-counter order point and replace it with kiosks because our guests are either walking in or they're ordering online ahead of time anyway, right? So it's very possible. I think we can get Firehouse to be 100% fully digital in the U.S. and Canada by the end of 2025.
Mike thinks 2026. He's nervous that I'm saying this. We'll see who's right, but the point is, I think it absolutely can be done. Regardless, you're going to see us speed up our digital journey because it's good for everyone involved. To really move the needle at Tim's, at Burger King, and Popeyes, we need to unlock digital in the drive-through. We're working on solutions to automate the drive-through and are doing various tests, both with voice AI and taking an intriguing and simple approach that doesn't use voice AI that I'm not going to talk about today, but it's really cool and we want to get it done before anybody else realizes what we're doing. But we're going to figure this out. Stay tuned for more. We are going to figure it out. We have to figure out how you make drive-throughs digital.
The third headline I take away from everything we've heard today is that we have a pretty remarkable sum of the parts as you put all this together. As Josh said, things happen in this industry, right? Economic headwinds happen, structural risks happen, politics happen, wars happen, and it all affects the cost of goods and labor and consumer spending power. It's our job to manage those headwinds, those external risks for our franchisees and for our investors. So when Josh lays out the long-term guidance that we shared today, I really believe that it is the lowest average annual performance you will see over time with some real upside potential.
As you assess for yourselves how much upside there is, I'll submit to you that even if new headwinds arise, even if one or two of our business segments don't deliver to our expectation in any given year, it's okay because we've got the geographic breadth and the operational and marketing depth that when you add up the sum of the parts, I think you're going to find a very compelling set of reasons to believe in both our guidance and the upside potential that exists here. Josh just delivered a much more thorough view of the business than when we were here with you a year ago, when we were both new in our roles and here on the stage with you, and far more detailed than my own thesis when I decided to invest in RBI for the long term.
I also want to reinforce something that I think gets lost quarter to quarter. About 70% of our worldwide profitability today comes from Tim's Canada and the international business, which is why we just broke it out. As we deliver on the growth projections that we have shared with you, these two business segments will still probably be about 70% of our profitability in five years, just with some different weighting given our plans for the international growth. I say this to remind everyone that Burger King, Popeyes, and Firehouse in the U.S. are really important. They are very, very important. We are never going to lose focus on those. I also want to remind you that they are the smallest part of the contribution to our earnings per share.
So while you're going to see us take our investment in those businesses very seriously and clearly, at Burger King in particular, I would also encourage you to give fair attention to the two business segments that are driving the large majority of our growth. Before I wrap up, while Josh and I are describing the really compelling opportunities we see for growth in the future, I'd also like to acknowledge that while you've seen some great progress in our brands in the last year, the team has, frankly, been generating pretty good results over many years with each of the three brands added to the Burger King core. This is not a new thing. In 2013, the year prior to RBI acquiring Tim Hortons, Tim's had global Adjusted EBITDA of approximately CAD 830 million. 10 years later, that's grown over 75% to CAD 1.5 billion.
It's a pretty darn good track record. Popeyes' global EBITDA in 2016 was roughly $90 million, and in 2023, that's grown to $280 million. And in the two years we've owned Firehouse, we've taken it from $45 million to nearly $60 million with a lot more upside. These have been very successful acquisitions and are the foundations on which we're going to generate growth and terrific investor returns over the short, medium, and long term. I'm going to finish today with reflection on why all that we laid out today is possible. My confidence starts with the incredible progress that we've made on each of these businesses over the past year. I doubt anyone thought we could improve the core home market brands as fast as we did in 2023. The move on unit economics in each of the brands was incredibly compelling and sets up our future success.
The greatest and most successful restaurant concepts in our industry have been doing the basics well for decades and have created billions of dollars of value as a result. When you think of our four amazing brands and our five business segments, there are some things that are consistent. We have incredible food. Truly, I believe we have the best food in each of their respective categories. We have proven expertise in growing our brands globally with our best-in-class network. We have exceptional teams. We've set up our businesses to be independent, to have the freedom to make decisions, and to be accountable for their results. The whole point of moving to Adjusted Operating Income is to give them full accountability for their P&L, including their capital and compensation decisions. The global entity of RBI is here to provide global scale, support, leverage best practices, and allocate capital efficiently.
But you may have noticed we did not present the RBI plan today. We presented a summary of five businesses that ladder up to pretty exciting consolidated performance. I believe the sum of our parts, the sum of our five businesses and their five plans is what makes us strong and will be what drives us to deliver an even better RBI over the long term, better for our guests, better for our franchisees, and better for our investors. I know this team very well now, and I know they're up to the hard work necessary to execute the basics of this industry with repeatable precision and focus. And when we do, we're going to generate exciting results for our franchisees and for our investors, and I'm excited to come along with you on this journey.
So with that, I'm going to invite Josh back up, and we'll take questions and give you answers that will hopefully not only be illuminating but make Kendall and Jill very nervous.
Awesome. Thank you, Patrick.
Dennis Geiger, UBS. Thanks, Patrick and Josh, for this, for all the detail on the guidance and, more importantly, maybe all the business updates that you provided. Maybe I'm getting a little greedier here, but thinking about the bridge between the system sales growth and the operating profit growth, can you provide, at a high level, any more color there? Again, you've given plenty. Maybe you want to keep some flexibility there, but as we think about G&A, those Tim Hortons supply chain margins, other factors, is there anything, at a high level, that you can add there? Thank you.
Yeah. I think our point there is that there are some puts and takes kind of between system-wide sales and AOI. And I think we just want to be clear that we'll make sure that we manage each of those line items and all the kind of pluses and minuses such that we deliver at least the same level of system-wide sales growth or at least the same level of adjusted operating income as we do system-wide sales. I think there's potential upside to that over time, but we wanted to be clear that there's no big changes in our spending levels. We feel good about our spending levels overall, and we think that comfort allows us to be confident that wherever system-wide sales are, we'll be able to translate that efficiently.
Dennis, what I'd add is that the G&A that you've seen us call out for this year we think is sufficient to drive the results that we're talking about. You'll see some inflationary growth. You'll see a little bit of growth in that over time, but the additions that we have made this year are, as I believe strongly, enough to generate these results over the course of the next five years. If we find things that we think will accelerate that even more and generate a good return for our investors, then we'll look at doing it. But the resources that we're adding this year we think are plenty to generate the kind of growth that we're talking about today for our long-term algorithm.
Yeah. I think we've gotten a lot of questions over time of, like, "Are you spending enough on the basics?" And we do feel good that we are at this point. We made some big investments over the last couple of years, and we feel pretty good about the overall spending levels. I think what I would read from that guidance is we don't think there are big investments that need to be made just to run the business as it is. And I think, as Patrick pointed out, if you see us adding spend, it's because we're going after something. It's something like Firehouse development ramping up where we think we need to invest behind some more development resources. We're going to get a bunch of operating income growth out of that as well.
That's what the guidance is kind of telling you with the relation we expect the relationship to work where if we're making investments, we expect to get return out of those.
Brian Mullen, Piper Sandler. Thanks for all the detail today. Just a question on Burger King in the U.S. For the units that you consider to be Modern Image today, I think it's 45% or something close to that, maybe getting around 50%. But of those restaurants that you consider to be Modern Image, can you speak to any variability that exists among that portfolio? Have they been remodeled over the last three years? Is it five years, seven years? Just how long has it been? Do those all truly look like what you'd expect a newer remodel today to look like?
Yeah. So all of the ones that we consider Modern Image, they're generally our Garden Grill designs. So they're what we've been building over the last, call it, five years or so. And we think those look pretty sharp. We think that's a good, nice, Modern Image. And so we're happy with those. We think that those will generally perform well; they do perform better than the older image stores, for sure. I would tell you that we are going somewhere a little bit different, though, with the Sizzle, right? That Sizzle will look pretty meaningfully different from the Garden Grill. I think it is incredible. We only have a couple handfuls of those in the U.S. I've been to at least a few of them. Tom's been to, I think, all of them. I've worked in one, and it is awesome.
It's both aesthetically beautiful, but it's also redesigned to accommodate a lot of the way that our guests are ordering today, specifically around digital ordering in a much more intentional way. So I think that's going to be a big benefit, and I'm excited to see what that image does. I think it's going to be great for our guests. I think it's going to be awesome for team member attraction and retention. It's a nicer work environment, and that's a big deal for the efficiency and effectiveness of our business. And I think guests are going to love it, and it's going to enable us to make this digital transformation faster because it has things like a guest flow that's set up intentionally to have kiosks. So you have a really logical way to enter the restaurant, order at the kiosk, and then wait for your order.
In many of these restaurants, we're also doing some of the things that Patrick started to allude to with some digital approaches to the drive-through. I think that's an aspect that you'll likely see as we develop more of these Sizzle restaurants. Long way of saying I think we're in a good place with all the garden grills that we've built. I'm incredibly excited about where we're going with the Sizzles. The great thing about the Carrols acquisition is it gives us another lever to bring that image to scale over the next few years.
Thank you. It's John Ivankoe at JPMorgan. So I heard in your prepared remarks that 70%, correct me, of Burger King international units are considered to be Modern Image. Did I catch that?
Yeah. I think I said 75, I think, is the.
Okay. Thank you. 75. So that's not 90, which so kind of talk about the state of the Burger King International business. I mean, is it where you want to be? You do have some legacy markets, some in Latin America, South America, obviously U.K., Australia, perhaps Spain. So you have some markets that have some years on them. So is there an opportunity to kind of accelerate modernization of these units, and might the corporation get involved to accelerate that?
Great question, John. I think a couple different thoughts on this. One, in general, the store portfolio is much newer than the U.S.-based, right? Look at the U.S., a lot of the stores that we're remodeling, they might have been built in the '60s or '70s, whereas a lot of the international stores, just given the growth profile of that business over the last 10 years, a lot of the starting infrastructure is a lot more modern. So I think the reality of the infrastructure and the assets is different. And then there's a lot of differences market by market. If you go to France, we built pretty much all of those in the last 10 years, many of them in the last five years, so probably less to do there. There's some other markets where we do have some greater remodeling needs.
Some of those are places, like you said, like the U.K., maybe Germany, Brazil, where we do think there's some remodeling that needs to be done, and it can provide a big uplift to the business. So David and the team are working with the master franchisees in each of those markets to help them come up with plans. In many cases, we're already remodeling in those markets, but I do think there will be even more to do there. I'd say our extent of involvement there will likely be meaningfully less than what it is in the U.S. That's right. We have master franchisees who oversee those markets, and our economics are less in those markets, so there's not as much involvement from us.
The one other thing I think just to consider as you think about those international locations is there are fewer freestanding drive-throughs, whereas in the U.S. business, we're like 95%+ drive-throughs. Those are big assets and often assets that were built decades ago. In our international business, you have many more inline and mall locations, so the scope of those remodels is oftentimes a bit different.
And secondly, follow-up if I may, again, from a capital perspective. Popeyes in the U.S., if you did want to accelerate, get the entire brand on one cooking platform, which would obviously be very convenient and perhaps even necessary for your supply chain, would the company get involved from a capital perspective? I mean, I've heard some different numbers in terms of what that may cost per kitchen. I don't want to say it, so perhaps you can, whether that might be a potential value-added part of your capital plan in 2025 and 2026, maybe just to put some potential hypothetical numbers around that. Thank you.
Yeah. So just to put a few numbers around it, we're still working on finalizing what that Easy-to-Run Kitchen looks like, but the cost is very different from, for example, a BKUS remodel. I've heard numbers in the kind of $150,000 range, depending a little bit on the nature of the kitchen. And so we're working on refining that, making sure we have the exact right model for it, and then we'll figure out with the franchisees what the right approach is there to that. We're going to follow the same principles that we always do. We've got to get to a place where the return on investment makes sense for our franchisees. I think that's going to be the guiding principle there.
I think the good news is that in what we're seeing initially in some of our easy-to-run pilot restaurants, we're seeing some pretty impressive improvements in the business, both from a guest perspective but also the operational efficiency, especially around labor, that I think is going to make that return pretty compelling for our franchisees on its own.
It's early, but that return on investment for the franchisees looks very compelling, very compelling.
Hi. Danilo Gargiulo at Bernstein. I'll be greedy. I'll be asking two questions, if you don't mind.
Of course.
So the first one, we are seeing brands like Popeyes as well as Tim Hortons go more into attack mode with regards to food categories, new food categories. Think about the wings at Popeyes, the PM food category exploding also for Tim Hortons. So thinking beyond the mid-term but looking more into the long-term, what is the brand equity that you would like to build at Firehouse Subs and at Burger King? So that is the first question. The second one is, and maybe this is more for you, Patrick, I heard more digital innovation that is coming from operational excellence, right? So you're talking about the digital unlock through operational improvements through your system. What I didn't quite hear is the opportunity that you have in your data platform, and you built a very successful one in your former company.
So what's the long-term plan to be building and leveraging this data platform across your customers along 100+ countries, and what would the cost be for a company like Restaurant Brands International if you can draw parallelism with Domino's? Thank you.
Yep. Thank you very much. So I would say on the innovation side, I think we have to be thoughtful and balancing, understanding what the core equity is of each of the brands in terms of thinking how far afield we can go with our innovation priorities. And I think a couple of the examples that you called out illustrate that pretty well. If you think about what's so special about Popeyes, it's our amazing fried chicken and our Louisiana flavors that really differentiate us. And what I love about what the team has done with the wings is it leverages exactly that. It's straight down the fairway. It's bone-in chicken. It's made very much the same way we make the rest of our bone-in chicken and leverages some amazing flavors that are very much Louisiana spices.
And we make that special with all the sauces and the naming conventions that we do. So for me, that's an innovation that's right down the fairway of the brand and allows us to leverage what people love from us but go into a category, which is a little bit where the consumer's going. I think the same is true of Tim's with a lot of the innovation that we're doing in cold beverages. And people love Tim's for our beverage quality. We've had a pretty decent-sized portfolio of beverages, especially coffee-based beverages, over time, and we've just shifted that into cold. And you've seen a lot of the U.S. competitors do that, but we're leveraging the incredible quality product we have, the credibility that we have in coffee, and then moving our product portfolio into the place that I think the consumer, especially the younger consumers, are going.
So I think that's another good example, kind of go where the puck's going a little bit in hockey parlance, but doing it in a way that respects what the brand is known for. And I think you'll see the same thing with Burger King and Firehouse. At Burger King, we talk about this a lot. It's all about the Whopper and Flame Grilling and Have It Your Way as well. And what we're doing now with Million Dollar Whopper is probably one of the greatest innovation exercises you could imagine, sort of a crowdsourced version, but it's doing the same thing. We're leveraging the Whopper brand. We're leveraging Flame Grilling, and we're letting all of our guests have it their way and invent their own Whopper. So I think you'll see things like that. On Firehouse, we have incredible product quality.
People love the quality of the ingredients that go into our subs, and they love the flavor profile that comes out of our steamers. And so I think you'll see us having those things front of mind as you think about what we're going to do with what we'll do with the innovation pipeline at Firehouse. It's probably going to be more focused for now on hot subs, things we can do in our steamers, and always the highest quality ingredients.
Got the fire right in the name, so going with hot makes a whole lot of sense. So on the digital side, it's a great question, and I'll start by I'll talk specifically about Popeyes and why digital is so important there. The only two scale players in the industry in the U.S. that have AUVs that are $5 million-plus happen to be in the chicken category, right? So Chick-fil-A and Raising Cane's. So those are the only people that are doing $5 million-plus AUVs. And the difference between those two concepts today and where Popeyes is today is their boxes are just far more efficient. They're easier to run than our boxes are today. We've got taste and food quality nailed. That's how we win. We have to figure out how to do that efficiently.
We've got to figure out how do you get more throughput, how do you make it easier on the teams to do that at much higher volumes. I mean, we're fundamentally coasting in right now to kind of $2 million AUVs. We've got a long way to go, and it is very difficult today to run a $5 million Popeyes. There are people doing it, but they've got very experienced teams in those restaurants to be able to do it. We've got to be able to do that more consistently, make it easier for people to have repeatable precision in those restaurants, do it efficiently to do much higher volume. And digital can play a very, very important role in doing that.
So it's not only about kitchen equipment, but it is also about the ways in which you can make the ordering process easier and more precise and more accurate on getting the orders right, and that generates the data that you were referencing. And so from my old life, when you looked at the growth that was generated at Domino's, it was getting the food right, and then for a while, it was getting people moved on to these digital ordering platforms. And the ease of accessing the brand probably drove results for two or three years, but then really what drove results for a very long time was what we were able to do with the data. And we're highly aware of that. By the way, and I had nothing to do with it.
She was already here when I got here, but the woman who ran those efforts at Domino's now runs those efforts at Burger King. I'd like to repeat, I had nothing to do with that. But Julia is awesome at this. She knows exactly what we did at Domino's. She's now doing it at Burger King, and we've got awesome teams at the other brands as well. And so it is a very, very important part of this, but you've got to have the quantity of data to really make that work. And so it's why we challenged Mike. It's like, "Hey, let's make Firehouse 100% digital. We can do that. We don't have drive-throughs. We've got to figure out the solution for drive-throughs. We don't have them there.
Let's just cut over and make this a digital business that will not only make it easier in the restaurants, it means we'll have all of the data in those restaurants, and then we can use that to reward loyal customers, etc., etc. So all of the things that come out of that, you can do some things with it, and you can look at what affects customers and repeat and frequency and retention and all of those things and test pricing, but it drives a much higher return once the majority of your data is coming in that way. And so there are places in international where we are already majority or very close to 100% digital. You're seeing the use of that a lot there in the home markets.
We've got to accelerate the adoption of digital to have the kind of database that's going to generate a great return on using it, but trust me, I don't forget about that at all. And it's there and ahead of us, gives me confidence in our ability to hit our long-term, but we've got to continue to convert people across to ordering digitally.
The only thing if I can just add, I think there's a couple of elements where this data is relevant. There's one side on the consumer data, where you can use consumer data, for example, to have personalized orders. I think just as important and perhaps more so in the Popeyes case is some of the operational data that we're getting, especially as we digitize some of these kitchens and move to the easy-to-run kitchens. We're using data to do things like create these digital drop charts that help the batter fry cook know what to produce and when. That's incredibly relevant to the efficiency of those kitchens.
But there's also things like we're moving to some bump bars that tell us kind of when orders are going through different stages, and that's helping us a lot to figure out where do we have kitchens that are working better, where are they not working better, how do we communicate with an app and allow you to do things like track when your chicken's ready. That might sound a little bit familiar from Patrick's past. But some of that stuff is a bit more operational but is perhaps even more impactful in the Popeyes context. We're doing the consumer side as well.
We won't know why the chicken crossed the road, but we'll know when it crossed the road.
That it crossed the road. Chicken Tracker.
Yeah. Hey, John Tower at Citi, just a couple of questions from me. Patrick, you'd mentioned earlier home markets hitting $300,000 in EBITDA for the franchisees as being a pretty critical level. I'm just curious, particularly at the BKUS business, do you feel like that's the trigger or based on your conversations with franchisees, the trigger to get them more interested in growing new stores in the U.S.? Is that general take? And then on top of that, flipping to the international markets, it seems like we haven't really gotten a great picture as to the health of the franchise base, and there's some markets across the globe where there's China or now it seems like there's a few others that are popping into recessionary territory.
I was hoping maybe you could frame the health of the franchise base, maybe even in relation to the leverage levels in comparison to Restaurant Brands itself and how those franchisees look to the future for growth?
I'll do the first. I'll let Josh take the second. So the magic on the 300, at just the most simple level, restaurants have been trading hands in the restaurant industry for freestanding units for a very long time, for, call it, 6x cash flow. And it varies by brand. Their brands, Popeyes, tend to trade a little bit higher than that. Taco Bells have traded higher. McDonald's have traded higher. But if you look at the range of where kind of freestanding restaurants trade hands between franchisees, 6x is a pretty good rule of thumb. You might be willing to do more than that for a new restaurant because it's brand new. You're not going to have kind of maintenance, reimage costs coming at you earlier. So maybe you'd go a little bit higher than that.
But if you look at what it costs to build a Popeyes or a Burger King, for instance, at $300, you're now kind of into that range of 6x. And franchisees are very rational, right? The answer is if they can buy an existing restaurant at a lower multiple, then they will generate by building a new one, and there are restaurants available, they're going to buy first. And the day that you can stand up and say, "Look, you're going to probably generate a better return by building a new one than buying an existing," I think that's the point at which capital starts flowing significantly to building new restaurants. And what we don't want to be in the business of doing is selling restaurants. We want to be creating demand for restaurants, right?
We want the economic proposition to be so good for franchisees, existing and prospective to join the brands, that they're excited about that opportunity, and you're creating more demand for restaurants than there is kind of supply to fulfill. That's generating value for them, and it's generating growth for us. That is also just the level at which when you look at reinvestments and all the rest of it, it just all starts to really click and make sense, and it gives you a little bit of margin of error, right? There can be a bump in the road. I mean, there was no room for a bump in the road at Burger King a year ago, right? When you were doing 140, first of all, there's a dispersion of results, right? So it wasn't like all restaurants were doing 140.
You get up to that 300 number, and people are confident that it's going to keep growing from there, you're going to create a lot of demand for restaurants. So people's confidence about where that's going to go will also play into how excited they are about building new restaurants. We've been building a lot of new restaurants at Popeyes for a while because people see it. They look at the business. They look at the brand. They look at the quality of the food, and they say, "Yeah, I'm willing to get in early on this." But we get that to 300, and they're still really feeling great about the potential for that, they're going to get very excited about building more and more restaurants. So Firehouse is a little bit different. Firehouse, you've got build costs of, call it, $450.
We've got an incentive out there for existing franchisees as well as now for first responders and veterans that will kick $100,000 into that build. We did 110 last year. If your net cost is $350,000, that's great. But you do need a higher return on an inline unit than you do on a freestanding just because of the absolute dollars involved. You're going to have a little bit more above-restaurant-level G&A to manage them because there are just more units to get the same amount of cash flow, etc. You get to 150, and it gets really exciting on the Firehouse side. But the 300 number, I think, is pretty magical as, "Okay, that's a threshold, and then as long as you're growing from there, I think you're going to generate a ton of franchisee interest.
Great. Well, similar thoughts, different region of the world. I'll try to take on the international side of things, which is slightly more complicated because we have about 175 brand and market combinations. As I mentioned on the call Tuesday, we're thinking through how to better express that in a way that everybody can understand, but a few different thoughts on it. I think we're already growing and have been growing pretty consistently in a lot of these international markets across a broad array of businesses. As Patrick mentioned, franchisees are pretty rational. They're building those units because the returns are good, because they're happy with the returns. They're happy with where the returns are going. I think that's what sustained the growth there.
You can break it down into a few different pieces, especially as you think forward in terms of where the restaurant growth is going to come. I mentioned a little bit ago that we expect about 7,000 net new restaurants in international over the next five years. That's kind of how you get to our overall growth level. I'd kind of break that down into a few different pieces just so you can frame it. First and probably most importantly is maybe 3,000 of that is likely to come from our EMEA business. We're already growing at almost that kind of a pace, so it's not far off of what we're already doing. I think our franchisees are seeing quite good returns in a lot of the biggest growth markets. Those are places like Spain, France, Italy. Those are pretty solid established markets with good unit economics.
So I think that piece of it, it's the biggest, especially in terms of Adjusted Operating Income because the AUVs of those units are the highest. The next piece is Asia-Pacific. I think if you were breaking down that 7,000, you'd expect to get about 3,000 of those from our Asia-Pacific markets. There are quite a number of markets out there. Places like India is a big contributor for us across all of our brands. That's why I mentioned it a little bit ago. So we expect to get a contribution from a lot of those markets where we're pretty happy with unit economics. And I expect a little bit less than half of that 3,000 would come from China.
That's kind of roughly what we're counting on, where we have some pieces of the business which already have good economics like the BK business and some pieces where we still have more work to do like our Tim's business. So that covers Asia-Pacific. The last piece of that puzzle is our Latin America business, and I'd expect about 1,000 of the restaurants would come from Latin America. Again, that's pretty similar to what we're already doing. We've been doing just around 200 restaurants a year there across a lot of markets. Overall, we're in pretty good shape in Latin America too. So that gives you a sense of sort of where the growth is likely to come from and where we've got really established unit economics and some places where we have more work to do.
In terms of your question on leverage levels, I do think by and large our master franchisees are in a good place, are well capitalized. If you look across all of our big ones that are out there, there are a few of them that are a little bit high on the leverage, and we're always working with them to work through that. I do think by and large we're in a pretty good place from capital structure perspectives.
The only thing I'd add to all of that is the teams are all sitting on plans for higher numbers than that.
Sorry.
Yeah, sorry. Those numbers are not what we're actually not what our teams are chasing after. I would say that's sort of a risk-weighted view of the world. Yeah, and we're taking into account the fact that things happen, right? I mean, we lost 1,000 restaurants in Russia, right, overnight. None of us had that built into any of our projections, right? We had fundamentally a billion-dollar system sales business with roughly 1,000 restaurants in Russia that went away, I mean, one day to the next. And things happen in international. We're operating in a lot of markets. Things happen. You wake up. The only thing that you can expect is that there will be unexpected things. So if everything goes great and there is no instability anywhere in the world, hopefully, we would beat those numbers.
But what we're laying out is something that we feel very good about and that there's upside to, but we're also building in kind of as you aggregate it at the RBI level, we look at it and say, "Yeah, okay, all of those make a lot of sense in and of themselves. Something will go wrong." And we need to have built plans that allow for the fact that something will go wrong.
Hey, Zach Fadem, Wells Fargo. So two quick ones from me. How do you think about hurdle rates and cash-on-cash returns for the BK remodels internally? And then since you just acquired Carrols, to what extent would this preclude you from doing another deal?
Yeah, in terms of hurdle rates, the way I'd think about it for what returns do our franchisees need to make, I would think conceptually around what's their cost of capital, and you need to earn some margin on top of that to compensate for the risk. I think that's conceptually how I would think about kind of return holes and what we're looking at there. As we talked about before, we underwrote those remodels originally to a construct like that where we wanted to make sure that our franchisees would get a healthy return on their capital that was above their cost of capital.
That's why I think the news is so great that the remodels are coming better than we expected, which means the expected returns for everybody, for both our franchisees and for us and for the capital we're putting in, we have a lot of confidence that we're going to get to a better place than we underwrote, which is a positive outcome for everybody. With respect to another deal, do you mean us doing another deal?
Yeah.
Yeah, so I think on this one, I may have to ask for audience participation. Can I ask everybody in the room, anybody who thinks that we should go out and buy another large brand today, can you raise your hand? All right, one half hand right up until they realize that nobody else is going to put their hand up. And we fully agree. I said at the beginning, we're in the four largest, most important quick-service restaurant segments anywhere in the world. We have incredible brands that have so much opportunity in front of us. And I think what's clear to all of us is that the best thing we can do with our time and our resources is invest behind and make those brands as successful as they can possibly be. And I think that's where you'll find us focused.
By the way, we've got well over half of our ownership is in this room, and none of them raised their hands either. So we've got lots of work to do with what we have today and lots of great high-return investments that we can make in those businesses that are going to generate great returns for our investors. We can prove this with four brands that this is a great idea. We don't need to add a fifth to make that happen. And maybe someday we're going to be in here. That's the answer today. Maybe someday we're going to be sitting in here, and everybody would get very excited about us potentially looking at a fifth brand. But given that that was zero for the entire room, and we happen to agree with that, there's just no reason to be looking at that right now.
What about smaller C&G-level BK operators?
Oh.
Oh.
I think you've seen us get involved in a couple of those situations. You saw probably at the end of the year, we added 100-some-odd restaurants. I think of that as some of that is normal course. That's us as the master franchisee of the market, the kind of operator of the market. We'll step in on a temporary basis where we need to in some of those. So we may do a little bit more of that here and there, but not too much. I think we've got our hands pretty full between the 120 we bought and the 1,000 that we just committed to buy. So I think Tom and his team are going to be busy with that.
We're going to be pretty focused on refranchising, not bringing them in.
Yeah.
Yep.
My pleasure.
Two questions. This is Lauren Silverman from Deutsche Bank. On the system sales growth, 3% comp, 5% unit growth, 8% system sales, typically contribution from unit growth to system sales is lower given international AUVs. So can you just talk about the math there and how the unit growth translates to system sales?
Yeah, for sure. I think as you think about the composition of that 5% unit growth, I think it's important to note that we've probably relative to what we would have thought a year or so, there's less contribution from some of our China units in that assumption, and especially some lower contribution from things like Tims China, which would have had a lower average revenue and lower income contribution. So the mix that's embedded in that 5% is a higher ARS, higher profitability mix, which reduces any potential negative mix impact there. And that's the biggest factor in it.
I would say the other thing I would just have in my mind as I think about hitting that 8%+ system-wide sales growth is while in there is 3%+ same-store sales, I think if you look back at least our track record over the last year or two, we've been able to do much more than that. And we're making a lot of important investments. We're growing franchise profitability. We're improving operations. And I think that also, the ability to outperform on the same-store sales is one of the things that gives me confidence that in any given period, we should be able to deliver that 8%+.
Great. Thank you. Then just on the unit growth for Popeyes and Firehouse, I believe you guys guided to 800 net for each of the brands. Seems to imply Popeyes is relatively flat to what you guys did in 2023 and a meaningful step up for Firehouse. So can you just explain why not greater for Popeyes and your confidence in Firehouse?
Yeah. To your point, Popeyes has been doing that pace of growth. It's an incredible pace of growth. There aren't too many freestanding drive-through brands in the U.S. that are building almost 200 net new units a year. So I think that's an awesome pace of growth. And our balance there is just we know where we're going. We're going to get to a huge national brand. We're not in a rush to try and do it tomorrow. We want to do it really well. We want to pick good sites, build them well, open them well. And we're being selective about the operators who are opening those new units. We're only allowing A and B operators to do that. And all of those things kind of drive us to make sure we find the right balance of quality with speed. And that's why we've been around there for Popeyes.
I really think the bigger unlock, and Sami's correctly shifted this focus, is the operational quality of the existing units. That's why we've been so focused on operator performance, on the Easy-to-Run Kitchens, and trying to drive up the average unit volumes of those Popeyes. I think that's probably where the bigger kind of change in performance can come from over the next five years with Popeyes.
I do want to say I'm very appreciative of you asking that question, Lauren, because so you understand, we all sit or stand on an open floor with our desks. Where I am, Sami is basically right here, and I ask him that question about once a week. So it's really helpful that you got that on record because I'm sure he's listening. So now I can go back and ask him the same thing. But getting a couple hundred open on freestanding is a lot. As those unit economics continue to improve, that's hopefully going to create even more demand. And as we've said, all of these things, we think there's upside on them, and that's certainly one that will push on. And now you've given me the excuse to ask him again. So thank you.
Thank you for the question for Mike as well on Firehouse. Sorry, I almost forgot that one, but. We've factored in what we think is sort of a balanced forecast for Firehouse. We've already started to ramp up the pace of development there. The unit economics got a lot better, as Patrick pointed out. And if we get anywhere close to this $150,000 profitability goal, the Firehouse unit economics are going to be such a no-brainer. They will be incredible and I think one of the most attractive opportunities for anyone who wants to become a franchisee in the restaurant space. And I think that's what underpins our outlook for growth. We've also put a really compelling development incentive plan in place both for existing franchisees and new franchisees, including first responders. So we have visibility into some of the traction we're getting there.
We're seeing the pipelines evolve. I think I'm pretty excited to see the pace of growth ramp up this year. I mentioned earlier, we have an ambition to get to 300 openings over time. That's not baked into this forecast. We've assumed something meaningfully lower than that. I think it's kind of a balanced assumption that assumes some ramp-up that we're starting to see, but not all of the potential that we think is possible over time.
Hi, it's Andrew Charles from TD Cowen. Want to double-click on China?
Oh, I'm sorry.
Go ahead, Sara. I'm sorry. You owed my time.
It's Andrew Charles, and I'd like to introduce Sara.
Yeah, sorry.
Sorry. Okay, so I do have a question, a couple of questions. They're mostly about competition. The first was about sort of digital.
Sara?
Oh, yeah. Yeah, sorry. So I have the mic. I should use it. You talked about, Patrick, about how there's such an opportunity in digital, but I think you also rightly acknowledge that a lot of competitors are seeing the same opportunity. So is digital is there still an opportunity for digital to be a competitive advantage, or is it just sort of table stakes and catch-up, and that's part of how you get the operations to where you need to be? So that's sort of.
Yeah. So actually, it's a great question. It is certainly harder today to create competitive advantage with digital than it might have been a decade ago. But you don't have to create competitive advantage to create a really good return because part of what you're talking about is start from, "I have these people who are doing business with me today, and they are doing it through analog channels.
The ticket is lower, and I don't have their information, so the marketing spend to get them to return is higher than if I can do it digitally. So the return can just be from, "Look, this is the existing business that I have today, and I can make that a better, more profitable business, and frankly, have happier customers because it's a better customer experience by converting them from analog to digital." Then the question is, are there things that you can do that can create some competitive advantage? Look, everybody in the industry right now is trying to figure out drive-throughs. Nobody's nailed it yet. Whoever gets there first may briefly create some competitive advantage, but if somebody nails it, everybody else is going to follow pretty quickly.
I'd love to be able to create that brief advantage, but it's going to be hard to be the only one doing it, right? So I don't know that doing digital today necessarily is going to create as much competitive advantage versus different brands, but I do know it will create more profits, all of that, for the existing units, the existing customer base that you have, improve your return on getting them to come back, etc., etc. So the returns are there on having the people working on this. If you can figure out something new and different and drive-throughs is going to be the place, I mean, that's what people still have to crack. Yes, except unlike 10 or 15 years ago when some people were figuring out digital and other people weren't even looking at it, everybody's looking at it now.
If somebody figures something out, you're going to have a lot of fast followers. I'm not sure that it's as easy to kind of create a bunch of space.
But even without, returns are good.
Even without the returns are terrific. Yes.
And then it's just a second question also, I guess, on competition. You talked about international growth and look at some of the global peers and use that as a benchmark. But obviously, in the US, there are various different sizes, and I think market share in the hamburger category has been remarkably stable for a very long time. So can you maybe contrast what you see in international markets in terms of whether it's relative scale or brand awareness that gives you confidence that doesn't persist outside the US as well?
Yeah. So I mean, there's just more growth in the category outside of the U.S. on average than there is inside the U.S. I mean, that's the simple answer, right? I mean, the growth in the hamburger category specifically outside of the U.S. is just much faster than it is inside the U.S. It really is easy as that.
Yeah. The only other thing I would add on the categories, though, is not all of the categories have been so stable in terms of market share. I think some of those market share trends have really been disrupted in a lot of the bigger categories over the last 5-10 years, especially if you go outside of burger, if you look at things like sub sandwiches.
Chicken.
Chicken's a prime example of this. I think it's a very healthy dynamic. It's something where if one player really gets it right, if they bring a better experience, a better product, I think you can see pretty big shifts. Something like that happened in another category that this guy was involved in for a few years too. I think market share trends can really move, and I think it's usually a function of getting the basics right and doing things much better than your peers. That's why that's what we're focused on.
Yep. It's a really good point, right? I mean, if you look at 10, 15 years ago, the number one player in chicken in the U.S. is now the number three player in chicken in the U.S. The number one player in pizza is now the number two player in pizza. And the number one player in subs today is the same as it was 15 years ago, but they might be vulnerable, right?
That's one of your biggest competitors now is chicken and pizza.
Yep. It sure does.
Thank you.
Hey, guys. It's Andrew Charles from TD Cowen. Good to talk to you.
We've been anticipating your call.
There you go, right?
So it sounded like on Tuesday, the key to reclaiming 5% net restaurant growth is improving China. So, curious, what's the plan to do that just given the current industry backdrop in China, specific to Tim's coffee competition? And really, what I'm getting at is it sounds like there's contingencies within the plan to help you get back to 5% net restaurant growth. So I guess, could you speak to your confidence in 2025 reclaiming that 5% net restaurant growth given where China is? Yeah. So I would say, Andrew, I would frame it just with a slight nuance there. I would say what drove the reduction in our outlook for 2024 was the change in the China expectation. I think there are a number of things that can take us back over 5% in 2025, many of which you're already seeing happening.
China could be one of them, but there are actually a lot of other ways that we can get there as well. I talked about a few of them today. Ramping up Firehouse, I think that's going to be a multi-year thing. I expect that to be a further tailwind from 2024 to 2025. I also think Burger King U.S. is going to be a further opportunity. I expect we're going to make a lot of progress from 2023 to 2024 just based on all of the progress that Tom and his team have made on improving unit economics. But I expect we'll see further positive trajectory out of Burger King. And I think we're going to make more progress in other international markets where our new brands are ramping up.
So I think there are a lot of good things going on that can all be part of the kind of mid-four is going to something north of five. I think it'd be great for China to be a part of that. But I think we can kind of get there without that being the only element of it too.
Yeah.
Hey, guys. Brian Harbour from Morgan Stanley. I had a question sort of about that too. I appreciate you've kind of risk-weighted the international unit growth targets, right? But are there other situations where you think maybe franchisees aren't adequately capitalized, or do you have appetite, for example, for minority investments in some of those to try to drive that growth rate or maybe markets that are subscale that just aren't self-funding, but they need kind of a boost?
I really think the biggest opportunity for us in international in all these international markets is to make the unit economics really compelling in each of these places. We've showed, and David showed, sort of a lifecycle development chart of a lot of these markets where you enter, you spend some time trying to make the unit economics great, and then you can really ramp it up. We have a lot of markets right now that are in that phase. They've launched, they're starting to ramp up, and we're trying to get the unit economics right. I think the quality of the work that we do together with the partners to really get those models right is what will drive, as Patrick kind of said, the demand for new units. The capital will follow that.
I think that is the kind of the root cause, the enabler that we need to focus most of our time on. I think in most cases, once we have that right, our franchisees are going to want to invest behind it, and that part will pretty much solve itself.
Yeah. I mean, our job is to be a relatively asset-light franchisor of restaurants. And so it is not what we are ever going to lead with is kind of putting our capital to work. But it was a couple of months that I was in the company before I found out we own minority interests in 10 or 12 of our international master franchisees. So we've done it at different points in the past through different things that have led to that. But we've got a stake in a lot of our bigger master franchisees out there for a variety of reasons over time, but sometimes we have done that in the past. So it's never what we're going to lead with. But there have been times when we decided, "You know what? This makes sense to do it in this situation.
Sort of related to that theme then, Burger King U.S. refranchising, is that going to be kind of backend-weighted for the most part? Is this a situation where you want to kind of cultivate the future franchisees over time? You want to probably get the economics better for some of those units. What's the trigger for starting to refranchise those?
Yeah. So I think we've said we expect the refranchising to happen with Carrols probably over the years 3 to 7. And that's very intentional for exactly the reasons that you articulated and maybe one or two more. I think Tom and team correctly, they really want to make sure that our new franchisees are as successful as possible. So we want to take the time to make sure we choose those new franchisees correctly, give them time to prove themselves, train them, help them, and help them understand what they need to be successful as their own independent business owners. So that will absolutely take a little bit of time, and that's why we're telling you that the timeline will be a little further out. The other piece that I would be conscious of too is the remodel cycle.
We've said that we want to remodel essentially all of the restaurants over the course of the next about five years. One of the things on our mind is that as we set up these new franchisees, we'd really love for them to be going into business with almost entirely new asset bases. We don't want to spin out groups of stores that have huge capital obligations going with them. We really want to make sure that we set up these new franchisees for success. We know that it'll take some time to get through the majority of the remodeling, which is a little bit of what drives some of our refranchising timeline.
I'm sorry. Look, we're not going to be purists about this either, just in case Tom is listening. If we have a great existing 10-store BK operator whose restaurants are all reimaged today, and there are 10 of the Carrols restaurants that are next to them, and they really want to buy those restaurants and say, "Look, I've got the capital. I can prove it. I'll get these all reimaged in the next 24 months. Are we going to look at that?" Yeah. We're going to look at that, right? I mean, we just but for a lot of these, we want to give the opportunity to a lot of these operators within Carrols. And for those situations, we want to get the majority of these restaurants remodeled already.
Frankly, a couple of years getting to know these people and say, "Yeah, I want to bet on that person as a franchisee." They've been running a group of 10 or 30 restaurants or one restaurant, and they want to become a franchisee. I'd rather know them and see them operate for a couple of years before we decide to do that. So that's why we kind of set an expectation of most of this is going to happen between three and seven years. But we're also not going to be purists about it. If there's the exact right situation to do something sooner, we'll do it sooner.
Hey, this is Greg Francfort from Guggenheim. Patrick, I think if you'd polled the room and asked if you could see the fifth brand, Patrick's Pizza, the responses would have been very different. I just want.
I haven't eaten at Patrick's Pizza. Is it decent? Is it decent?
No, no. Just kidding. I had two questions. The first one was, I think both at RFDC and also today, you guys talked a little bit encouragingly about the U.S. coffee market. I'd be curious if you could give your thoughts on why you see such an opportunity there. And the other question I had, maybe it's a follow-up to Sarah's question, is and I really appreciate the disclosure you guys are giving about country-by-country unit counts now. But if you match it up to McDonald's, in a lot of markets, you're very similar to them. In a lot of markets, you're way behind them. And I'm curious where you see the bigger opportunities because when you're maybe first in a market, maybe there's not as much runway for market share, but you also command a really interesting position. And it's very different for the top 20 markets.
I wonder if you could just give some thoughts on that. Thanks.
Maybe I'll take the second one first. If you want to say anything on coffee, I'm happy to add thoughts there too. But Greg, I think it's a great point, to be honest with you. And if I were to look at kind of our business around the world, I think there are some underappreciated pockets of opportunity that are very relevant. If we kind of go around the globe, and you look at Latin America, that's probably where we're closest to our peers in terms of the size of our business versus our largest peers. So I think we've done overall a pretty good job on a relative basis, especially for Burger King. In Europe, I think that's where there's some underappreciated areas. And there are markets, as you point out, maybe Spain is a good example where we're pretty big.
I think we have a fantastic business there, very competitive. Turkey's another example where we're actually the biggest player. But there are a bunch of markets that are really big markets, high ARS markets, where we still have a ton of opportunity. And those include places like Germany, the U.K., France that we've talked about, Italy even. So some of those biggest Western European markets, I still think we can do a tremendous amount more. And those can be bigger contributors than I think we've counted on so far. We obviously have a lot of opportunities in Asia. That's where some of our biggest gaps are. And we've talked about those a lot. But I think you have to balance the focus on some of the Asian opportunities with some really substantial ones in Europe as well. And that's all just for Burger King.
Obviously, for the newer brands, we pretty much have opportunities everywhere.
On coffee in the U.S., and at least up until this moment, I'm very good friends with a lot of the folks involved with Inspire. But the fact is, today, there is one national coffee player, right? I mean, Dunkin' is a huge player, but their strength I mean, they just ran a Super Bowl ad with the three most iconic Boston-affiliated people you can think of, right? And their strength is still Northeast, right? And you think about all of the other players, Caribou, and you go through all and all of them, other than Starbucks, have real regional strengths, and Dunkin' included. They're very, very big, right? But the further you get away from the Northeast, they have had more struggles over time, right? And we look at that and say, "There's still a big opportunity.
There is not yet somebody other than Starbucks that has really broad distribution on coffee in the U.S." And so we see an opportunity still to go after that. And we've got a great leader on that business now in the U.S. We're excited about it. And look, Dunkin' is big, and they're a strong brand. And they are clearly you can't call them regional, right? The least you can say is they are at least super regional. But you still look at where their units are, and they still have a real concentration. And I am sure that their AUVs still correlate with how close they are to that original strength.
We still look at it and say, "As much as you have a lot of players excited about getting and growing in the coffee category in the U.S., particularly some of them getting more and more into cold beverage and the opportunities there, we look at it and say, 'There's no reason this can't be Tim's.'
Thank you. Yep.
Any other questions?
Hi. John Zamparo at CIBC. I know we've talked a lot about China today. I want to throw one more in, though, on China and the international business. Josh, you said international isn't a zero-sum game. I wonder if you can elaborate on that because it does seem like China's getting more competitive. Your competitors who issue long-term guidance on unit growth are taking those numbers up. Presumably, that involves China. It's overly simplistic to ask, "Do you need to be there?" We all know the population. But given how well you've done in other international markets, do you need to have it as much of a focus as you do, especially because capital contributions are potentially on the table? Given your finite amount of resources and mindshare, I wonder, could you focus elsewhere? Because it seems like it's a tough market for the next few years.
Thanks.
Yeah. The reason I was saying it's not a zero-sum game, and I think that thought is applicable to a wide variety of markets, probably the majority of the markets across our international business, is just because I see there's a huge secular trend that's happening across all the international restaurant sector. That's essentially the formalization and move to national brands. That's happened in the U.S. over the last 50 years or so. And it's probably in a more stable place in the U.S. We are decades behind that in most every international market that we're involved in. And I just think that's going to be a tailwind for us in our business, but frankly, for all of the large chain businesses around the world over the decades to come.
That's what I mean by saying in a less stable, less mature market environment, I think there's opportunity for everybody to grow. And I do think there's tremendous opportunities. We've listed some of them through the discussion today, whether it's Western Europe and some of the markets were not as big, whether it's other emerging markets. Places like India is probably one of the brightest examples of that opportunity. We have to be in those markets. We have to be competitive. And we really want to win in those markets. And I think we can do great things with those markets. But I do think China's a really important one. I think it's going to be one of the biggest restaurant markets in the world. It is today, and it will be for a long time to come.
I think our brands have a right to be there and a right to win. I really want to see them fulfill their potential in that market. That's why it is and will be a focus for us.
But not to the exclusion of others.
Yeah, for sure.
Well, just following up on that, it's Brian Jones from RBC. India, you're more equal with a lot of your peers, if not leading in the category given the population where the consumer is. In five years, are people talking less about China and it's all about India for unit growth in terms of the leading kind of place for you guys to grow units internationally? And what can you tell me about that now having been in these seats for a year? What is the opportunity in India?
Patrick and I have had a lot of debates about this topic. Yeah. When Patrick first joined, he was like, "Why aren't we talking more about India?" And I've gradually come more over to his point of view because it's such a tremendous opportunity. And I shared the anecdote earlier in our remarks, but I had a memory of India from 10 years ago when I was there. And I don't think I fully appreciated over the last few years how much India's evolved and how much it's growing and how that really changes the size and the potential of the market. There's so much development going on. And I think the trade areas that you can successfully develop chain restaurants are growing at a tremendous pace and can be so many times bigger over the next 10 years.
So I think it's increasingly clear to us that India needs more focus. I think it's gotten that. We now have three of our four brands there. The BK business, I think, as you said, the BK business has been very successful. It's quite scaled and competitive. Popeyes and Tim's are newer, but we're really happy with it. I think it's going to become a bigger part of our growth mix over time.
So Brian, here's a couple of facts I'd add in. First of all, my old employer is the largest restaurant brand today and operator in India, north of 1,500 restaurants. The partner there, Jubilant, happens to be the partner for Popeyes. That happened before I was here, but Jubilant is the group that's growing Popeyes there. There is a huge opportunity. I am a big believer in India. In 2023, the best estimate is that there were 23 million births in India, and there were 9 or 10 in China. And if you look out 20 years, those are your core customers. And so just from a pure birth rate standpoint, you look at India and say, "That's pretty exciting." Those are, by the way, the number one and number two birth rate markets in the world. But those are your future customers.
And so clearly, I mean, we are very excited about India as an opportunity. There's some debate about it. It may be the most populous country already in the world. And with its birthrate, if it isn't already, it will be in the next couple of years. And the economy continues to grow, and there is a lot to be positive about there. But those are the number one and number two. So we'd really like to be successful in both of them. It is not an either/or, but they are both very big markets. And we want to be successful ultimately with all four brands in both of them.
Hey, guys. Vince Sangleman, Truist Securities. Just a question on the guidance. I think you spoke to 8% system sales growth and 8% AOI growth. And you've mentioned a lot about driving operational efficiencies throughout the business. So can you just provide some puts and takes on why you're not expecting operating leverage in the long-term guidance?
Yeah. And we're not precluding it, right? We're saying we'll essentially grow AOI at least as fast as we do system-wide sales. I think there are a couple of puts and takes in there, though. There is the fact that some of the markets that we're going to be growing in, we earn less on some of those sales growth dollars than we do in some of our existing markets, right? So if you go to an international market where we just earn royalties, that's a bit different from, for example, our Tim Hortons business in Canada where we earn royalties. We're also involved in the property and the supply chain. So there is some mixed impact in there. I think some of that can be offset by some of the kind of some of the cost tailwinds, especially as we grow at a decent rate.
I think kind of the offsetting of those two things is what gets us to the conviction that we can deliver AOI at least as fast as system-wide sales.
All five of those brands have AOI growing faster than their system sales. But when you blend them all back together, you've got a little bit of a mix issue there that you've got to deal with.
Okay. Got it. Thank you. Then just maybe, if you can, provide some long-term expectations on your Tim Hortons Canada business, specifically the supply chain business?
Yeah. So the way I think about that, and I think Matt referenced this on the call on Tuesday, our expectation is that we think that we can probably get the margins there back up to something more like they were a couple of years ago throughout the course of this year in 2024. We had a bit of a dip in 2023. Then from there, I'd expect that supply chain business to roughly grow in line with the Tim Hortons Canada business. That would be my directional expectation of that business over the forecast.
I think we have time for one more question. Any final takers? No? Awesome. All right. Well, thank you all for joining us today, and hope you guys have a great rest of the day.
Thank you.
Thanks, everybody.