Good morning, and welcome again to the Evercore ISI Consumer and Retail Conference. I'm David Palmer, the food and restaurant analyst. I'm very excited about this fireside. We're joined today by Patrick Doyle, Executive Chairman, and Josh Kobza, CEO of Restaurant Brands International. Josh has been with the company for over a decade now, and has experience across a variety of roles, including the CFO of the company of Burger King Global, the Chief Technology and Development Officer as part of his role as CFO, and also the CEO role. So he's clearly gotten a wide range of experience coming into this. A year and a half ago, he was joined by Patrick as Executive Chairman, who we all know from his time as CEO of Domino's from 2010 to 2018. So welcome to both of you. Thank you.
Thanks, Dave.
Thanks, Dave. Happy to be here.
Yeah, earlier this year, you held an Investor Day where you unveiled your new algorithm, which incorporates same-store sales growth of 3%+, assuming 2%-3% inflation, 5% unit growth, and 8%+ system sales growth. Also, 8%+ operating income growth. This year you'll have a little bit less contribution from unit growth, forecasted at about 4.5%, but it's back-half weighted. So in terms of full year contribution, I think that roughly implies that your comp growth would have to be 4% for the remainder of the year. So that would be pretty strong performance, especially given the relative type of global fast food growth we've seen in recent months. Could you talk about the confidence in your global brands meeting or exceeding that level in 2024?
Yeah, of course. Thanks, Dave. So you're right, we laid out our growth algorithm earlier this year at our Investor Day in February, and we do expect to deliver on that algorithm this year. Particularly the 8% of system-wide sales growth, and then translating that to adjusted operating income of at least 8% or at least as high as the system-wide sales. As you mentioned, there are a couple different components of that. We noted that we expect the net restaurant growth to be in the mid-4% range. And so your math's right, that to hit the 8% system-wide sales, we've got to be somewhere in that 4% same-store sales ballpark. As you just kind of think through the year, we delivered just over 4.5% in the first quarter.
As you look at kind of how things phase through the rest of the year, there are some a little bit more difficult comps in Q2. We're comping over things like our Spider-Verse promotion that did really well with Burger King in Q2 of last year. There are also a little bit of softer comps in the back half, especially around Q4. There was some amount of softening in a couple of the businesses. So I think I would just keep an eye on a couple of those as you think through that phases through the year. But we do expect to deliver on the algorithm overall this year.
That's great. Let's dig into some of the brands. Obviously, the big one, Tim Hortons, over 40% of the income of the company. I first wanted to ask you about the Canadian fast food market and Tims market share trends in light of what seems to be a softening consumer environment up there. I think a lot of us remember a day when Tims was maybe vulnerable to a discounted coffee market by competitors and market share struggles that would happen during times of consumer weakness. You know, do you believe that Tims is positioned for same-store sales growth today and in light of softening conditions in North America, including Canada?
Yeah, Dave, to answer your question directly, yes, we very much do. I think it's important to just remember that I think one of the things that Tims does best is having excellent quality and the best value for money scores in the market. So the brand is very well positioned to succeed in any environment, but I think particularly a more value-sensitive market. But to a couple of the points that you made, there has been some amount of slowdown in Canadian retail sales overall. You know, just a couple of stats around that. You know, overall CPI is now down to around 2.7%, so you have seen a slowdown in inflation. That's similar, to your point, to what we've seen elsewhere in the world and in the U.S.
So you've seen a little bit less pricing in the market as a result, which is a, you know, a natural adjustment. Another thing, Patrick loves to talk about this a lot, is employment is one of the biggest drivers of our business. So you have seen a tick-up in unemployment. It's up about a point year on year. So that's something that we definitely keep an eye on. And that change is a little bit more pronounced in Ontario. So there are some macro stats that point to a little bit of softening, but I would just reinforce that in that context, Tims is the best-positioned brand in the market, and I think the team there has been executing very well.
We're focusing very much on value for money, on operations, and on expanding into new day parts, and we're very pleased with how the team is doing on all of those fronts. Sorry, go ahead.
No, I was just gonna say, the one thing I would add, Dave, is that you've got real population growth in Canada, which is, you know, on the plus side. I mean, you're, you know, you're looking at last year, I think 1 million plus growth, which, you know, I think a lot of people, U.S.-based investors, kind of think about Canada as being essentially a tenth of the size of the U.S. Kind of take the U.S., divide by 10, and that's Canada. You know, it's now divide by 8. You know, it's grown from 30 to 40 million people in a relatively quickly, in a relatively short period of time. So you've had some tailwind from population growth that was particularly pronounced last year and acts as a tailwind for us this year.
That's an interesting point. I wanna talk about some of the ways the brand is evolving up there. One of the big opportunities you've been highlighting this conference season is the PM daypart, made some overhauls to your menu, and the capabilities that are driving those extensions to the menu. Could you talk about how these have performed versus expectations? I'm thinking about the Loaded Bowls, the wraps, more recently, the Flatbread Pizza, and how will your go-forward strategy perhaps evolve in terms of the PM daypart?
Yeah, yeah, I think you called it out and described it correctly, and I would just highlight this is something that we've been working on for quite a while. If you look at everything we've been doing for the last couple of years, there's a very concerted effort to grow the business throughout the day into the lunch and PM dayparts. As you said, we've done that with our Loaded Bowls, with wraps. We've now added new equipment to the restaurants that allows us to do things like flatbreads and also other kind of hot and savory foods. So you've seen a very concerted effort to drive the pipeline of innovations that allows us to build that business.
We've paired that with a big push into cold beverages, and those are two things that go hand in hand. So hopefully you see a lot of the innovations that we're coming out with. They're part of a very distinct strategy to grow that business. We've been really happy with the results so far. I think you see that in the market share that we're gaining, and we're gonna do even more things as we go into the future, both on the product front, but also on the operations side. We're very focused on the quality of our operations through lunch and into the PM part of the day. We are incredibly fast in the morning in that sort of 6:00 A.M. to 10:00 A.M. rush, because that's where we've put most of our focus historically.
So we're starting to shift a lot of our operations focus now to midday in the afternoon, trying to get more of our managers spending more time and focus on those dayparts, so we can increase our speed and our guest satisfaction through those dayparts. So that's a big focus of a lot of our training and our systems is making sure that we both have the products, but we also have the service that we provide in the morning delivered throughout the day. And I think those two things together will be kind of where we put our energies to continue to grow our PM daypart, our PM market share.
Is it silly to think that this brand can evolve similarly to what we've seen with, Dunkin' in the U.S. or Starbucks in the U.S.? I think your third of your mix or so is cold beverage today. I think Dunkin' might be closer to 60, at this point, 55%-60%, and I think Starbucks is closing in on 75%. So do you see any reasons why you can't make it a pretty big leap over time, and that could help your growth rate?
I think we're gonna continue to move in that direction overall. I think the consumer is moving in that direction. I think we'll build more of an afternoon business, which I think you've seen some of the competitors, like Starbucks, do in the U.S. So I think the market's moving there. I think we will continue to move there. And frankly, if you look at some of what we're doing in other markets, whether it's international markets or some of the new southern markets we've opened, like Texas or Georgia, you would see really high cold beverage mix-
Yeah
... that, that's more similar to what you noted in some of those competitor brands. There may be some reasons that Canada won't move, the Canada business won't move all the way to where, whether it's Tims in the South or Starbucks or Dunkin' in the U.S. are. Some of that, I think, is consumer preference. There's some amount of climate, frankly, which shapes the hot and cold beverage mix, that, you know, that the temperatures are really important to which beverages, people choose. We see that, frankly, even in our day-to-day sales. If there's a swing of five or seven degrees, our cold bev, hot bev, mix will move massively. So there's some amount of climate that probably prevents us from going all the way to where those businesses are.
You know, the other analogy that we think about a lot of in terms of where our business is, is gonna go, is sort of an inverse of what McDonald's did moving into breakfast. You know, their business historically was a very lunch, burgers and fries, lunch and dinner, burgers and fries business, and, you know, they made a very deliberate effort over a number of decades to build a morning business. And I see a bit of what we're doing with Tims as sort of the opposite, or an inverse version of that, that same movement, which involves product offerings, involves operations and systems. And you gotta keep at it for a long period of time to build those routines and build that business. So that's what we see ourselves doing over many years to come.
I think the only thing I'd add is that last summer, I believe, we actually sold slightly more cold beverage than we did hot beverage. So it does, it is pretty seasonal. I mean, and so I would expect that the cold and the hot mix will, as Josh described, will always be relatively more hot in Canada than than you see from the U.S. But, you know, in the middle of the summer, we were basically a 50/50 mix last year, and importantly, our service times continue to not only are they incredibly fast, but they continue to get better. The team and the franchisees have done just an amazing job-...
of managing that shift, in mix in a way that the person who's coming for, you know, their hot Double Double , in the morning is still getting a better experience this year than they were a year ago or five years ago?
You know, I was gonna ask you about that. You know, with 50% of your business before 11:00 A.M., that's a lot of traffic, and that's a big opportunity if you can really drive that faster. You know, we've seen some natural progression in productivity in the U.S. fast food market just because of the labor situation, and people have had, gotten an opportunity to keep teams together a little bit better and focus and... Are you seeing that in Canada? Any way that you can illustrate to us what sort of progress is being made, and where you see that going?
Yeah, it was a great example that I saw just a couple weeks ago. I was out in Calgary with a couple of our franchisees at a restaurant that they had just renovated, and I think this restaurant was doing around... It was 180 or 200 cars per hour, which is a pretty phenomenal-
... One every 20 seconds.
Yeah. This is pretty. And it illustrated a couple of the things that we need to do. One, it's amazing franchisees who are really focused, and experienced teams reducing turnover such that the teams are, they really know what they're doing. Some of it is training, so we're putting a lot of focus of our field teams and our training teams on doing shoulder-to-shoulder training of how do we get faster in the morning in the drive-thru. Some of it is systems, so I think software is something that can help us here. Whether that's applications that just surface what we're doing and what's driving it and how fast we're going. Some of them create a little bit of a competitive dynamic.
There's a bunch of things that I think we can do in terms of our software systems that'll make us faster. And one of the things that I saw, you know, in that Calgary restaurant so clearly, is how a renovation can impact our speed of service in terms of how we lay out the restaurants. And you know, it's interesting is you were talking about how we got to 50/50 mix of cold bev, hot bev over the summer. You know, I was thinking about if you go 10 years back, we were so far from that.
Yeah.
The restaurants were built and the kitchens were built for a very different business than what we have today. It was built for mostly hot brewed coffee going out the drive-thru. Now we have much more going on, right? We have espresso-based beverages. We have a lot of cold beverages. And so what we're doing in these renovations is we're really focusing on the kitchens, and making sure the kitchens and the equipment are set up as optimally as possible to deliver the best possible drive-thru speed of service. And that's what I saw in this restaurant in Calgary, was probably the best layout I've seen us have yet. And that's a big part of how we can effectively do 180-200 cars per hour. So as we're doing those renos, and we do...
You know, we're trying, we generally stay on, like, a 10-year remodel cycle. One of the main focuses of those renovations today is resetting some of the layout of the back-of-house to make sure that we are doing everything we can to get faster in that sort of 6:00 A.M. to 10:00 A.M. peak in the morning.
That's great. I don't often ask about Tims U.S., but we're noticing from the way you presented that your net unit growth for this brand much of it is gonna come from the U.S. through 2028. Could you talk about the journey to accelerate the unit growth in the U.S., the pipeline and the re-recruiting, what you're seeing from the new units so far?
Yeah, and you know, we put in place a new president there with Katerina Glyptis, and she's doing a fantastic job on the team and supporting the franchisees and our new franchisees who are joining. You know, I think we've gotten to a much more compelling model with Tims in the U.S. over the last few years. We've got down to a little bit smaller footprint. We now have all of the product offerings, and I think amazing versions of the product offerings, to make us competitive across the U.S. A lot of that, some of the cold bev that we talked about, that we've developed over the last three to five years, and that's allowed us to be more successful in some of the new markets we've gone to, so places like Texas and Georgia.
You've probably read, we've signed up a lot of new, a lot of new franchisees across a variety of states in the U.S., both in the North and the South. So I think that's giving us confidence, both the performance and the demand from franchisees. So, you know, we're feeling reasonably good. I think there's a lot more work to do, to prove it out, to open a lot of good units across a lot of these states, and get to critical mass in a lot of those markets. But I think Kat's doing a really nice job. The only other caveat I would add to that is, based on what Patrick said about population growth in Canada, I wouldn't write off Canada as a potential growth market.
You know, if we're growing population in Canada, maybe last year was a little bit on the high side-
Yeah
... but if we're growing population 1 point a year and we've got 4,000 restaurants, you know, you could think we maybe should add some- we should add some restaurants there. And there are some places where I would say we are relatively under-penetrated. You know, out west is one of them, and so that's something we're looking at as well, is whether you know, we should be growing a little bit more than we thought in Canada.
Yeah, I definitely felt that, that expansion up there recently. The traffic in Toronto was remarkable. A lot of it.
Yeah.
Let's pivot to Burger King U.S. I know it's only 20% of your profit, but clearly, it's a big focus for investors. And of course, that profit exposure is going up a bit with the recent acquisition of Carrols. What's your diagnosis of the U.S. fast food space lately? What do you think has occurred in the environment to drive a slowing of the industry and create what seems to be a more value conscious consumer in 2024?
Yeah, you know, I do think there has been some slowing in the overall consumer environment in restaurants, and we do see some amount of pressure on the lower income consumer. You know, we see that a little bit. Well, we can see in spending by demographics. We also see it a little bit in people sort of managing their check. You can see consumers are being thoughtful about how much money they spend, and you can see that somewhat in things like lower attachment rates that we see. So if somebody's coming in with $10, and they spend the $10, but maybe they don't add a drink or a side.
So we do see a little bit of that in the data in the short term. And we've made some adjustments to what we're doing. So we brought back the $5 Your Way Meal as of just a couple of days ago. You know, we know that works well. It's not anything new for us. We've had it before. We know that's compelling to guests. And that has a little bit of an advantage versus some of the stuff we did before, like the $5 Duos, in that it brings back attachment. So we have fries and drinks in that meal. But, you know, what I would say kind of overall, I would just tell you, we are incredibly confident in where Burger King in the U.S. is going.
You should take our acquisition of Carrols as probably the strongest sign of that. We are happy to be more exposed to the turnaround at BK, because we're so pleased with the work that Tom Curtis and the team are doing. We know that they are doing all of the right fundamental things to make this business successful. And I think as you look at what's happening with the U.S. consumer today, a lot of people have pointed out there's sort of a divergence in performance. Some brands are doing better, and some brands are struggling a lot. And for me, the defining factors of who's winning are the brands that are doing the fundamentals right.
They're focused on quality, they're focused on improving the service at their restaurants, and they're making sure that they have beautiful modern assets. Tom is working on all of those things, and I think we're making a lot of progress on those fronts. Which is why regardless of the, you know, the consumer environment in the short term or medium term, we think that we're gonna make a lot of progress in the business. And we'll measure that and hold ourselves accountable in terms of our market share of traffic and sales over time, and, you know, we've been doing pretty well on that in recent quarters.
As you can imagine, heading into July, people are asking about what is gonna happen. You know, there's gonna be a lot more value messages swirling about. It's very important weeks and months of the year. You know, what is your prediction about what's gonna happen in fast food when value messages start swirling about, and how will it affect Burger King?
Yeah, you know, like, like I said, what we're doing, you know, we've been focused a little bit on the $5 value meal. It's not new. And, you know, I think frankly, if you look if you look across the space, a lot of these value messages are already out there. And they've been out there for some time. I know McDonald's has a month-long thing coming up, but what we're doing is not new, and what most of our competitors are doing there are not new. And it's not gonna change our overall strategy, that we've been pretty successful with over the recent quarters.
And frankly, if there has been a lot of coverage of the idea that the QSR industry is gonna give more value to customers, that's good for the category overall, that there's a perception that maybe prices had gotten a little too high. Some people had taken too much price, now there's gonna be more value. That's hopefully gonna help the perceptions around the category in general, get some people to open their minds to coming back to the category a bit more. So I honestly, I think it's healthy.
Yeah. Yeah. It'll be interesting to see if the industry benefits from wars in their perception of the value of the segment.
Yeah, and the interesting thing is, it's really the perception of, of those wars. Nothing's really changed, right?
Yeah.
I mean, our promotional calendar is what our promotional calendar was. We may have moved something forward a little bit, but, you know, what we're running, what we started this week, we ran in the first quarter of last year, and it was in our plans for this year. And so, you know, to my mind, nothing has really dramatically changed. It's just that there's been a lot of discussion about it, and if that brings awareness to customers that good value is there to be had in the category, it's a net positive.
Yeah, no, interesting, and we'll have to see how this goes. I hope it's enough value for people. You know, one of the things that's been important to you is the franchisee profitability, and I think investors recognize that and like what they're seeing. Certainly the profitability's come a long way, rendering a period of what seems to be a little bit more stable inflation, and a little bit less labor trauma out there. Could you talk about what would be the key unlocks from here to get to that 300,000 in EBITDA per restaurant?
Yeah, and I would just start by saying, well, that we're very pleased by the progress we've made already. I think, how far we came in a very short period of time is, it exceeded my expectations, I think most people's expectations of how we would do, and I think that gets us to a much healthier starting point to then think about where we go and how we invest to go forward. I think for me, a big piece of the bridge from where we are today, around 200, a little bit above there, to 300-... is gonna be the remodels. We've gotta make the investments to get to really compelling image.
I think if you just do the math on kind of remodeling half the system and getting reasonable uplifts, you know, you get a lot of the way from $200-$300. So that's probably the biggest piece, and we're gonna drive a big piece of that with our restaurants and our new larger portfolio of restaurants. But we've also got the franchisees on side, and we've already announced all the investments that we think will take us there. So that's a really important piece, I think, of getting from, you know, $200 and change to $300. For me, there's another really big piece, which is the franchisees and operations.
You know, we still have some underperforming franchisees, and there's a big gap between the underperforming franchisees, kind of your lower-graded, the sort of D/F, and what A and B franchisees do. So Tom's made a lot of progress on this front, but there's still more to do, and that's the stuff that's harder to model. You know, it's harder to get a sense for, it feels a little bit softer, but I think it's perhaps one of the most important things in terms of driving our performance and getting to the $300,000 level. And honestly, if you look at the A-performing franchisees today, they're there, you know? So the business can be managed that way. We just have to keep putting pressure, helping those who wanna get better, and making changes for those who don't.
So I think that's gonna be a big part of the bridge over the next four or five years. And another piece that I think is gonna be important is technology, and this across a lot of fronts. You know, everything from automating all of the order taking, which I think is a question of when, not if, and also getting more efficient about how we manage our labor in the back-of-house, and how we help those kitchens be even more efficient. There's not that much sophisticated software managing all of that today in our system, and I think we need to get there over the next three to five years. So I think technology will be a big part of how we change the margin profile of the business in the next few years.
So those three things together, I think, can get us to 300,000 or even further, and we'll keep working on them over the next few years.
I wanted to ask you about the remodeling program, and you know, there's a $300 million investment to help get that Burger King system up to the modern image. I think it's 85%-90% goal over the next few years or so, from 46% currently. You know, could you tell us about the new Sizzle image, what differentiates it from the past remodel formats, and then maybe a sense of what you're doing in terms of your contribution and what the return is for you and for the franchisee?
Yeah, so, we love this new Sizzle image. I think it is incredibly compelling. We've got, you know, a bunch of them now across the country, so if you get a chance, I'd really suggest going to see one for yourself. I think it's one of the most compelling and differentiated images that's out there in the QSR space today, so we're really excited about it. You know, there's a few things that I think are important. One, it is a much more digitally oriented restaurant format, so we're really changing the layout of the restaurants to make sure that you're set up for automated ordering. We're also doing a very different scope of remodel than we've done before.
If you go back to kind of the early 2010s, we were doing lighter scope remodels, sort of $200,000-$300,000, that were a bit more cosmetic. Here we're doing much more comprehensive remodels that I think have a larger impact on the consumer experience and the perception of the brand, and you see that already in the uplifts that we're seeing. You know, we've talked about the uplifts, they were kind of high teens already, and I would just point out those high teens uplifts, they are not all from Sizzles. So a lot of those are just remodeling to our Garden Grill image, and, you know, I'm hopeful that the Sizzles are gonna do even more because I think it's a much more compelling image for the brand.
In terms of the returns that we modeled out, both for the franchisees and for Burger King as the franchisor, we generally looked at these and modeled them out to give a sort of low to mid-teens returns for the franchisees, and sort of a low teens return for Burger King. That was at the uplifts that we had disclosed in the FDD before, so that was sort of low teens, I think in the 12% range. So to the extent we're able to outperform on average, you know, those uplifts, I think the returns are pretty good for everybody. You know, that said, you're gonna have variations, right? Not every remodel's gonna do exactly the average. Some are gonna do better, some are gonna do worse.
That's part of it. I think for me, I would just say, kind of to wrap up, stepping back, you know, I have a point of view, that you... For us to be competitive in the U.S. today, if you drive down the street, there is a remodeled McDonald's, there is a new Chipotle, there's a new Starbucks, there's a new Raising Cane's. If you wanna be competitive in that space, on that street in America, you have to have a new, like, convenient, nice restaurant that people wanna go to. So for me, this is something that you have to do. This is a cost of doing business to be competitive in the market today.
We will do our best to, to make sure that we, you know, we deliver the uplifts, you know, as often as we can, and get as good of returns as we can for, for BK and, and for our franchisees. But I think this is something you have to do if you wanna realistically, be competitive in the market today.
David, I think the thing that we, none of us have really looked at yet, is there is a catalytic effect at some point, and there's no perfect magic percentage—but I've seen it in my past life, you've seen it in the category. There is a point at which when the majority or vast majority of your restaurants look great, it lifts the whole system even more, and right now we're looking at one-off remodels. What do you get in a Burger King system where half of the restaurants look great and half of them don't? What is the lift that you get one by one as you re-image, remodel that restaurant?
There's a point at which, and I don't know if it's 70% or 80% or 85%, but somewhere in there, most people stop seeing an ugly, old Burger King, which just damages the brand every time they see that. And when that is a rare thing for them to see an old Burger King, the whole brand elevates, and people get a return just from everything that's going on around them, in addition to the individual remodels they did. So that's still in front of us.
We're coming up on our final minutes. I'd love to work into talking about international, which is obviously a fantastic business, 27% of profit, but contributing over 40% of long-term growth according to how we're modeling it, so just an unbelievable business. Could you just walk around the world a bit, particularly with Burger King International, you know, what's going above average in terms of same-store sales growth out there? What's doing below average? And then maybe tie that to the reasons. I mean, there's obviously some political US brand backlash out there in certain areas, and then there's obviously some economic issues in certain areas as well. So, if you would, walk us around the world.
For sure. I'll do my best to cross the geography here. But as you said, overall, it's a really good business. You know, financially for us and for the franchisees, it's a good business around the world. And it's. There are a couple things that are unique about it. The brands are generally newer, more aspirational. The actual restaurants are generally newer, just because they're more recent. And in many places, we have pretty compelling market share, and in probably a less competitive on average environment. So there's a bunch of characteristics about that business that make us really love it.
If I go around the world, I'll start kind of in Latin America and then cross in terms of some of the major markets and how they're doing. In Latin America, probably our biggest market is Brazil, and that's actually been doing much better this year. So we've had some marketing activations that have been more effective there, so we're seeing some pretty good same-store sales. If we go across Europe, our biggest market's France. You know, the team there has done a fantastic job. I think that's, you know, just so emblematic of getting all the basics right. They have beautiful restaurants that are well-built. They manage the brand really well. The quality of service, especially we have some incredible franchisees there.
I was actually with them just outside of Lyon, the other day at a place called Feurs, and, you know, we're in a small town doing EUR 4 million of ARS, and the restaurant operations are incredible, like, so amazing. So, the French business is really doing wonderful, and they've been taking a lot of market share there. You know, I would say within Europe, we've been doing okay in the U.K. Spain is a great business. Germany has struggled a little bit. The macro's been a little bit tough there, and we have some things to work on there in terms of things like remodels. So Germany needs a little bit of work. There are some places in the Middle East that are a little bit softer.
So there's some impact of some of the geopolitical stuff that's going on. If I go to Asia, you have some markets like Australia that's doing really well. Chris Green, who runs that, is fantastic, and he's been doing a really good job. Our business in Japan has been a big success lately. That was a smaller business, now it's starting to grow, both same-store sales and net restaurants. And then I would say China has been a bit softer. I think there's both some macro things that are going on with with consumer spending there, and there are some things that we need to work on for sure as well. So those would be my sort of highlights of places that are going well, and then some that need some work.
As you pointed out, I think some combination of macro factors in some places, some things that we need to work on, and we're doing that with our teams.
That's fantastic. I know we're gonna go over a minute or two, but I would love to touch on Popeyes before we wrap up. I know, Patrick, it's been a little bit of a passion for you to look at the opportunity for that brand. You know, you said, I mean, you would love to have the Popeyes type of problems, which are sort of that operational opportunity. Could you talk about the Easy to Love kitchen format? There will be a lot of changes there. What's the capital outlay for that? What is overall the opportunity for that, and the rollout pace that we could expect for that?
Yeah. Well, look, it all starts with amazing food, I really believe the best food in the category. The demand is there. If you get people to try Popeyes and you give them a great experience, we win. And our sole problem there has been, one, it's just been too inconsistent, and it's really been on us, because we haven't equipped our franchisees with a kitchen that allows them to be as fast and efficient and frankly, to have a restaurant run really well by somebody who hasn't been running that restaurant for five or 10 years, and we see a huge divergence there. If you've got a very experienced general manager, restaurant manager in Popeyes, those restaurants will do incredibly well. And you'll have units that are doing $4 million or $5 million a unit.
But you can't count on, you know, building that with 5-and-10-year tenure general managers. You aspire to that, but you've gotta have a restaurant that somebody who's been there six months or a year can succeed in and can drive great customer experiences. So that's what we're doing. So by the end of the year, we should have a few hundred of the Easy to Run restaurants rolled out. We're seeing really compelling results from the early ones that we've converted. And I just couldn't be more excited. If, if, if we're able to do that, and I really believe the team has figured out the answer, have the best food in the category, but make it consistent and fast, I am incredibly optimistic about Popeyes. And then we just need a lot more restaurants, 'cause the demand is out there.
Well, we will end it there, guys. Thank you for the great conversation. Thanks, everybody, for listening. We'll talk to you later. Thank you.
All right.
Thanks so much.
Thanks, Dave. Great to see you.