Awesome. Good morning, everyone, and welcome. I'm Kendall Peck, the Vice President of Investor Relations and Treasury at RBI. We really appreciate you taking the time to join us, whether in person here in Miami or live via our webcast. I have the very exciting job of reminding you that today's remarks will include forward-looking statements, and these statements are subject to various risks and uncertainties set forth in our SEC filings and the press release posted this morning, which can be found on our Investor Relations webpage. Today, you will be able to hear from Patrick Doyle, our Executive Chairman, Josh Kobza, our CEO, Sami Siddiqui, our CFO, and Tom Curtis, our President of Burger King U.S. and Canada.
The four of them will be doing prepared remarks, after which we will be having a panel with all of our business unit presidents, including Tom, and he'll be joined by Axel Schwan, President of Tim Hortons Canada and U.S., Thiago Santelmo, President of International, Peter Perdue, President of Popeyes U.S. and Canada, and Mike Hancock, President of Firehouse Subs U.S. and Canada. We know some of you were unable to join us today due to the difficult weather in the Northeast. For those participating live on our webcast, you may submit a question during our Q&A session by emailing investor day@rbi.com. Please include your full name and your firm, and we will ask that question during the live Q&A session should time permit. For those of you joining us live in Miami, thank you for making the journey down here.
We are also very fortunate to have 30 of our most senior leaders from the company with us today. We hope you take the opportunity to get to know them during breaks and lunch. They're amazing and will provide you with a lot of insights into some of the work that we're doing here at the company. Thank you again for joining us. With that, I'd like to welcome our CEO, Josh Kobza. Thank you.
All right. Thank you, Kendall, and good morning, everyone, and welcome. Thank you for being here with us today in Miami. It's great to have you at our headquarters. Miami is a special place for our company and one we're proud to call home. Many people don't realize that Burger King was founded right here over 70 years ago by Jim McLamore and David Edgerton. In fact, the very first Burger King was opened just five miles from our headquarters here. Jim and David built Burger King around flame-grilled burgers and established it as the home of the Whopper. While Burger King's story began here in Miami, each of our brands has its own origin story, rooted in unique communities, cultures, and guest needs, but built on the same principles: bringing guests quality food and beverages, great service, and convenience.
In 1964, Canadian hockey legend Tim Horton opened his first donut and coffee restaurant in Hamilton, Ontario, and soon teamed up with former police constable Ron Joyce. From the beginning, Tim Hortons was built around great coffee, baked goods, and the community. Al Copeland opened the first Popeyes outside of New Orleans in 1972, rooted in craveable fried chicken with bold flavors and an authentic Louisiana heritage. In 1994, brothers and former firefighters Chris and Robin Sorensen opened their first Firehouse Subs in Jacksonville, Florida, built around hearty, hot subs and a deep commitment to service. Across all four of our brands, there's a common thread: they were built by dedicated operators focused on creating something durable, relevant, and meaningful for guests and for their communities.
Their legacy shapes how we run RBI today, with an ownership mindset, deep respect for our franchise partners, their teams, and their communities, and a willingness to invest through cycles and make hard decisions. Most importantly, we all have a commitment to building our brands in a way that their founders would be proud of. We decided to host an Investor Day because we know there are important questions about our business, and we want to address them directly. Today, we'll be hearing about what's working, where we need to improve, and how we're positioning RBI for the future. As you listen, I'd ask you to keep this simple vision in mind. Our vision is that by 2028, RBI will be a 99% franchised company, delivering 5% plus net restaurant growth, with predictable earnings growth, a strong investment-grade balance sheet, and attractive double-digit total shareholder returns.
At the same time, we aim to be the franchisor of choice for the best operators and the employer of choice for the best talent in the industry. In doing so, we are committed to being the most respected, loved, and trusted restaurant business in the world across all of our stakeholders, from guests to franchisees to shareholders. Everything you'll hear today, from the work we're doing here at Burger King to our global growth plans to our path to simplification and our capital allocation strategy, is designed to move us closer to that outcome. With that context, let me walk you through the agenda. I'll start with an overview of RBI and how our structure supports our 2028 vision. Tom Curtis will join us to share progress on Reclaim the Flame. I'll come back to outline the building blocks to 5% plus net restaurant growth by 2028.
After a break, Sami will walk through our simplification and capital allocation priorities. Patrick will share his thoughts, and we'll hear from our business unit presidents in a panel and Q&A. With that, let's get started with a quick reminder of who we are as a company. I joined Burger King in June of 2012, just after we went public again. At the time, we had one brand, $16 billion in system-wide sales, and about 13,000 restaurants in 85 countries around the world. Since that time, we acquired three iconic restaurant brands, Tim Hortons, Popeyes, and Firehouse Subs, and solidified ourselves as a world-class global restaurant business operating in four of the strongest QSR categories worldwide. Today, our brands collectively generate nearly $47 billion in system-wide sales across more than 33,000 restaurants in over 125 markets, with each brand playing a distinct role in our portfolio.
Tim Hortons is the clear leader in coffee and breakfast in Canada, a brand deeply woven into the daily routines of millions of Canadians, with unmatched convenience and one of the most engaged restaurant owner groups in the world. Burger King is one of the most globally recognized restaurant brands, with nearly 20,000 restaurants around the world serving our guests our iconic flame-grilled Whoppers their way. Popeyes has grown tremendously since our acquisition in 2017, bringing its bold Louisiana flavors and truly differentiated best-in-class fried chicken to one of the fastest-growing QSR categories in the world. Finally, Firehouse Subs, our newest brand, is an important emerging growth driver in an attractive category, differentiating itself through its high-quality subs and strong community roots. Across our portfolio, our brands consistently deliver what matters most to guests: quality, service, and convenience.
Those fundamentals matter more than anything else, and they're where great restaurant companies differentiate themselves over time. Stepping back, it's also worth reminding ourselves that we operate in an excellent industry. The quick-service restaurant industry is one of the most stable, long-standing, and attractive consumer categories globally. Restaurants meet a daily need. People need to eat three times a day, every day. QSR wins on affordability and convenience. Within QSR, franchising, when done well, scales that model effectively by aligning capital, local ownership, and long-term brand stewardship. The combination of these dynamics with our ownership mindset, aligned franchise partners, and operational know-how positions our brands to endure through the cycles, adapt, and serve millions of guests every day. With that context, it's worth spending a moment discussing the top three advantages of our multi-branded structure. First, our ability to scale brands globally.
Second, our ability to allocate capital with a long-term lens. Third, our ability to develop talent and share best practices and capabilities across our system. Let's start with our ability to scale brands internationally. Based on the conversations I have with our investors, I believe the quality of our international business is often underappreciated. We've built one of the strongest global growth platforms in the industry, supported by a deep network of well-capitalized franchisees, suppliers, quality assurance, and local support teams. That infrastructure was developed over decades through Burger King's global expansion, and it's not easily replicated. It's a true competitive advantage that only a select few global players enjoy, and one we are leveraging as we bring Tim Hortons, Popeyes, and Firehouse Subs to many new markets all around the world.
An important extension of that advantage is the opportunity we create for franchise partners to scale multiple brands within their markets. Take Gregorio Jiménez, or Goyo as we call him, who began operating Burger King's in Spain in 1981, and Borja Hernández de Alba, CEO of Restaurant Brands Europe, we call him Borja. Goyo transformed Burger King into the largest QSR business in Spain, with $1.7 billion in system-wide sales and nearly 1,000 restaurants as of 2025. Together, Borja and Goyo built on that foundation to expand Burger King to Portugal and bring Popeyes to Spain and Italy, leveraging their real estate expertise, operating infrastructure, and local market knowledge. While I love to tell their story, I thought it might be better for you to hear it from them directly.
[Foreign language]Soy Gregorio Jiménez, Presidente de Restaurant Brands Europe, y cada vez que recuerdo y echo la vista atrás de cuando en 2016 llegamos a un acuerdo con Restaurant Brands International para desarrollar el proyecto de BK en España y Portugal con una EBITDA de poco más de EUR 40 million, hoy hemos conseguido superar una EBITDA de EUR 240 million. Queda mucho por hacer, y esto es gracias a contar con los mejores equipos posibles.
I'm Borja Hernández de Alba, CEO of Restaurant Brands Europe. I've been involved with the Restaurant Brands International Brands for the last 15 years. The first time I joined the company, we only were in one country and one brand. Today, we operate three brands in three different markets. The journey has been amazing. It's an example of putting together three strong brands with a local operator with a very extensive experience in execution and operations. The partnership with Restaurant Brands International really helped us to grow faster and with a lot more consistency. The support they give us in marketing, technology, or procurement helped us to grow much better and more efficiently with better profits.
[Foreign language]El desarrollo en los últimos años ha sido espectacular. Hemos abierto una media entre 80-100 restaurantes anuales. Nosotros representamos un 30% más de restaurantes que nuestro principal competidor en España. En Portugal, en un tiempo récord, hemos pasado de tener un 50% menos que el principal competidor a estar ya en las mismas condiciones. Hoy, Popeyes, estamos en 180 restaurantes. Esto en five años. Yo creo que el éxito es rotundo. Hay que seguir apostando por ese crecimiento y por la cercanía al cliente.
We think we can push it to have more than 500 restaurants. It really generates a lot of passion when you see Burger King and Popeyes growing internationally.
RBI [Foreign language]es el partner perfecto. Es el partner que nos ha dado confianza en el proyecto y en todo momento nos ha apoyado.
When you come and see it in our markets, in Spain, in Portugal, and in Italy, the growth year after year is confirming that the strategy that we are following is working, getting closer to our guests, giving good operations, and extremely good products.
[Foreign language]Este es un proyecto para creer en él con pasión. Es un proyecto para realmente estar convencido de que son marcas de éxito. La referencia de que esas marcas de éxito se traducen en resultados lo tenemos en Restaurant Brands Europe. Ahí está el ejemplo real, hay que creer en ese futu[[ro y contar con los equipos adecuados para desarrollar ese gran proyecto.
Awesome. What a great story from Borja and Goyo. You can see the power of our ability to scale brands globally very clearly in what we're doing at Popeyes International. When we acquired Popeyes, it had around 475 restaurants and less than $300 million in system-wide sales across about 25 countries and territories outside the U.S. and Canada. Today, Popeyes is a top 10 Western QSR business globally, with more than 800 international restaurants, over $1.7 billion in system-wide sales, and nearly 40% system-wide sales growth in 2025. Growth like that at this scale doesn't happen overnight, and it doesn't happen without the foundation that we built at Burger King. A fantastic example of the brand's international potential and our ability to scale quickly by partnering with well-capitalized, local owner operators is Popeyes in the U.K.
We entered the U.K. in November of 2021, and under CEO Tom Crowley's leadership, we quickly scaled to roughly 110 restaurants and nearly $250 million in system-wide sales as of 2025. Tom has a ton of experience running restaurants, so I thought it'd be best for you to hear directly from him what makes Popeyes U.K. so special. Let's roll the clip.
Hi, I'm Tom Crowley, the CEO of Popeyes U.K. I've been in the hospitality industry for over 30 years. We opened our first Popeyes here in the U.K. in 2021. It's a huge success, something after 30 years of doing this, I have never seen anything quite like it. There is white space here, for sure, for great chicken and great brands, but the heritage and the history of New Orleans and the brand bring something completely different that just doesn't exist in the U.K. at the moment. What's working so well for us is the quality of the product. First time people eat a chicken sandwich, the look on their faces is just amazing.
We also then try to create an environment where people find that it's very different to QSR, whether it's the design of the restaurants, whether it's the service experience, whether it's the music we play. We just try to bring a little bit of the spirit of New Orleans to everybody's day in the U.K. RBI are a great partner for a business like us, bringing all those learnings from other markets that have scaled maybe before we have so we don't make the same mistakes, but we also have those opportunities early so we understand where we can go next and what might happen next year or the year after. We started with the first restaurant in November 2021. We opened 15 restaurants in year two. We opened 35 restaurants in year three. Last year, we opened 47 restaurants.
Every year we've scaled the business, we've seen the same reaction wherever we've gone. We have queues for Popeyes literally sometimes 24 hours before we open the door. As we look forward into the next three, four, five years, we see huge opportunity to keep pushing this brand into all the regions of the U.K. As you scale the business, strong sales, of course, give you a very strong starting point, but also the ability to buy better as you grow the business, to control labor, bringing systems in that allow you to control all those critical parts of the P&L, something you get better and better at as you scale a business. We've also had good control of CapEx, which is every year we've managed to reduce, running paybacks under four years.
When I look forward into the next five years, there's nothing but sheer excitement about what the opportunity is for Popeyes U.K. We have created something exceptional with this brand in the U.K. When I talk to my teams about the future, I talk about creating a legacy, something that maybe in 20 years' time we can all look back on and say, "We did that." Very few times in a career in hospitality do you get these opportunities, and for sure, this is one of them.
Awesome. Thanks, Tom. Looking ahead, it's stories like Tom's that make us so excited about the opportunity for Popeyes in their national markets. With significant white space, superior product quality, and a proven new market entry playbook, we believe Popeyes has the potential to become one of the most meaningful growth engines in our portfolio. The second advantage for RBI is the strength of our free cash flow generation across brands and geographies that grants us the flexibility to allocate capital with a long-term perspective. Each of our five business unit presidents is accountable for executing their strategy across marketing, development, franchising, and operations. At the enterprise level, our role is to ensure ample investment across all of our businesses while leaning in to accelerate growth where appropriate. This allows us to invest through cycles, take a disciplined approach to returns, and avoid short-term trade-offs that undermine long-term value creation.
That flexibility is especially important in the restaurant business, where sustainable improvements can take time, and it's an advantage that standalone brands often don't have. Third, our structure lets us share back-of-the-house capabilities and talent. Centralizing legal, finance, procurement, communications, and global business services reduces friction for our brand teams and allows leaders to stay focused on brand building and running great restaurants. Our global RBI procurement team is a great example of the value this unlocks for our brands, franchisees, and suppliers. The team, led by Paul Lacy-Smith, is anchored in three core tenets: deep category expertise, a seamless and disciplined process, and the ability to leverage RBI's global market presence to deliver better outcomes for all of our stakeholders.
Over the past three years, Paul and his team, and Paul's right over there, have delivered around $700 million in cumulative savings for franchisees across multiple food, beverage, paper, packaging, and media categories, while also improving service levels, unlocking access to innovation, and building more collaborative relationships with suppliers, all of which serve to support a better guest experience. Underpinning everything that we do is our people. We attract and retain strong talent. Our people are given meaningful responsibility and the opportunity to build rewarding, long-term careers across our brands, functions, and geographies. The result is a shared talent base that allows us to place experienced leaders where they can have the greatest impact while giving our brands the benefit of deep institutional knowledge and fresh perspective. When I look across our teams, I see an amazing combination of homegrown talent and industry veterans.
Take Peter Perdue, our President of Popeyes U.S. and Canada, or Katerina Glyptis, who runs Tim Hortons in the U.S., for example. They both started their careers at RBI and have worked across our brands. Hope Bagozzi, Tim Canada's Chief Marketing Officer, and Joel Yashinsky, Burger King's CMO, who both have decades of marketing experience with the largest burger QSR player in the industry before they brought their expertise to RBI. We also develop leaders from within our own restaurants. Joe Hoffman's a great example. Joe started in Burger King in the back of house as a teenager and now oversees our Carrols' and Burger King company portfolios.
We have a strong track record of matching the right leader to the right brand at the right moment, like Axel, who grew up in his family's restaurant business and spent seven years in various roles at RBI before stepping in to lead Tim Hortons in late 2019. Axel has since helped drive one of the strongest and most consistent performance stretches ever in the brand's history. A key reason our talent development works is our deeply embedded ownership culture. Ownership for us is very intentional. It means accountability for outcomes, comfort-making decisions that may not pay off immediately, and an understanding that this is a business built on long-term partnerships. This is especially important in a franchise system like ours, where our franchisees are making multi-decade investments in their restaurants and in their communities, and trust and alignment truly matter.
That philosophy is reinforced through how we structure our incentives. Nearly 50% of our corporate RBI employees are equity holders, and senior leaders have meaningful personal stakes in the business. In total, our director-level employees and above own roughly $350 million of RBI stock, or $750 million when you account for unvested equity, which vests over three to four years. This creates an aligned long-term approach across the organization, and my nine direct reports and I each have the vast majority of our net worth invested in the company. This ensures decisions are made through the same lens our franchisees and shareholders use, with a focus on durable value creation over time. Our leaders here are all in, and the result is a talent flywheel. We attract leaders who act like owners. They develop the next generation, and that continuity strengthens our brands.
While my direct reports bring an average of more than 15 years of restaurant experience, what gives me the most confidence is the depth of talent behind them, many of whom are with us here in the room today. Alongside our commitment to talent is our commitment to our franchisees. We work with a high-quality group of franchise partners around the world who share our ambition and our ownership mindset, and we've been very intentional about building trust across the system, publishing our franchisees' profitability publicly and tying our compensation to their bottom line. While there will always be natural moments of friction, I believe alignment across our systems is stronger than it's ever been, and that alignment is critical and gives us confidence that we're moving forward together.
All of that sets the backdrop for the conversation we want to have today about our performance, progress, and what still needs to change. When we spoke at the New York Stock Exchange in 2024, I spent a lot of time emphasizing the fundamentals of this business: quality, service, and convenience. Delivering those basics consistently at scale is what drives traffic and unit economics across our brands. That belief hasn't changed, it's been an important lens for how we've navigated a challenging operating environment over the last two years. At that event, we laid out our long-term growth algorithm: 3%+ same-store sales and 5%+ net restaurant growth, translating to 8%+ organic adjusted operating income growth on average from 2024- 2028.
We're roughly halfway through the algorithm period, while the macro environment has been less favorable than we and others in the industry had hoped, we've still delivered consistent performance near the high end of our closest peers. We've grown same-store sales 2.5% on average with continued strength at Tim Hortons and our international business, and burger QSR industry outperformance at Burger King. On top of that, we've maintained strong cost discipline and delivered 8% organic adjusted operating income growth in each of the two years of our algorithm period. That said, we need to deliver this level of profit growth alongside stronger absolute top-line growth for us and our franchisees. There are parts of the algorithm, specifically net restaurant growth, that have required more work but are now greatly de-risked after deliberate actions that we took over the last year.
We're going to walk through those pieces today. We also know that beyond delivering 5% net restaurant growth, we need to simplify our business, provide a clear capital allocation framework, and demonstrate steady, predictable growth across all of our brands. As I mentioned before, our vision is that by 2028, RBI becomes a 99% franchise restaurant company, delivering consistent 5% plus net restaurant growth with strong and predictable earnings growth and attractive double-digit shareholder returns. Today, we're going to show you how we get there, starting with Burger King. While Burger King U.S. and Canada is only 18% of our operating profits, it's the largest focus of our investors. Beyond that, we also think that our approach to running Burger King is the best window into how we've evolved as a company and how much more operationally focused we've become.
Tom Curtis has been doing an amazing job leading Burger King for nearly five years and has been the driving force behind Reclaim the Flame. Tom is a great example of the deep restaurant talent that we have at RBI, starting his career as a franchisee for roughly 20 years and bringing decades of operating experience to his current role. With that, it's my pleasure to welcome Tom Curtis, President of Burger King the U.S. and Canada.
Under Tom Curtis's leadership, it's been a true partnership in every sense of the word.
We have a leadership team that truly cares about franchisee profitability and the success of the franchisees in the system.
I think what's really exciting about the brand right now is that the team, the vision, and the work they've done has created the foundational blocks we need to succeed. It was a very solid vision laid out four or five years ago, and it is giving us now some tremendous gains and thus a lot of excitement among the franchisees.
One of the things that's happened since Tom and his team have been here is we work more in operations, and we're continually in our relentless pursuit of better. This is an operations business. We need to operate our restaurants the best on the block.
What is coming out of Reclaim the Flame is positioning our brand in a way that's both value for our guests but also providing high-quality customization, and we're putting ourselves in a unique position relative to other brands.
The industry as a whole has had a difficult year, especially in 2025. We performed pretty well, and I think we are now really poised to have a breakout year and maybe several breakout years. It's an extremely exciting time to be part of the brand.
I believe in this brand so much. Obviously, this brand has been part of my whole life. I would love to see Burger King become the number one hamburger restaurant.
The potential in the Burger King brand is tremendous, with our Have It Your Way, our Flame Grilling, and the Whopper. When you put all that together and you ignite the brand and you ignite it with investments in our facilities and our people, now is the time. We can do this better than anybody.
Good morning, everybody. It's great to see you here today. I appreciate you taking the time to spend your day with us. I joined Burger King almost five years ago after a 35-year career at Domino's. During my time there, I had the privilege of participating in one of the most exciting turnarounds in the restaurant industry led by Patrick. Seeing what was possible when you do the right things, not the easy things, gave me confidence that the same kind of transformation was possible at Burger King. Burger King was a brand that I grew up loving. The Whopper was, and it still is, the absolute best burger in the business. Being given a crown was always special. Somewhere along the way, this brand lost its focus.
It's focused on what made it great in the first place: Flame Grilling, the Whopper, Have It Your Way, and those things were not being delivered with the consistency, care, and hospitality that our guests deserved. I also knew something else. The love for this brand had never disappeared. It was still there, just waiting to be reignited. That belief, combined with the team, the mindset, and a great group of franchisees and the willingness to invest, is what brought me here and what continues to motivate the work that we do every day. This morning, I'm excited to share what's changed over the last several years and why we believe this brand is on track to continue improving from here. I'll start by taking you back to the intent behind Reclaim the Flame. When I joined this brand, it was a business in need of a reset.
The cracks in the foundation had become evident coming out of the pandemic. Franchisee profitability had fallen to a trough of around $125,000 a year, which simply wasn't enough to support reinvestment and growth. Restaurant execution was inconsistent, and on top of that, the physical state of the restaurants lagged the category and, in many cases, was actively turning our guests away. To break this cycle, the team worked together with franchisees to develop a comprehensive turnaround plan, and Burger King committed to an investment of $700 million to support marketing, technology, and restaurant modernization. The plan, which we called Reclaim the Flame, was designed to deliver on our brand promise and included well-sequenced initiatives to address our most urgent needs: operations, franchisee quality, restaurant image, marketing, and unit economics.
First, operations, or the guest experience, is the foundation of any good restaurant system. To anybody that knows me, it's no surprise that operations is that first pillar. I've been working in restaurants for far longer than I've been working on restaurants, and I know that success and growth come from repeat business, not one-time business, and that is what operations is all about. Since 2021, we've worked deliberately to rebuild operations in partnership with our franchisees. We've been relentlessly focused on what we call repeatable precision. We've doubled the size of our field teams to support our restaurants. Our field teams have also implemented targeted standard operating visits with some of our bottom-performing restaurants. In 2025, these visits delivered notable uplifts in same-store sales and traffic, with both metrics outperforming the control group by 1.8 points and 1.3 points, respectively.
We also launched Royal Roundtables, an annual touchpoint with every restaurant general manager and franchisee to educate and energize teams to drive fundamental changes in their restaurants. The team just finished our fourth year of Royal Roundtables, and the energy was incredible, which I think comes through in this quick video.
It's setting the bar, and that means by wanting all the aspects to fall in place, let's give them hot food, let's give it to them fast, let's give them great customer service so we can get them in, get them out, and keep them happy.
It all starts with when we hire a team member, bringing them in, giving them a good orientation, giving them a good start. Being good examples ourselves when we interact with guests, of course, they're watching us so that they learn from us and they learn a good example from us.
I'm supporting my teams by being in the restaurants and asking them to make sure that they utilize all the tools and everything that they learn from the roundtable, seeing them actually offer the crowns and make sure that the team members are using You Rule and, most importantly, the food.
I was with our team at a roundtable a couple of weeks ago. It's a very energetic atmosphere. It provides us an opportunity to work together with them, send them back with that energy and that focus to deliver the experience that we're all looking to do.
Spend a lot of time on training our managers. Results of that show up each and every day. Investing in our frontline people, investing in our restaurant managers, investing in our ARLs, that's how you drive success. What we're looking for the brand to do is give us the tools, give us the direction, and the motivation to do this, and that's what I see happening.
Our first year of roundtable started with Whopper execution. It might sound simple, but if a Burger King restaurant can execute the Whopper correctly, it can do just about everything else right. As a result, Whopper product satisfaction is now over 87%, a nearly 10-point improvement from 2022 levels. We've also been standardizing our tech stack, improving consistency and uptime from 92% in 2022 to over 99% today, and we'll continue to enhance it by rolling out a singular point-of-sale system. More than half of our restaurants are already on this new system, and the rest are expected to be converted by the end of this year. Our network, our kiosk, and our menu board display systems are already the same across the country, and all of this helps with standardization, which makes it easier for team members to execute.
In addition, we're implementing AI-driven technology in our restaurants to make life easier for our team members and improve franchise profitability. I'll expand on that tool later on. Our commitment to operations is backed up by investment. As part of Reclaim the Flame, we invested $100 million, matched one-for-one with our franchisees, into what we called our Royal Reset Refresh program. Franchisees updated broilers, fryers, toasters, and other kitchen equipment. We provided assistance to install kiosks, computer hardware, and new signage. This refresh benefited over 5,300 restaurants. While none of that work garnered headlines, it improved the guest and team member experience in a meaningful way. Overall, I think you'd be very hard-pressed to find another major player in this industry who is as focused as we are on improving the guest experience. This operational work is paying off.
Across the system, overall satisfaction has improved across all key metrics, including taste, order accuracy, friendliness, and speed of service, and we're seeing this progress relative to our peers as well. According to Circana in 2020, Burger King ranked 10th out of 12 in overall satisfaction among top U.S. QSR brands, and by 2025, we had moved up to 6th. We also saw revisit intent move from fifth to third out of 12. That's meaningful improvement, and it didn't happen by accident. Our goal is to be consistently in the top quartile, and from my time at Domino's, I know that getting these metrics moving in the right direction is a sign of good things to come in the years ahead. Part of resetting expectations also meant taking a hard look at our franchisee base.
In 2021, we implemented our franchisee success system to gain a better understanding of franchisee and restaurant-level performance. We prioritized placing restaurants in the hands of great operators while moving underperforming restaurants and franchisees out of the system. Since 2022, over 1,000 restaurants have changed hands. Each of the new engaged local operators has driven improvements relative to the path those restaurants were on under prior ownership. We also redesigned our incentive programs to reward better operators by providing them with larger remodel incentives. This had the combined benefit of motivating all operators to improve on the guest experience and positioning our A operators to grow their portfolios. Guests don't know which franchisees own which restaurants.
To them, a Burger King is just a Burger King, and that means that every operator that we have has a responsibility to protect the brand, a sentiment you'll hear shared by our franchisees in this video.
As you look at the brand and look at the vision that the management team has laid out, I think that the number one is the hardest one, and it's also the one that will give you long-term the best results, and that is actually franchising.
We need to keep elevating our brand. That's not just moving top restaurants. That's moving the bottom restaurants up. That rising tide will lift all. As the operations get better each and every day, we'll continue to grow. The average unit of volumes will go up. The EBITDA will go up with it.
Where we live, within 120 miles of every restaurant we own. We like that close proximity so that we can be in those restaurants frequently, overseeing, encouraging the management teams, and then inspecting what the guest is experiencing and making sure they're getting the experience we want them to have. To have the best teams and thus the best operations, you've first got to have a really good franchisee who will then turn around and hire the best team, create the culture that puts the customer first and then puts their employees right there next to the customer, constantly wanting them to improve, wanting them to strive, to succeed, and someone that is genuinely interested in their best long-term future.
Not only do we want to make sure the restaurants are in the hands of the best franchisees, but when guests show up to these restaurants, the building should reflect the brand that we're advertising and make it easier for our team members to deliver on a great guest experience, and that's why modern image is equally as important in delivering on our brand promise. We knew that the system needed to move past outdated restaurants, but some unit volumes didn't support remodels without co-investment from Burger King. As part of Reclaim the Flame, we committed $450 million toward franchisees' costs of remodeling restaurants, and our franchisees responded with contractual commitments to accelerate the pace of those remodels.
We started this journey with less than 40% of our restaurants in modern image, and we're now closing in on 60%, and increasingly, those remodels are done in our Sizzle image. Sizzle, which we introduced to the system in October of 2023, offers fun and exciting seating options for the whole family and lights up at night to attract late-night traffic, and importantly, it improves operations with a simplified, more digital flow that's seamless for team members. Last year, over 35% of our remodels were done in this image, and looking forward, the vast majority will be Sizzle. That excitement for Sizzle is being driven by average unit volumes of roughly $2.2 million in year one, as well as the feedback that we're hearing from our teams and guests, which you'll hear in this short video.
I've been here working on 48 years, and of all the iterations I've seen of Burger King restaurants, I'm most excited about the Sizzle. The investment in the image portion of our business has given us a tremendous jolt in terms of return and energy and excitement from our teams. We're big believers in the Sizzle image. We've done a lot of them. We've done some remodels. We've done some scrapes, and generally speaking, our return has been really, really strong. Even when we thought that we were going to remodel a restaurant that was already performing at a high level, we've seen restaurants go $3 million range after performing a Sizzle remodel with them.
It's a 10-plus-year decision that you're making with remodeling, and it hits on a number of things. The first is the guest appreciates it, and you see that show up in increased traffic and ultimately sales. The second is for our team members. People want to work at a beautiful restaurant, and that shows up in acquiring talent. The third and most important thing, it improves the profitability of the restaurant, and if I can make one restaurant more profitable, I can reinvest those profits into the next store, and that starts to speed up the flywheel.
Everybody walks in just looking around awkwardly like, "Wow, they really nailed it with this new design.
They come in with a wow expression. It's just fun to sit in the dining room and watch them come in and look at it and how great it is.
Ooh, I love it. They did a good job. Beautiful inside. I love it.
It's real friendly and welcoming when you first come in. I like the kiosk up front where you can order the way you want to.
Our team members now feel that same energy, that they're working in an environment that is cool, modern, and they're engaged with what we're doing. They're part of a reawakening for the brand.
As we continue to see more of the system modernize, something important starts to happen, and it's tough to model. At first, remodels drive performance at the individual restaurant level, improving guest perception, smoothing operations, and lifting sales and profitability. As penetration increases across the system, guests stop associating Burger King with this and start associating it with this, and over time, that shift compounds, and it creates a system-wide halo effect, and we're not there yet, and we didn't expect to be, but we know we're getting much closer, and our Miami market is a great example of that.
We've been accelerating our pace of remodels the past three years, and we saw the market outperform the rest of the system in 2025 by over eight points on same-store sales, and that is our long-term vision: a Burger King system where guests look around and see modern, inviting restaurants as the norm, and where the physical restaurant itself becomes a competitive advantage. Now, everything that I've described so far—operations, franchising, modern image—it's about fortifying the foundation and enabling customer retention, and that's where marketing comes in. Our share of voice must allow us to effectively reach consumers, and the voice of the brand must effectively communicate a reason for them to visit.
To help increase our share of voice, Reclaim the Flame featured a $120 million ad fund investment by Burger King Corporate from late 2022 through 2024. This was coupled with a commitment from our franchisees to increase their ad fund contribution rate from 4%- 4.5% through at least 2026 if we reached $175,000 in average four-wall profitability by 2024. We did achieve that. Now there's a second target of $230,000 by the end of 2026 that would enable a continuation of the 4.5% rate for 2027 and 2028. We may fall short of that mark due to all-time beef costs. Our franchisees know that these headwinds are temporary and that this co-investment has contributed to four years of Burger QSR industry outperformance.
I'm happy to report to you today that our franchisees have overwhelmingly voted yes to continue the 4.5% ad fund contribution through at least 2027, and if we reach $230,000 by the end of 2027, that rate continues on again through 2028. After that important good news, I wanted to move on to our brand positioning. Our marketing is now anchored in a few core truths about Burger King. The Whopper is our hero. It's the best burger. It's differentiated because it's flame-grilled, and we see an opportunity to continue strengthening that position. "Have it your way" isn't just a slogan. It means guests have a choice and control in their restaurant experience, and that's the foundation of our You Rule positioning, and it's the framework that we'll continue to build on going forward.
We've been highlighting our best burgers through platforms like Million Dollar Whopper and Whopper by You, both of which were literally designed by guests and for guests. Over the last year, as guests reconnected with the brand through Whopper innovation like BBQ Brisket Whopper and, my favorite, the Crispy Onion Whopper, we saw an improvement in regular-price combo meal incidents, even as much of the industry remained very narrowly focused on value, and those are higher check, higher gross margin tickets for our franchisees and also remind guests why they love Burger King. Now, value is an important part of our messaging, and how you deliver value matters just as much as having it in the first place. Today, we feature consistent value that communicates quality and choice at an easily accessible price. I'm very happy with how our primary value platform, $5 Duos and $7 Trios, performed in 2025.
Through all of the competitor noise, we've been consistent with our messaging. We found price points that worked for our guests and, importantly, our franchisees as well, and we stuck with them. I'm confident that we have our value platforms right. Finally, every element of the Reclaim the Flame plan ladders back to healthier franchisee profitability. When franchisees earn strong returns, they reinvest back into their restaurants, operations improve, and the business grows in a sustainable way. From that $125,000 trough that I mentioned, franchisee profitability improved to approximately $205,000 in both 2023 and 2024.
Commodity costs and a tougher consumer environment, those are real headwinds in 2025 and resulted in a step back to around $185,000 a unit. When you look through the impact of unprecedented beef prices and the ad fund transfer, franchisee profitability actually grew last year. While those are real expenses for our franchisees, I just say this to highlight that the actions within our control, operations, marketing, remodels, franchising, they're working to expand franchisee profitability even in a challenging environment. Within this brand, there's significant upside as more restaurants climb the quality curve. In 2025, A Restaurants generated average sales of $1.9 million and roughly $245,000 in profitability, over 30% higher than the system average.
While this number is not where we want it to be long-term, that gap is proof of what's possible with strong execution, and it gives me confidence that the system has room to grow. The last area I want to circle back to is technology. There's a lot of discussion around AI in restaurants, and it's often focused on reducing labor. Here at Burger King, we see it differently. When I was a restaurant manager, much of my time was spent on very repetitive tasks: looking up standards, monitoring inventory, verifying temperatures. That work pulled me away from what was really important: leading the team, engaging with guests, being present in my community, technology and AI can solve all that. When managers and team members can focus more on leadership and customer interaction, growth follows.
I've seen firsthand that as technology improves the guest experience, team member efficiency improves as well. As traffic does increase, a more effective team can handle higher transaction counts without adding more labor. Those team members are just better. They have more capacity. That is the inspiration behind BK Assistant. It's the manager and the team member's assistant. It's their partner. It's their analyst. Our Chief Digital Officer, Thibault Roux, has been instrumental in bringing BK Assistant and Patty, who you'll meet in just a moment, to life by leveraging real-time data in our restaurants to improve the lives of our team members. To show you what that looks like in practice, I'll share this video.
Hi there.
Good morning, Patty. Looks like we had a great breakfast shift today. Is there anything that needs my immediate attention?
The team's friendliness scores this morning were the highest this week. We are running low on Diet Pepsi in the Freestyle machine.
Thank you, Patty. I'll take care of it right away.
Looks like the women's restroom needs cleaning.
That's very helpful, Patty. I'll get to it right away.
Hey, Patty. Can you remind me how to build your new Ultimate Steakhouse Whopper?
Of course. The Ultimate Steakhouse Whopper includes one 100% flame-grilled beef patty on a toasted sesame seed bun, three rings of creamy peppercorn aioli, two slices of Swiss cheese, three half slices of bacon, one scoop of mushrooms, and is topped with six onion rings.
Thanks, Patty.
Great job so far today, team. We're one order away from hitting our upsell goal.
Hi, welcome to Burger King. Where You Rule?
What can I get for you today?
Hi. Yes, I'd like a Whopper meal with large fries and a Coke, please.
Sounds good. I have one classic Whopper meal with a large fry and a large Coke. Would you like to add a cinnamon apple pie to that?
Yeah, I'd love that.
Upsell target reached.
Hey, Patty. I'm about to clean the shake machine.
Awesome. Would you like me to remove shakes from our digital channels until you are done cleaning?
Yes, thank you.
Shakes have been removed from our menu boards, third-party delivery, kiosks, and the BK app. I will add them back as soon as you are done cleaning the machine.
Thanks, Patty. While I have you, can you remind me of the procedures to clean the shake machine?
Of course.
Hi, Patty. We just sold our last cinnamon apple pie.
Thanks for letting me know. Would you like me to remove them from our menu until tomorrow's shipment arrives?
Yes, please.
Apple pies have been removed from our menu boards, third-party delivery, kiosks, and BK app. I will add them back as soon as tomorrow's shipment arrives.
Thank you, Patty.
Hey, Patty. Raul just called in sick for his shift tomorrow morning.
Sorry to hear Raul is sick. Looks like Maria is available for that shift.
Okay, thank you. I'll call her right now.
We are really excited about BK Assistant. I've got to tell you, Joe and I have spent about a total of 80 years in restaurants, and not much surprises us, but we're like a couple of giddy teenagers when we get to play with this thing. It's amazing. While it's only in about 500 restaurants today, it's going to be available to all 7,000 by the end of the year. As we look toward the future, there are four important opportunities that I'd like to highlight. First, and it won't surprise you, I continue to see growth opportunities from operational improvements between bringing highly motivated new franchisees into the system, continuing our focus on repeatable precision, and now this BK Assistant opening the door for everyone to give better customer service. I'm confident that you'll get even better, more consistent guest experience.
Second, we're continuing to execute on these quality remodels, and while our pace was modestly slower due to that franchisee P&L compression in 2025, we're starting to reach the point where it's benefiting our overall results. As we execute more and more Sizzles and modernize more restaurants, that halo effect is going to start to materialize, and that's exciting. Third is culinary. Now, this is not an area where you've heard us talk a lot about over the years, and we haven't placed significant emphasis on it, largely because we already have a strong, high-quality food foundation in place. Now that we're showing the necessary progress in those other foundational areas, we can turn to elevating our menu, and this year will be full of product news, and that news will start with the Whopper.
We're elevating our flagship burger with a rollout of new glazed buns, a creamier mayo, and clamshell packaging designed to enhance both the eating experience and the premium feel of the Whopper. You can expect additional product quality improvements over the coming quarters led by our new head chef, Amy Alarcon, who brings nearly two decades of experience leading culinary innovation at Popeyes. Finally, we see a real opportunity to win with kids and families, which represent nearly 20% of QSR traffic but only 10% of Burger King's. Now, this hasn't always been the case. 20 years ago, we had a large, vibrant kids' business, and over the past few years, we've been intentional about regaining that.
In addition to improving the guest experience and our restaurant image, we've leaned into family-friendly partnerships like Spider-Verse, Addams Family, How to Train Your Dragon, and most recently, SpongeBob, paired with real menu innovation designed for families to make every visit feel special. You can expect to see more family-friendly IP partnerships done the Burger King way in the years ahead. What's important here is that these partnerships, when executed well, drive durable behavior change. King Jr. meal incidence is now at its highest level in over a decade, and we're earning repeat visits from families who are rediscovering the brand during these windows. In fact, over 35% of guests who visited during our last three IP partnerships returned to Burger King within 30 days. A great proof point for that, despite the severe weather in January, Burger King's underlying trends have improved following our SpongeBob collaboration in December.
This opportunity for family and kids is significant. As this chart shows, even modest progress in reclaiming our share can put meaningful wind in our sales. Given the size of the family occasion, that emotional connection that it creates, and the lifetime value of those guests, this is something we believe can be very big for Burger King over time. The most important point that I want to leave you with is that while I'm very proud of the foundational progress that we've made over the past four years, we are certainly not done. Much like our franchisees, we think like owners, and owners are never done. The work we've put in thus far was about building a foundation that allows us to play offense going forward.
Across every part of our business, we've built real momentum with meaningful growth levers still ahead of us, and I hope that we've given you a clear perspective today on what's changed at Burger King and why we're very confident in where we're headed. Altogether, we are investing over $700 million to strengthen the Burger King U.S. system, and our franchisees have stepped up beside us and are committing over $1.5 billion of incremental capital toward remodels, kitchen equipment, technology, and marketing. This goes back to a point that Josh made a little bit earlier. RBI is deeply committed to its brands, and it's clear to me that while RBI still possesses the incredible financial discipline and firepower that defined its early years, that's now balanced with deep restaurant experience, long tenure, and strong operating instincts. That combination has driven meaningful fundamental change over time.
It's hard to look at the data and not recognize that this is a fundamentally different business than it was four years ago and that this plan is working. There's still plenty of work to do, but that's what makes the team and I excited every single day. We've already seen some great results, and relative to others in the space, we still have a lot of levers to pull to continue driving out performance. With that, I'll pass it back to Josh. Thank you.
All right. Thanks, Tom. Can we get one more round of applause for the amazing work Tom and team are doing? I'm most hopeful that by next time we get together, Thibault can help me out, and maybe Patty can just do this presentation for me. We'll see. We've got some time. All right. I now want to change gears a little bit and focus on net restaurant growth, which expands the reach of our brands to new guests around the world and is a clear indicator of franchisee confidence and returns. Two years ago, we said that RBI should be able to deliver 5%+ net restaurant growth on average. Since then, the trend has clearly not been favorable, it's easily explainable. Our results were negatively impacted by softness in a few select markets, most notably in Burger King China.
In fact, when you look at the numbers outside of Burger King China, our net restaurant growth has averaged 4% over the last five years, underscoring the strength and consistency of our core development engine. That said, we know that the consolidated number matters, and getting back to 5% plus NRG is important. Today, I'll walk you through the building blocks that will get us there. At a high level, it's fairly simple. By the end of our algorithm period, or 2028, 5% plus net restaurant growth equates to roughly 1,800 net restaurants per year, coming from three main building blocks. First, 300-400 from our businesses in the U.S. and Canada, second, 300-400 from our three brands in China, and third, 1,100 from international, including about 700 from our top 10 growth markets and 400 from the balance of the portfolio.
Together, that gets us to roughly 1,800 net new restaurants per year, or 5%+ net restaurant growth by 2028. That's the framework. Now let me walk you through why we believe each of these building blocks is repeatable and increasingly de-risked. We'll start with the U.S. and Canada. We expect 300-400 net new restaurants per year, compared to roughly 90 on average from 2023-2025, or just north of 200, assuming Burger King was neutral during that time. Within that, Firehouse Subs will serve as the primary driver, delivering about half of our net new units. Burger King should gradually return to a neutral position, and Tim Hortons and Popeyes will drive the remainder of growth in the U.S. and Canada. We have high visibility into this pipeline.
Starting with Firehouse Subs, Mike and the team achieved an important milestone in 2025, surpassing 100 net new restaurants in the U.S. and Canada. We've increased the pace by more than five times versus pre-acquisition levels. With less than four-year paybacks, a strong franchising team, and growing brand awareness, we see a clear path for Firehouse to open between 150 and 200 net new units per year by 2028. Shifting now to Tim Hortons. After a return to positive net unit growth in 2025, Tim Hortons is expected to continue accelerating in under-penetrated regions like Western Canada and Quebec, as well as dense markets like the Atlantic region, where franchisees are opening restaurants to keep up with demand. This growth is further supported by very attractive paybacks, which are less than three years on average in Canada. In the U.S.
Market, Katerina and her team are introducing Tims to new markets like Virginia, Florida, Delaware, and Tennessee, while building further density in our existing markets like New York, Michigan, New Jersey, and Texas. Tim Hortons in the U.S. recently achieved its highest level of gross openings since 2014, and we anticipate further acceleration from here. Meanwhile, the Burger King U.S. portfolio cleanup is largely behind us, giving us confidence that we'll be able to return to net neutral growth. While Popeyes has slowed development, Peter and his team are laying the operational groundwork needed to position the brand to accelerate sustainably once ready. This deliberate sequencing is the primary reason we introduced a lower bound to our combined U.S. and Canada net restaurant growth outlook.
Taken together, while 300-400 net new restaurants represents a step up from today, given our level of influence in home markets, including our own capital investments, we're confident that it's achievable. The second bucket of growth is in China, which has historically been the largest swing factor in our global net restaurant growth. We entered our first master franchise agreement in China with Burger King in 2012, and from there, we scaled the business from around 50 units to over 1,000 restaurants, adding nearly 300 net new units in 2019 alone. However, the business struggled during and after the pandemic. Given its importance, we temporarily took control in February 2025, and over the following nine months, we built an exceptional local leadership team, reignited marketing, optimized the restaurant portfolio, and drove 10% same-store sales in the back half of 2025.
From the start, we believed the right solution would be to partner with a well-capitalized, ambitious local operator. In November, we announced a joint venture agreement with CPE, a leading Chinese investment firm with a strong track record of scaling consumer brands in China. Post-closing, CPE invested $350 million of primary capital on day one, becoming the majority shareholder with an 83% stake in the business. Importantly, CPE committed to doubling Burger King China's footprint to 2,500 restaurants in the next five years. No one's better positioned to explain the path forward than Johnson Huang, our Chairman of Burger King China, who spent years leading KFC in China, and Mark Mao, managing director of CPE. I'll turn it over to them.
他是 Mark Mao。我是 Johnson Huang。非常欢迎来到 Burger King China 的餐厅。这个是我们 Burger King China 总部下面的餐厅。我们也很高兴能够加入 RBI 的 Family。
Hello. I'm Mark, Managing Director at CPE. CPE is a leading asset management firm with over $20 billion in AUM and one of the most active investors in Greater China. I'm passionate about identifying and building businesses that deliver great consumer experiences in China.
Hello. I'm Johnson. I'm operating partner at CPE and the chairman of Burger King China. Before joining CPE, I also led a large-scale restaurant brand in China. This taught me that success in China requires not only strong brands but also a deep understanding of local taste, value expectations, service standards, and emotional connection with consumers. That perspective strongly shapes how we will approach Burger King China going forward.
CPE was attracted by three things. First, Burger King is a truly iconic global brand with a clear product signature: the flame-grilled Whopper. Second, Burger King China already has a solid operational foundation and a nationwide footprint. Third, we saw significant upside from combining this strong brand with CPE's local expertise and long-term capital. We invested $350 million in free cash in Burger King China. We are super confident about that. This cash gives us the firepower and the flexibility we need for the next big push.
Consumers strongly recognize the brand, especially for its beef product, and many already see Burger King as the best burger. Our focus is to protect that core advantage and loyalty while making the brand more accessible, engaging, and emotionally connected with a broader consumer base. This year will be a fundamental year for Burger King China. Our focus will be on strengthening the core capabilities that support sustainable expansion. This means combining signature products with local taste, refreshing our marketing with clear brand messaging. We will refine store formats to improve customer experience, enhance store efficiency, shorten payback periods, and fit different city tiers and trade zones across China.
We are opening up our ecosystem to create something really powerful. Like we are working with real estate and tourism partners to snag the best locations, we are also strengthening local supply chains and enhancing digital and omnichannel capabilities. Putting it all together, we are building stronger brand power, running things more efficiently, and driving sustainable long-term growth.
Our ambition is to make Burger King China the brand's largest global market and a definite leader in China's QSR industry, not only by store count but also by customer satisfaction and experiences. We expect NRG to exceed 200 restaurants annually by 2028. Beyond that, with a strong store economic model and a scalable platform, we believe the brand, market, and business can support further acceleration in NRG, reaching over 4,000 stores by 2035.
BKC has the potential to grow several times over. The market's just too huge, and the growth potential is insane. That's what gets me really excited.
Great. Well, thanks to Johnson and Mark for that. As you heard, we now expect Burger King China to open over 200 net new restaurants per year by 2028, with continued acceleration thereafter. When you layer in Popeyes and Tim Hortons in China, we expect an additional 100-200 net new restaurants per year combined by 2028. Both businesses are earlier in their development curves and require capital for sustainable growth, so we expect a bit more variability year to year versus a more mature system, which is why we've been conservative in the ranges that we're giving. Taken together, China should contribute 300-400 net new restaurants per year, with the high end of this range slightly ahead of our prior guidance of 300.
We believe CPE's ownership and involvement in Burger King meaningfully de-risk the market and view Popeyes and Tim Hortons as providing incremental upside over time as we prove out the unit economics. Brings us to the rest of international, which should deliver roughly 1,100 net new restaurants per year. International is a real source of strength for us and, as I mentioned earlier, one that we view as underappreciated by the market. Since 2013, we've built five international businesses with more than $1 billion in system-wide sales each and one Burger King France with over $2 billion. We've grown these businesses by partnering with local operators who share our long-term vision for the brands and bring a true ownership mindset to execution. Burger King France is a perfect example.
We entered the market in 2013 through a master franchise joint venture with Groupe Bertrand, led by local entrepreneur Olivier Bertrand. Through strong execution and beautiful, well-located restaurants and a deep understanding of the local market, Olivier and his team grew Burger King France into a $2.3 billion system-wide sales business with over 600 restaurants in 2025. I could spend a lot of time highlighting the strength of this business and its team, but it's more compelling to hear directly from Olivier himself along with Alexandre Simon, CEO of Burger King France, who joined the company in 2028. Take it away, guys.
[Foreign language]Je suis Olivier Bertrand, président fondateur du Groupe Bertrand. J'ai toujours eu une forte affinité avec le secteur de la restauration rapide, ayant commencé ma carrière comme équipier en QSR. Je considère cette industrie à la fois dynamique et profondément ancrée dans le quotidien des consommateurs, avec une vision à très long terme.
I'm Alexandre Simon, CEO of Burger King France. Prior to joining Burger King, I spent nearly 20 years in the quick-service restaurant industry, working with leading international brands.
Le succès commence par l'ambition. Se fixer des objectifs élevés et bâtir une culture entièrement tournée vers la croissance.
When I joined Burger King, we operated 200 restaurants and generated around EUR 500 million in revenue. Today, only a few years later, we run more than 600 restaurants and exceed EUR 2 billion in revenue.
[Foreign language]La marque conservait une aura exceptionnelle. Nous avancions notre rythme à plus de 50 ouvertures par an pour BK.
Today, with an average sales per restaurant of EUR 3.6 million and almost 700 restaurants at the end of 2026, we have every reason to be confident.
[Foreign language]Je dirais que notre prochaine étape est d'atteindre les 1,000 restaurants en France. Ce que j'ai cherché à cultiver au sein de mon groupe, c'est une compréhension fine de la culture locale, des attentes des consommateurs, combinée à un fort esprit entrepreneurial. Nous venons du métier de restaurateur et, dans notre secteur, nous savons que le succès durable commence par une véritable expérience client et de l'innovation, ce qui permet une top-line élevée ainsi que la croissance du chiffre d'affaires. C'est cela qui nous permet d'absorber les coûts fixes, d'optimiser nos principaux ratios et, in fine, de financer nos ambitions.
We also benefit from a highly committed network of sub-franchises operators in the field delivering exceptional operational execution. There are clearly three major areas of opportunities and growth for the coming years. The first is restaurant development and expansion. We see a strong potential to increase our development pace to up to 60+ openings per year. The second opportunity lies in technology. On the customer side, AI solutions will enhance the customer journey, making it more seamless and intuitive while unlocking additional revenue opportunities. In our kitchens, technology will simplify team workflows and improve productivity. The third growth driver is marketing. Consumers value, I think, three key strengths of our brand. First, our product with generous portions and the distinctive flame-grilled taste that defines a BK burger.
Second, our constant ability to innovate, from baby burgers and tenders with XXL dipping sauce to early leadership in veggie or the launch of gourmet burgers back in 2020. Third, our bold and highly engaging communication. Today, Burger King is clearly perceived as one of the most innovative and fun brands in France.
[Foreign language]La combinaison de la puissance de cette marque au niveau global et de notre capacité à innover, développer et adapter la marque localement afin de répondre aux attentes des consommateurs français crée un modèle à la fois unique et extrêmement performant. Cette relation étroite avec le leadership de RBI a été un facteur essentiel du succès de Burger King en France.
I believe the French market has always wanted a strong challenger to the category leader. Today, I think that that challenger is clearly Burger King. The ambition is clear to become the preferred brand of the French citizen in the restaurant industry.
Awesome. Hope[ you enjoyed that. Alex and Olivier are truly special partners, and we're tremendously lucky to have them. France is an incredible market, but what's just as exciting to me is that our international success isn't concentrated in just one or two markets. Our 10 largest international businesses account for less than 60% of total international system-wide sales, which speaks to the breadth and diversification of our portfolio. That matters because we're not just growing units to drive a headline net restaurant growth figure. We're expanding in attractive markets with great average unit volumes that contribute meaningfully to system-wide sales and deliver strong flow-through to adjusted operating income. Our international restaurants generate average unit volumes of $1.3 million compared to a global average of $1.4 million. As a result, as we add units, we'd expect only modest dilution between NRG and system-wide sales growth.
In fact, when you look on a consolidated basis in the last three years, we've seen zero drag from same-store sales plus net restaurant growth to system-wide sales growth. This is a key differentiator of our growth model versus others in the industry. Importantly, our growth is being fueled by healthy franchisees who are seeing attractive returns and reinvesting in their businesses. Since 2020, nearly $2 billion of primary capital has been injected into 13 of our largest and fastest-growing international businesses. Burger King India is a great example. Since joining in late 2013, CEO Rajeev Varman, who was actually previously one of our top-performing general managers across North America and the U.K. before he became a franchisee, has grown the business from zero restaurants at the start of 2014 to nearly 600 today, establishing Burger King as a leading brand in India's fast-growing QSR market.
The business has delivered five consecutive years of positive same-store sales and increased net restaurant growth to nearly 70 net new units in both 2024 and 2025. Earlier this year, Restaurant Brands Asia, the parent of BK India, announced plans for up to $165 million of new primary capital from the Agrawal family, the new controlling shareholder. With this capital, the team is well-positioned to further accelerate development in the years ahead. Let's hear from Raj.
I've been in this industry totally 32 years, and about 27 of those I've been with Burger King itself. When RBI took over the business, then the real global growth or growth in the APAC region really started. This gave a beautiful opportunity for me to do something very different than just run an existing market, but to start a new market, especially in a country which does not sell beef. To build a vegetarian menu, to build a chicken-based menu from scratch was really exciting. What I love about this business is really two things. One is Burger King is a great brand, and it's a great global brand. It's a brand which, when I came into India, had 17% awareness. Today, after 12 years of running this brand, we are at 98% awareness.
The second thing that I really love about doing this business is it's scalable. The more you grow, the bigger you become, the more profits you generate at a company level. I always say this with my team, which I believe very deeply in today, is we are just getting started. The opportunity to take a great brand and actually make it a strong business is so exciting here in India because there's so much white space. Today, in India, the infrastructure is building up rapidly. New roadways are coming up, rest stops are coming up, new train stations which were very traditional now coming up with food courts in them. Airports are expanding every year. There's 15- 20 malls built every year. All this opportunity that's coming in year after year, I mean, that opportunity is so big.
We are starting on a journey to build 80-90 restaurants, maybe even 100 restaurants a year for the next 10 years. We will probably be close to 700 by the end of this year. If you look at the next three to five years, we should reach 1,000 restaurants. Beyond that, the scale is to go beyond 3,000 restaurants in this country. That's my journey for the next 10 years, is to continue to build the digital platform, continue to get closer to the customers and build that connection, which should be very close and, as we say, known customers. Second is to take a leadership role in this country with the brand in the QSR space. Third is to build a very, very strong workforce.
I've always believed that if we can create pride in our people in the restaurant, to get them to feel proud about working at Burger King, then the success of their operations is doubled overnight. We just want to take it to another level. I think that's where the focus will be as we move into the next 10 years.
Amazing. I'm sure you can all tell how amazing of an operator that Raj Varman is. If you were looking on the shelf behind them, you probably noticed his trophy collection. That's because last year, he actually won Developer of the Year and Franchisee of the Year for his incredible work in India. Burger King France and Burger King India are great representations of how our international growth business works: strong operators, local expertise, well-capitalized, with a clear line of sight to continued development. With that context, let me discuss our path to 1,100 net new international restaurants in 2028. We expect our top 10 growth markets to provide a solid base of 700 net new restaurants annually, compared to about 600 on average from 2023- 2025. These markets, including India, the U.K., Mexico, France, and Japan, are diversified across Europe, Asia, and Latin America.
Growth in these markets is being driven by strong unit economics with an average payback of four and a half years. Importantly, we are not even close to full penetration in these markets, which gives me confidence that we have ample runway to continue growing for a long time. These top 10 international growth markets only represent a small portion of our overall footprint. The rest of our international portfolio, which is around 175 brand-market combinations, should deliver the remaining 400 net new international restaurants per year. For perspective, this group contributed around 350 NRG on average from 2022- 2024. While 2025 represented a step back to just over 200, this was largely due to geopolitical disruptions that impacted some markets in the Middle East and Southeast Asia, the impact of which we believe is now behind us.
As pressures ease and we enter new markets with Popeyes and Firehouse, we're confident in our ability to reaccelerate growth to 400. Putting it all together, we have between 300 and 400 net new restaurants from the U.S. and Canada, and 700 from our top 10 international growth markets. This is lower-risk, repeatable growth supported by strong operators, attractive economics, and established development pipelines. When you add 300- 400 net new restaurants from China, the midpoint represents about 1,400 net new restaurants annually, or more than 4% unit growth, from just 13 markets where we have more visibility. From there, an additional 400 net new restaurants come from the rest of international and bring us to 1,800 net new restaurants per year, or 5%+ net restaurant growth by 2028. I can easily point to upside in each area, particularly in countries like India, Japan, and China.
If something arises in one of the markets, I'm confident we'll be able to overachieve in another. Importantly, our growth is coming from a wide variety of businesses all around the world. By addressing the situation in Burger King China, we've now removed the largest historical source of net restaurant growth volatility. All of this is supported by healthy development pipelines and strong franchisee alignment, which gives us confidence that this level of growth is not only achievable but sustainable. That's the framework. That's why we believe that the path back to consistent 5% plus net restaurant growth by 2028 is now clear. With that, we're going to take a break. We've got our beautiful Tim Hortons Bakery Showcase and some new beverages next door for everybody to try. We'll start back here at 10:30 with an update from Sami. Thank you all very much.
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All right. Let me break. Good morning, everyone. Good morning. I can see we're all hopped up on coffee. I hope everyone enjoyed the delicious Tim's products. Please save room because we have tons of food to come at lunch later on today. Just quickly on agenda, for the rest of the day, I'm going to provide a financial update. Patrick will join us to give us his thoughts on the plan. Lastly, our brand presidents will take the stage for a panel and live Q&A.
It'll be great to hear directly from our brand leaders on the exciting paths ahead for their respective businesses. I've personally had the pleasure of sitting in some of their seats over my 13 years at RBI, working on four of our five business units all around the world, from Miami to Toronto to Singapore. Collectively, as a leadership team, a few years ago, we stepped back and made some difficult but needed choices, short-term trade-offs to drive long-term results. We chose to acquire and operate restaurants, to invest in early-stage international businesses, and to put a record amount of capital behind Burger King's Reclaim the Flame plan. We made those decisions for the benefits of our brands and our franchisees. They required capital and added DNA and complexity. We firmly believe they were the right things to do.
Now that those investments are starting to take shape, our focus now shifts towards simplifying. That's what I'd like to discuss today. There are three things that you need to believe in. One, that we can deliver consistent earnings growth. Two, that those earnings clearly translate into steady and growing free cash flow. Third, that we allocate capital in a way that creates the most long-term value for our shareholders. With that framework, let me be more specific. We expect to continue growing organic AOI at roughly 8% on average through 2028, return to a roughly 99% franchise business, and sunset the Restaurant Holdings segment by 2027, and achieve corporate investment-grade leverage by 2028. This will drive greater earnings predictability and sustainable free cash flow generation, which allows us to return increasing amounts of capital to shareholders through both the growing dividend and share repurchases.
Let me start with the most important point. Our algorithm has not changed. We continue to believe that the system can deliver 3% plus same-store sales on average from 2024- 2028, and return to 5% plus net restaurant growth by the end of the outlook period. That combination supports 8% plus organic AOI growth on average over the algorithm period. We've delivered that level of organic AOI growth over our first two years of the period, even though net restaurant growth hasn't been exactly where we want it yet. I think it's worth spending a moment on what drove AOI growth in 2024 and 2025 because there has been some noise in the numbers. Over that period, AOI benefited from solid underlying fundamentals, including healthy same-store sales outperformance across our largest businesses, as well as continued cost discipline.
Layered on top of that were a handful of one-time items, including ad fund dynamics, bad debt movements, and the impact of Burger King China as we worked through the ownership transition there. Some of those benefited us, and some created short-term headwinds. Overall, we were able to drive over 8% organic AOI growth over the first two years of our algorithm period. As we look ahead, that noise, it largely clears. There are three core structural drivers that will support our ability to continue delivering the AOI algorithm. The first is ramping to 5% plus NRG. The second is a structural tailwind in our royalty rate. The third is discipline cost management. On the first, before the break, Josh walked you through our building blocks to 5% net restaurant growth by 2028, which translates to roughly 1,800 net new restaurants annually.
While we internally manage the business on absolute net new units, another way to look at that is how do you bridge from the roughly 3% net restaurant growth today to 5%+ in the target. That gap is roughly 200 basis points. When you break down those 200 basis points, they come from a few very clear buckets. The biggest is Burger King China. We've made a lot of progress here, and it will pivot from roughly a 70 basis point headwind in 2025 to a 60 basis point tailwind by 2028. That 130 basis point swing, it's already pre-funded by CPE, which gives us confidence in the development ramp consistent with the growth plan that Johnson and Mark outlined earlier in their video. The remaining 70 basis points will be split across two main drivers, Popeyes International and Firehouse North America.
Both of these platforms have tangible momentum and a clear line of sight to incremental unit growth. Popeyes' International continues to expand and take share in under-penetrated markets, supported by our existing international partner networks and strong demand from our guests. I can't think of any other international businesses of such scale that are consistently compounding system-wide sales at nearly 40%. This is just the beginning. Meanwhile, Firehouse is hitting its stride in North America with sub-four-year paybacks and a robust development engine in place. You've already seen the pace of development of Firehouse almost 5x in the past few years, we expect more acceleration in the years to come. Beyond those drivers, there will, of course, be puts and takes, which is the reality for a business of our scale.
In any given year, we're opening restaurants in over 70 different countries all around the world, which to me just highlights the strength and diversity of our global pipelines. As those numbers accelerate over time, we'll see this flow through nicely to system-wide sales and to ultimately AOI growth. The second dynamic that's worth highlighting is our effective royalty rate expands modestly over time due to mixed shift towards higher growth business units like International and Firehouse, as well as higher contractual royalty rate step-ups in many of our international markets. Burger King China is a prime example of this. We told you on our last earnings call that we will resume collection of royalties in 2026, which is a modest tailwind to our 2026 AOI growth.
Royalties will start a couple of points below our standard 5% international rate for Burger King with a contractual ramp to the full rate over time. That creates a built-in tailwind to AOI as the business scales in China. On a global basis, we expect our blended royalty rate to expand by one to two basis points per year through at least 2028, largely driven by this dynamic in international. On nearly $50 billion of system-wide sales with nearly 100% flow-through, that's a really nice tailwind to AOI. The third driver I want to talk about regarding AOI growth is discipline cost management and G&A leverage. We often hear that we have a reputation for being cost cutters. As you can see here, the numbers tell a far different story.
Since before 2020, we've grown segment G&A by around 50%, adjusting for Firehouse, peaking at around $650 million in 2023, up from $400 million just a few years before that. We made deliberate investments across RBI, particularly in field support and other franchisee-facing functions to strengthen the foundation of our business and our operations. More recently, since I've been CFO, we've right-sized our segment G&A a bit, with all of the step-down coming from corporate and back-office functions. Meanwhile, our brands have actually held steady to ensure that we continue to provide comprehensive support for our franchisees and for our restaurants. As we sit here today, I'm confident that our brands are at the right level of G&A to support our strategy and to deliver against our growth ambitions.
Looking forward, you should expect segment G&A to grow roughly in line with inflation or at about 2% annually, while system-wide sales will grow meaningfully faster. This will create operating leverage. As a rule of thumb, approximately 2% annual segment G&A growth will drive approximately 1 point of AOI growth leverage. Taken together, these three factors, increasing system-wide sales from a ramp-up in unit growth, a modest increase in our overall effective royalty rate, and G&A leverage support our outlook for roughly 8% organic AOI growth on average through 2028. It sets the stage for the simplification actions I'm going to walk through next. On to simplification. Let me turn to Restaurant Holdings.
While organic AOI growth, our framework actually excludes Restaurant Holdings, the segment is less than 2% of our reported AOI and adjusted EPS, we recognize it's added some complexity to your models, it's important to be clear about how we think about it. Restaurant Holdings was created intentionally. It allowed us to step in where needed, acquiring Carrols to accelerate franchising efforts and modernization at Burger King, to scale early-stage international businesses like Popeyes China and Firehouse Subs Brazil. As we look ahead, Restaurant Holdings is not a permanent part of the model, it was never intended to be. Our long-term objective is to operate a 99% franchise business with a small intentional base of home-market company restaurants. To sunset RH, we're actively working on two things. First, we're working to place Popeyes China and Firehouse Subs Brazil in the hands of long-term local partners.
Second, we plan to refranchise the Burger King company restaurant portfolio down to its steady-state level of roughly 300 restaurants from around 1,100 today. We expect to accomplish both of these objectives by the end of 2027, at which point the Restaurant Holdings segment can wind down. Of course, refranchising transactions are not linear. We may ultimately sunset RH with up to 500 remaining Burger King U.S. company restaurants, still with the long-term goal of reaching a steady state of 300. As a reminder, when we acquired Carrols back in May of 2024, we said refranchising would play out in years three through seven following the acquisition, or in other words, from 2026- 2030. Last year, we accelerated the plan, refranchising the first group of restaurants ahead of schedule.
The team has already built a strong pipeline for 2026, giving us confidence that we're on the path to reach our steady-state company restaurant target ahead of schedule. We'd expect 2026 refranchisings to be back-half-weighted and to accelerate into 2027. From a modeling perspective, there are a couple of important points to note. First, we expect a few pennies of EPS dilution per year from refranchising Burger King restaurants over the next two years as earnings shift from company-operated AOI to a more traditional royalty-based stream. Once Restaurant Holdings winds down, the remaining Burger King company-operated restaurants will roll into the BK segment like our existing company-operated restaurants do today. At that point, if there are additional restaurants remaining to refranchise, those will happen in the normal course of business.
Second, once we find new partners for Popeyes China and Firehouse Brazil, we will start to see a nice tailwind to AOI and to EPS as startup cost transition from the RH P&L over to the new operator. I'd also want to take a moment to emphasize the why behind this whole process. Refranchising, whether at Carrols or in China, is first and foremost about putting restaurants into the hands of the right operators, owners who live in their markets, who run great restaurants, and who reinvest in their people and their businesses. That's the number one priority. To bring that to life, we thought it would be helpful to hear directly from a few franchisees who are stepping in and taking on more restaurants. Let's roll the video.
My company, Rackson, acquired 30 restaurants a year ago. It was about a 50% increase in store count. It was the right time for me because after a number of years of challenges with the brand, I felt that all the right steps were in place. What I think is even more exciting are the next generation of franchisees that are going to come in with energy, new ideas, and new ways of making sure we deliver on the great brand promise. As I speak to prospective franchisees who want to join the brand, I say now is the best time. The brand is on the brink of transformation.
I'm working with some new potential franchisees on training and culture in their restaurants to help them succeed. When they succeed, the brand succeeds. You have to be operations-focused. It's not a passive investment. This type of investment is about leading people and creating a culture for others to succeed.
Before becoming a BKC or Burger King franchisee, I was here with Burger King Corporate. I decided to do this transition of becoming a franchisee because as I was responsible for attracting new franchisees to come to the BK system and help existing franchisees to grow, I saw potential that this brand hands when they are in the hands of the right franchisees. I was always so inspired to see portfolios that were struggling that once they were in the hands of the right franchisees, how they became like a rocket ship. The more that I was attracting these local owner-operators, I really envisioned myself doing that, and that became my dream. I became an operator. I have two amazing partners. I have Willie, who was a vice president of operations for Burger King Corporate as well, and my wife, Marcela.
We aspire to be an amazing Burger King experience and a leading brand.
It's amazing. It's amazing to see a dude up there who some of you may have met over the years and used to be part of our corporate team here as a leader. Hopefully that video paints a bit of a picture of the excitement that there is right now in the Burger King system. Stepping back, we recognize that we've added more layers to the business in recent years. That was intentional and necessary to strengthen the foundation and best position RBI for long-term growth. I believe 2025 was the most complex year. From here, the model steadily simplifies. We've addressed Burger King China. We're actively refranchising Burger King U.S. restaurants. By year-end 2027, you should be able to delete the Restaurant Holdings tab from your models.
As that happens, the translation from sales growth to AOI to free cash flow becomes more predictable and more durable. I guess spreadsheet jokes kind of get the audience going, huh? Now, we've talked through our vision for a more steady-state P&L. The natural question is, what do we do with the significant free cash flow that our business generates? We generated approximately $1.6 billion of free cash flow in 2025. As we look ahead, we expect free cash flow to grow meaningfully driven by three core dynamics. First, continued delivery of 8%+ AOI growth. Second, the scale-down of Reclaim the Flame remodel investments. Third, declining capital demands over time as refranchisings accelerate and RH eventually winds down. This visibility has naturally caused us to refine our approach to capital allocation. Our first capital allocation priority will always be investing in our brands.
Over the last several years, capital spending has been elevated as we made deliberate investments behind our brands. Today, we're modestly revising our long-term CapEx outlook down to reflect a more efficient, highly franchised model. We now expect total CapEx, tenant inducements, and incentives, what we refer to as CapEx and cash inducements, to be around $400 million for 2026 and 2027. We expect this to step down and settle around $300 million from 2028 on as RH goes away. This should generate a nice tailwind to our free cash flow growth. When we break down that run rate $300 million of CapEx, roughly half or $150 million will be allocated to Tim Hortons development and renovations as we continue to accelerate the business there. The remaining $150 million is split fairly evenly across three buckets. First, company restaurant remodels and repairs and maintenance across our U.S. businesses.
Second, general corporate spend in technology, facilities, and in our supply chain business. Third, we are earmarking $50 million for other investments as they may arise. In 2028 and 2029, given the slightly longer-than-expected timeline for reaching our Burger King modern image goals, we anticipate the majority of this $50 million to be deployed against our existing Reclaim the Flame commitments. To be clear, the total quantum of $700 million committed to Reclaim the Flame, that's not changing. We ultimately believe $300 million of annual run rate CapEx and cash inducements, it's a healthy level of investment to support our brands over the long term. Our second capital allocation priority is maintaining a healthy and growing dividend. Returning capital to shareholders through the dividend has been a core part of RBI's value proposition for a long time, and that is not changing.
We've now delivered 52 consecutive quarters of year-over-year dividend growth, and we are committed to maintaining that trajectory. Our previous long-term guidance was for a 50%-60% dividend payout ratio. We finished 2025 slightly above that range at 67%. Looking ahead, we're committed to a durable dividend with a payout ratio moving to around 60%. Our third capital allocation priority is to continue supporting our strong balance sheet, which we view as a strategic asset. Over the past several years, our capital allocation strategy has been guided by a focus on maintaining balance sheet flexibility as we navigated a period of elevated complexity. During this period, we prioritized deleveraging, closing 2025 at 4.2x net leverage. We've taken deliberate steps to further strengthen our balance sheet, extending maturities, accessing capital at very attractive rates, and maintaining strong liquidity.
As we've previously discussed, once leverage reached the low 4x range, we plan to reassess the needs of the business and refine our longer-term leverage expectations. Having now reached that point, what we're outlining today tightens our long-term targets and provides clear visibility into how we expect to deploy excess free cash flow. Moving forward, we intend to continue deleveraging and are targeting net leverage of approximately 4x in 2026 with a long-term leverage target of low to mid 3x net leverage, which we expect to achieve by 2028. That long-term target, it's at the low end of our previous 3-5x range because our intention is to become an investment-grade company. Based on our conversations with rating agencies, we believe this net leverage range is consistent with that goal. We're already well on the path to becoming IG.
Fitch recently rated our first lien debt as IG facility, and we expect to reach additional upgrade thresholds with the other rating agencies over the next one to two years on our path to corporate investment grade. While the business has historically supported much higher levels of net leverage, we view investment grade as the right long-term capital structure for RBI. Being investment grade provides tangible benefits, including a lower relative cost of debt, access to deeper, more durable pools of capital, and the ability to issue longer duration debt, sometimes with 20 or 30-year maturities. As I look around the room at the RBI leaders here in our audience, we're all personally large owners in this business, as Josh mentioned earlier. So we think in decades, not in years. And we believe being an investment-grade company is the right capital structure for us over the long term.
However, we don't need to be overly aggressive to achieve our goals. Based on where we sit today, we believe we can achieve corporate investment-grade leverage by 2028 through earnings growth without the need for voluntary debt paydown. This positions us well to optimize our cost of capital as well as renew our debt facilities in the coming years while creating capacity to return excess free cash flow to shareholders by resuming share repurchases. Importantly, on that basis, we're only a couple of years away from achieving our leverage goals. Given our significant free cash flow generation, we can do it all: invest in the business, reduce our net leverage, and return capital to shareholders through both dividends and buybacks. On the topic of buybacks, we believe our shares are currently undervalued and that this is an attractive time to invest in our own stock.
In 2026, we expect to repurchase approximately $500 million of shares and, together with our dividend, return over $1.6 billion of capital to shareholders. Share repurchases should grow from this level over time as we expect to use the majority of excess free cash flow to buyback shares annually. From a modeling perspective, it's important to note that we target a year-end cash balance of around $1 billion that we reserve for normal course liquidity, add funds and gift card balances, and working capital needs, including our quarterly dividend. Until we become IG, we do not intend to fund share repurchases with incremental leverage. Once we do become IG, we fully intend to operate the business within IG leverage parameters. At that point, we can plan to meaningfully step up the quantum of share repurchases with incremental leverage capacity each year as EBITDA and earnings grow.
Lastly, I want to quickly touch on M&A. Historically, M&A has been an important part of our strategy, and it's been a meaningful driver of value creation over time. However, more recently, our focus has been on reinvestment and driving stronger fundamentals across our current portfolio. As such, M&A is not a priority today. We are focused on running the brands we have at the highest levels. Taken all together, all of these priorities established a balanced capital allocation framework. We'll invest in our brands where returns are compelling. We'll maintain a healthy and growing dividend. We'll reduce leverage over time as earnings grow and become an investment-grade company. We'll return the majority of excess cash to shareholders through share repurchases. Let me put some numbers around that.
When I look at our dividend yield of around 3.8% today, and I add in $500 million in share repurchases, that delivers a roughly 5% yield to shareholders in a business that's growing AOI by 8% per year. This means that in 2026, we'd expect to deliver double-digit total shareholder returns, which should grow over time as our share repurchase capacity increases. That's pretty exciting. I now want to turn it over to a guy who knows a little bit about driving shareholder returns, our Executive Chairman, Patrick Doyle. I've now had the opportunity to work with Patrick for just over three years. We sit three seats from each other upstairs in the office, and we speak almost every day. I continue to be impressed by the ambition of his vision and the intensity of his commitment to winning.
He's been an invaluable resource for me, Josh, and the rest of the leadership team as we position the business to accelerate growth and drive long-term value for shareholders. Patrick, over to you.
Thanks, Sami. We're now at the exciting part of the morning where the team wonders whether or not I am going to stick to a script. I'm not. I had a couple of conversations at the break with folks about BK Assistant and Patty. I want to make sure everybody understands what you just saw there. We understand how technology can drive extraordinary results in a restaurant company. I have experienced that myself. The old days of having 500 people in a room coding, which we had in Ann Arbor, building things is not the way you operate anymore. With AI, you can do things much faster, much deeper, get extraordinary things from it. What did you just see with BK Assistant and Patty? What you saw with every team member wearing a headset is a personal coach for those team members.
Not only can they find out anything about what's going on in the restaurant at any given time, not only will they be told when the freestyle machine is out of a flavor and they should go replace it, which used to take over a day on average before the cartridge would be replaced and is now taking under an hour for that to be replaced because they're being prompted on it, they're getting coached because it can listen to the conversations that they're having. It can coach them on, are they being friendly? Are they saying welcome? Are they saying thank you for coming to Burger King? Right? It is extraordinary. It is a game changer in terms of how you run restaurants. I think our team is doing an amazing job.
I don't know if anybody else out there is on this yet, but it is a very, very big deal about how you run restaurants, the hospitality you bring, ultimately efficiency. It's going to predict things and say, "You know what? Sales are coming in higher or lower than we expected, and so you should adjust labor," and all of those things are going to be coming through the headset. It is really, really, really a big deal for our business going forward. I'm very excited about it. Before I get into all of my thoughts about the business, I want to spend a minute or two on the things that Sami was just talking about. As many of you know, I joined RBI three years ago, first and foremost as an active investor, putting a significant amount of my own capital into the business.
Shortly after I joined and made that investment, I spoke with all of you at the NYSE about why I believed my investment was going to generate great returns and what I believe needed to be done within the company to make it even better. A very large percentage of my net worth is in this company. Listening to Josh Kobza and Tom Curtis and Sami Siddiqui, there are three takeaways that really excite me as an owner of RBI. First, RBI will always make the right decisions and investments for the long-term health of this business, even if it has created some short-term complexity. Sorry about that little bit of complexity you had the last couple of years. It's starting to go away. Right? RBI operates with an ownership mindset. Right? That's how we think about the business. That is perfectly aligned with how I approach business.
It's the right answer for generating the best returns for our shareholders over the medium and long term. Second, the earnings algorithm is intact, and it's becoming more predictable. That allows me to even more confidently underwrite consistent future growth in this business. Third, this business generates significant free cash flow, $1.6 billion in 2025 with that number growing through our adjusted operating income growth and returning to a 99% franchise business. Relative to our market cap today, it's a pretty impressive figure and one that provides a ton of optionality, including what we have now announced, which is an acceleration in shareholder returns. I'm not usually one for slides because that controls what I'm going to say. I do have one slide here today.
I think it's important to make the point because Sami walked you through what our total shareholder return is expected to look like in 2026. Then I started debating it and saying, "Well, look, here I'm doing a little bit of air math, grabbing a napkin." I did some napkin math, which they have illustrated with a napkin. Here's the point. With our 8% AOI growth per year, I can easily envision a scenario where we are returning over $2.5 billion of capital through share repurchases and dividends the first full year after we become investment-grade and unlock leverage capacity. To be clear, our intent is once we're IG, then we can increase the quantum of debt while remaining investment-grade, which will allow us to return more.
Assuming no change in our share price, which would make me extraordinarily disappointed in everybody sitting in this room, my rough napkin math would add another couple of % to shareholder returns on top of Sami's low teens that he laid out. They wouldn't let me do the math on the chart, I said a couple of more points so you can do that math in that mysterious red box yourself. That's mid-teens total shareholder return. When I look at the multiple for companies with that kind of return relative to where we are trading today, I see a significant gap. At some point, the market, again, that means you, will recognize that our valuation today does not line up with the growth and free cash flow potential of this business. I would expect multiple expansion on top of that yield and earnings growth.
To me, that's pretty compelling as an investor. To be clear, I already put all of my money in. Now the company is going to start more consistently buying back shares with its own cash. I invite all of you to join us. Those are my takeaways on the financial side of things that I just wanted to call out. Beyond that, I want to talk about one of the fundamental reasons I invested in and joined RBI in the first place. That's because I love the restaurant business. You can tell it. I mean, I love this business. I get so jazzed about some of the stuff that we are talking about. I saw a great restaurant company in RBI. Now, what makes a great restaurant company? It's really not complicated, and it has not changed over time.
Great restaurants everywhere in the world are built on the same fundamentals: great brands, great people, great franchisees, great food, and great service to your guests, all done at a consistently great value. You can dress it up however you want, talk about it however you want, but that's the formula. None of that works without compelling franchisee returns. If unit economics aren't healthy, nothing else matters. You're going to have a brand, a great brand, and food that people love, and you have great marketing, beautiful restaurants. If the franchisees aren't earning strong cash-on-cash returns, growth eventually slows, reinvestment stops, and the system breaks down.
It's why when you saw Josh showing you the buildup on the 5% NRG, in every case, he was talking about these are the returns that people are getting in this section, right, in this part of it, why they would want to do this because the returns are good. In a franchise model, the single best predictor of long-term success is whether franchisees are making enough money to reinvest in their restaurants and build new ones. It's as simple as that. I have seen this play out over and over and over in my career. The companies that win over decades aren't the ones chasing every trend or reacting to every headline. They're the ones that do the basics exceptionally well year after year and make sure the economics work for the people who own and run the restaurants. At RBI, we understand that deeply.
You may hear some conflicting narratives out there about who we are and how we operate. If they're conflicting with what I'm telling you, I'm telling you they're wrong. Let me give you my perspective on how we embody the core tenets of a great restaurant company across brands, people, franchisees, food service, and value. First, I don't think it's a debate that we've got great brands with great food. In fact, it was one of my main takeaways when I joined the RBI business a few years ago prior to investing. The brands and the food are tremendous.
Each of our brands is compelling on its own with clear points of differentiation, loyal guests, and long runways to grow, even though the four brands are in different stages of that growth. They have one thing in common, and that's incredible food. From the Whopper at Burger King to our incredible hand-battered chicken at Popeyes to our coffee and baked goods at Tim's and hot subs at Firehouse, it is undeniable that we have exceptional products, which, of course, is the foundation of any great restaurant business. Now the question becomes whether you have the people who know how to build on that foundation over the long term. This company is led by people who know restaurants. Look at our leadership. Josh has now been in this industry for 14 years. You've seen the ownership mindset he brings to how we run RBI.
Sami has spent 13 years here and is deeply familiar with every single segment of our business. Both Josh and Sami have been in this business as long as I had when I became CEO at Domino's. They are restaurant people. Every single one of Josh and Josh's direct reports have at least a decade in the restaurant business. Across the brands, you have leaders like Axel and Tom, Hope, Joel, Naira, Peter, Mike, and Thiago, operators and brand builders who have spent their careers in restaurants, in the field, with franchisees. This is a restaurant company run by restaurant people. Axel started working in his family's restaurant business as a kid, basically from age 12, which is apparently legal in Germany. Before he ran that business, joined RBI, and then eventually took over as president of Tim Hortons. He is a restaurant guy.
Tom was a Domino's franchisee for 20 years before he ever stepped foot in the corporate world. Peter has built his entire career in restaurants and learned directly from Tom the importance of consistent operations in driving guest retention and the results. That's why he is the right person to lead Popeyes today, at a moment when we need to lean in and focus on restaurant-level execution and delivering a great restaurant experience day in and day out. It's not just Josh's direct reports. As Josh told you, we've built real depth behind them, many of whom are here with us today. One of our biggest competitive advantages is that we can develop and attract amazing talent and then train them and develop them. It's the best that I've seen. All of that talent at the senior level in this company now has deep restaurant experience.
We can move them around across the brands and geographies to deepen their experience where they need to get more learning and experience in the restaurant business. That cross-pollination makes the entire company smarter, faster, and better at solving problems. Our people think like owners. Because they are owners, it's not just Josh Kobza, Sami Siddiqui, and me who have significant personal equity in this business. The rest of the leadership team, as we've said today, has the majority of their personal net worth in RBI stock. Since the beginning, RBI has had a longstanding philosophy of broad-based equity ownership. As we said, about half of our RBI employees today collectively own about three-quarters of a billion of vested and unvested equity in RBI.
Having managed a lot of people and led a handful of organizations over my career, I can tell you that that kind of alignment is a game-changer. When people have real skin in the game, it impacts how decisions are made and changes how trade-offs are evaluated. You worry less about next month and more about whether what you're doing is actually strengthening our business, the business in one year, in five years, or 10 years from now. We've been doing that. We've made the hard choices that show that. That ownership mindset doesn't just align us with our shareholders. It aligns us with our franchisees, which brings me to my next point. I talk a lot about franchisee profitability.
The one thing that sits at the heart of that conversation and doesn't always get enough attention is the quality of the relationship between the franchisor and the franchisee. That relationship and that trust is what ultimately allows you to get things done in the system at pace. At RBI, we've done a ton of hard work to strengthen those relationships across the system. In Canada, Axel and the team had to fundamentally reset the relationship at Tim Hortons several years ago. It required making real changes, including structural decisions that weren't easy or always popular at the time. They were necessary. Today, Tim Hortons has one of the healthiest restaurant owner systems in the industry. In fact, the relationship is strong enough that their franchisee association recently decided to dissolve.
After enough years of seeing our actions drive their results, they trust that we have their best interest at the center of our decisions. It's unbelievably powerful when that happens. At Burger King, alignment took a different form. We asked franchisees to reinvest meaningfully in their restaurants, and we committed to doing the same thing. That partnership resulted in one of the largest and most visible reinvestment programs in the industry ever. You don't get that level of commitment unless franchisees believe in the leadership team, believe in the plan, and believe that the franchisor is fully in it with them for the long term. It doesn't mean that we don't have strong, healthy debate. That's critical to making the best decisions. I do believe that the majority of them trust that we are making the right decisions with their success in mind for their business.
That's why the vote just passed with 97% support for the ad fund rate extension. That's amazing. That is unbelievably powerful. We came back to them and said, "Beef costs are high. We're sorry. We're really focused on this. This is the right thing for the medium and long-term and short-term for your business." 97% of the restaurants said, "Yeah, we get it. We'll keep investing." At Popeyes, we benefit from some of the strongest franchisee relationships I've seen in the industry. The system is anchored by highly capable operators who genuinely love the brand. They know what Popeyes can be, and they know that right now, under Peter's leadership, we're taking the steps required to get the business back to that level quickly. At Firehouse, our operators are engaged and mission-driven with strong ties to their local communities. They know what Firehouse stands for.
They love it. They are in it. In our international business, we have an incredible group of master franchisees, many of whom have decades of experience running restaurants in their local markets. You heard from some of them today. They're a big part of how we've been able to drive consistent growth while navigating very different market dynamics around the world. Their partnership is essential to our success. The important point here is that we do not approach franchisees transactionally. We work with them as long-term partners with aligned incentives and shared accountability. They are owners in our business just like us, in many cases, for much longer than us. They must and will be treated with respect. That ownership mindset shows up in other ways culturally. We don't avoid tough issues.
When something isn't performing the way it should, we address it with the full weight of the organization. That ends up showing up in our operations and execution at the restaurant level. You don't hear us saying, "Focus on this. Ignore that." Terrible message for the market. Horrible message for franchisees and the brands that you're saying they're not our focus. We did that at Tim Hortons with Back to Basics, focusing on elevating food and beverage quality, improving operations, and rebuilding franchisee trust. Nothing flashy, it worked. Those results have compounded over time. We stepped in decisively at Burger King China when it became clear the situation needed to change. Now we're sitting here a year later with a fantastic new partner. There is no kicking the can here. Burger King is the clearest example of this mindset. I'll be frank.
I think the investor perception of Burger King right now is meaningfully disconnected from what I'm seeing inside the business and from what our guests are now experiencing in their restaurants the vast majority of the time. When I hear some of the concerns on Burger King out there, a number of them simply do not line up with the facts. So-called value wars and competitive pricing are not derailing our progress. Remodel uplifts. They are very real. Underlying franchisee economics, while they are not where we ultimately want them to be, they are materially stronger than they were a few years ago. That's amid all-time high beef costs. The major franchising issues that we had previously that held the system back are now behind us.
Anyone who's lived through a turnaround knows that the early work, the in-restaurant operational work, is often the least visible, the hardest for you all as investors to measure, maybe the least appreciated. It's the most important, which is why Tom keeps telling his team to keep their heads down and stay focused. The first phase is about resetting standards, rebuilding trust, and fixing the fundamentals. That takes time, and progress is rarely perfectly linear. What matters is whether the right work is being done day after day. As Tom always says, "Progress, not success." We still have lots of work to do, but we're reaching the point where, if you pay attention, you can see real progress in the Burger King brand. We're entering the phase where we can start building some really exciting things on the foundation that Tom and the team have put back in place.
What we're seeing now is a system that's healthier, more aligned, and more disciplined than it has been in a long time. Operations are improving. The asset base is getting better every year. Franchisees are leaning back in, reinvesting, upgrading restaurants, and focusing on execution. We're bringing in dozens of new franchisees with incredible energy into the system as we refranchise restaurants. These are the behaviors that matter most in a franchise model. When you look at our sales trajectory versus the industry, it is evident that it's starting to have that intended impact. This is how strong restaurant brands rebuild momentum. You fix the core first. You improve operations. You improve marketing. You invest in food quality. You modernize your restaurants. You rebuild trust with the people who are actually running those restaurants. Then you let that momentum build, and then you fuel that momentum.
I'm confident in where Burger King is headed, not because I expected instant results, but because I recognize the pattern. I have seen what works and what doesn't work. What I see today is a team executing with discipline and staying focused amid the noise. You saw this with Tim Hortons as well. The Back to Basics plan was executed in the middle of the pandemic when Canadians stopped commuting to work. Given that almost 50% of the Tim's business occurs in the morning-day part when people are commuting, it was difficult to see the immediate results. Axel and his team kept their heads down and stayed focused on executing the plan. Today, Tim's in Canada and the U.S. is a $7.6 billion system-wide sales business that drives over 40% of our adjusted operating income.
Despite its importance to RBI, you'll notice Tim Hortons didn't have a dedicated section today. That's intentional. Tim's didn't require a deep dive because it is performing exactly as you expect a strong, well-run business to perform, delivering strong franchisee economics and consistent results across a range of consumer environments. While Tim's remains a clear market share leader across its core categories, including coffee, baked goods, and breakfast sandwiches, Axel and the team also continue to invest in growth categories like PM Food and cold beverages. Those efforts have translated into nearly 5 straight years of positive quarterly same-store sales growth. Tim's is firmly cemented as Canada's most loved brand, and we're confident the foundation is in place to ensure the brand thrives for a very long time. Let me touch briefly on the unit growth that we were talking about before.
From my perspective, this is pretty straightforward. For the last few years, China was the biggest drag on our consolidated unit growth, and we fixed that. By the way, as I was talking about before, we didn't try to manage around it or paper over it. We just jumped in like owners and fixed it. We know that was a little bit messy for all of you as we did that. We're sitting here one year later after just closing a deal with an incredible operator. Johnson Huang was on the video. He ran KFC China. He said, "I used to work with another big brand." He ran KFC China, which is a pretty good business, right? He's an incredible operator. The team at CPE is fantastic.
Honestly, they blew me away when we met with them and talked to them about their vision for the business and what they believe they could achieve in China and their excitement for the business. By the way, for those of you doing the math, if you think about what the cost is of building a Burger King in China, the $350 million in capital that they injected into the business, that's what gives me an awful lot of confidence that we're going to be building a lot of stores. This is not just about the contract because the contract, at the end of the day, right, that's an agreement between us and how we think about the business and what it can achieve. There is $350 million sitting in a bank account right now waiting to fuel growth for Burger King in China.
That fully funds the next 1,250 Burger Kings to be built in China. That's why I'm confident, not because of a contract, but because the cash is in the bank. Like I said, we fixed the Burger King China situation. I'm going to be over there in about a month. I am really excited about what's going to happen and about the value that's going to be created for CPE and that team and for all of us as shareholders. That alone gets you above the 4% mark by 2028. From there, you just have to believe that Popeyes International and Firehouse, U.S. and Canada, and some other collection of markets, it's going to accelerate, and we're going to be back at that 5% plus by 2028. I mean, of course, there are going to be puts and takes.
It's never going to play out exactly the way we just laid it out. There are so many different ways of getting there that that's what ultimately gives us the confidence. That's the advantage of running a business of our scale. Not everything needs to work all at once. I talk to Thiago about this often, that when you're running over 200 brand-country combinations, you don't have to and you can't be a perfectionist, right? Not everything's going to work all the time. You need the vast majority of it working. Thiago and his team in international are doing that. Let me close with a few takeaways. We are a restaurant company, a really, really well-run one.
Across each category that we compete in, we offer the best quality food and beverages that our guests genuinely love: coffee, breakfast, and baked goods at Tim's, flame-grilled burgers at Burger King, incredible hand-battered fried chicken at Popeyes, and cravable hot subs at Firehouse. All of that is delivered by committed, hands-on franchisees who deeply care about running great restaurants. It's supported by the ownership mindset we take to running RBI. We're willing to make tough decisions, and we don't ignore any component of our business. We know how to do the basics right. We prove that with Tim's, and we're doing it again with Burger King. We have a business in Canada, our largest business, that's been delivering positive quarterly comps for nearly five straight years.
It's one of the most penetrated concepts in the world and yet is still growing units and generating a great return on those units for the people who own them. We have an awesome international growth business generating double-digit system-wide sales growth that's well-diversified across markets with Burger King China back on track and representing a ton of upside. This is a simpler business than it was a year ago, and it will be meaningfully simpler again a year from now. Through it all, we allocate capital well, and we keep franchisee profitability at the center of our decision-making. When you're looking to invest, you're looking for scarcity. I say with confidence, RBI is one of the very few businesses that meets my threshold of being a great restaurant company. I couldn't be more proud to be a part of RBI.
With that, I would like to invite our business unit presidents to the stage to kick off our panel with Kendall and our Q&A.
Okay, you guys. Awesome. Well, thank you. Thank you, everyone, for joining us again today. Hopefully, it has been a good session so far for you all. I'm very excited to have all the business unit presidents here with me today. You already heard a lot from Tom earlier, but you haven't had the opportunity to hear from Axel, Thiago, Peter, and Mike yet. Hopefully, we'll cover a few questions there. Then we're going to open it up for audience Q&A. I'll invite Josh, Patrick, and Sami back to the stage to join them at that point. I'm going to kick it off starting with Axel. Axel, Tim Hortons is a very remarkable business in Canada.
For those of you who are not from Canada, it's the most loved restaurant business in the country. I think it's probably one of the most loved brands in the country. The maple leaf is literally the flag for Tim Hortons, so pretty synonymous with the pride that everyone has here. It represents over 40% of RBI's adjusted operating income, so an extremely important part of our business. You've been leading the team, Axel, since 2019, and you developed and executed a very successful Back to Basics plan. For those less familiar with the brand and the plan, I just thought you could walk through a quick history and why you believe it's set the business up for success over the past few years.
Very happy to do. Thank you very much, Kendall. Hello, everyone. When we go back six, seven years in our Canadian business, it was not a pretty time. Our sales were declining. Our traffic was declining. Our franchise relationships were not very good. What did we do? As part of our analysis, we did a ton of research with Canadians. Two things really stood out. Number one, exactly as you just mentioned, Kendall, Canadians had a lot of love for this brand. Even during this very difficult time in our history, Canadians were cheering for us, the most loved brand in the country, the most trusted brand in the country, the brand that is associated most with communities. This is how the brand grew, community by community. All of that was still very, very strong. That gave us confidence.
The second piece that we learned is that we had to do better. We got feedback from Canadians, "Your coffee is good, not great." "So your breakfast sandwich is good, not great." "And your baked goods, they are mostly great, actually, but we had still opportunities to do better." What does it mean? We had still brewing technology from the '60s, so the glass pot, that was not what we should be doing. We invented the Fresh Brewer, and now we have modern brewing technology in our restaurants, which helped us to deliver consistently a great cup of coffee. The second thing was we brought freshly cracked eggs to our restaurants. We had a, call it an egg patty, a frozen egg patty before. That was okay, but an egg should be an egg, I guess, right?
That's why we launched freshly cracked eggs. Hope likes to say, our CMO, we put the apple back in the apple fritter. It's one of our most iconic donuts. There were not too many apples in it. Now there's a lot of apples in there. The same is true for our Boston Cream, my favorite donut, but we didn't do it because of that. We put in 25% more Venetian cream. Those were all things that we did. We improved operations as well at the same time. That set the foundation, like my teammates were sharing earlier in their presentations, for the turnaround and, yeah, set the foundation to deliver on the five years of almost five years, sorry for that, of same-store sales growth.
It is full five years and 19 consecutive positive quarters. We'll get to that. Hopefully, we'll get to that actual 20 quarters consecutive very soon. Awesome. Well, as we've mentioned and as you just mentioned, you've had a very strong track record. One of the questions I consistently get and Tara and I get a lot from investors is this sustainable? Can you walk through a little bit more on the confidence that you have in the sustainability of your positive same-store sales growth? What are the key drivers that you see going forward that should make us all kind of excited and confident in Tim's trajectory from here?
I'm super happy to do. Super happy to do. It's five things that come to mind. Number one, the team. Really, the team that I have the pleasure to work with now for many years is hands down the best group of people I ever had the chance to work with. Many of them are here in the room, and you will have a chance to speak with them also during lunch. That's number one. Number two is the brand strength in Canada. It's, like we said a couple of times now, it continues to be the most loved restaurant brand in the country. It's probably synonymous. Actually, I don't have that research point, but I would say Canadians love Tim's as much as they love hockey. Still something to explore, but there's a lot of, lot of heart for this brand.
The second piece is product innovation. We still have a lot of opportunity to grow in our most important day part, the AM. We have a lot of opportunity to grow in the PM. PM means in food and in beverages. We see a lot of opportunity with espresso-based beverages, with cold beverages. We're rolling out a new espresso machine. You have a chance next door to experience our new Suprema espresso machine. On top of that, we are rolling out fountain equipment to all our restaurants to really make a big push in combos. We are super excited about that. Just to name a couple of things. Operations is very, very critical. Naira and her team have already been leading significant operational improvements.
That means guest satisfaction reached all-time highs, and we made significant steps forward in speed of service. We see lots of opportunity with our owners to do even better. The next point is unit economics. $295 is the number that we have per restaurant in terms of profits. That was a little bit of a step back for all the reasons that were mentioned. We are very optimistic because so many things are in our control to do better. We are very optimistic that our owners have the financial capacity to invest into equipment and remodelings. That all gives me a ton of confidence that we are literally, I think one of our franchisees in the video said it, Raj, I believe it was, for India. It feels the same way in Canada. We are just getting started.
Lots of opportunity, lots of confidence for our business in Canada.
Awesome. Thank you. Thiago, turning to you now. We heard a lot about international unit growth today, which I will get there. You also have delivered five years of positive same-store sales growth. I'm often asked, what is going on in the international market that continues to help deliver such strong performance, especially for those of us based in North America, which I think almost all of us in this room are? We don't see that same level of detail and insight into what's happening in these international markets. Can you walk through a little bit? What's the difference that you see in international versus U.S. markets? The U.S. consumer environment has been much tougher recently. Why do you think international has been so well positioned? Just walk us through your thoughts.
Thank you, Kendall. Hi, everyone. I think there are many drivers, but I will focus on the three that I consider to be the main relevant ones. First, I think the market dynamics in international are very favorable. Second, our franchise model is a real strength for us. Third, what has been driving our growth are what I see as sustainable, long-term growing platforms that should continue to drive incremental sales in the future. Talking about the first one, the market dynamics, we see urbanization, improvements in infrastructure, growing middle class, all those things leading to an increase of penetration of Western QSR brands in the majority of the markets. It's really about the category growing and not just competing for market share. On top of this, in the majority of the markets, there is really one large international player that owns 50% of the market.
All that together represents a big opportunity for us. The second point about our franchise model, you heard today, we have a great network of very strong local partners that are highly aligned, well-capitalized, and fully committed to building our brands in their markets. They are world-class operators that deeply understand their markets and really care about building our brands. You heard from some of them today. Hopefully, that gives you a flavor of the caliber of our partners. This combination of local expertise and our global scale is what gives us a real competitive advantage. The third point I mentioned was what has been driving our growth, right? It's not about one-time big launch or a short-term fad. It's about a series of initiatives that we believe should continue bringing incremental sales in the future. We have a steady pipeline of innovation.
We have developed, together with our partners, very strong value platforms tailored to their markets. Our partners have been investing a lot in their assets. Today, in International, we have 80% of the system with our modern image. They are highly focused on investing in digital capabilities, which is a big driver of sales growth for us as well. Altogether, it gives me confidence that we can continue that pace.
Josh talked about one of our advantages at RBI is our ability to bring brands globally. I think the brands that we all know are going to drive the biggest growth for us outside of Burger King, of course, internationally, is Popeyes. We have already taken that brand to pretty remarkable levels, 475 restaurants when we acquired it, over 1,800 today. What gives you the confidence that we're going to be able to continue pushing that brand forward?
Well, I'm very confident because if you look at the past 10-15 years, you see that our track record is pretty solid. You saw that today when Josh and Sam's presentation, cases like Brazil, BK Brazil, for example, back in 2010, we had 100 restaurants. Now we have close to 1,000 and have passed $1 billion in system-wide sales. We also have Spain that back in 2012, we had about $700 million sales, now over $1.7 billion sales. We talk a lot about France that you saw today. Back in 2013, it didn't exist. Now it's our largest market with over $2.3 billion in sales. Most recently, we have cases like Japan that in two years doubled system-wide sales to nearly $400 million. That's on the back of net restaurant growth and two consecutive years of 20% same-store sales growth.
Just in the Burger King world, we have six businesses that are selling over $1 billion in system-wide sales, with one of them over $2 billion. That's very impressive in my point of view. Turning to Popeyes, we already see very strong signs of success. Popeyes went from $300 million in system-wide sales back in 2016 to almost $1.8 billion last year. We grew system-wide sales last year about 40% on top of 50% the year before. This is driven by cases like the ones you saw before with Tom Crowley from Popeyes U.K. U.K. is a market that we opened four years ago and now is generating $250 million system-wide sales. We also have cases like Turkey. Turkey is impressive. We have nearly 500 restaurants with $400 million in system-wide sales. Spain and many others.
Spain is a great one as well. Right after COVID, we had 40 restaurants in 2021 and now getting close to 200. All of that is the result of having fantastic partners, like you said, highly aligned, well-capitalized, and supported by our global infrastructure.
I'm going to throw one more at you. Sorry. When you look at the 1,400 units out of the 1,800, they're coming from the international business. Where do you see the biggest risks to that, and where do you see the biggest opportunities?
I will refer back to what Patrick, Josh, Sami Siddiqui said before. I think the biggest risk we had was in China, really, because of the situation we had there. That has been heavily mitigated with the partnership we just signed with CPE. I'm a lot more comfortable with the plans we have. The second thing is something that Josh Kobza pointed out as well. There is always execution risk, but our plans have been risk-adjusted for that. Our system is very diversified. Our base of developers is pretty diverse. If something happens in one side of the business, there are always other places that can compensate, places like China or Japan that I just said or India, you heard from Rajeev Varman. We really believe that we can over-deliver in places like that.
Awesome. Tom, we've heard a lot from you today. I'm only asking you one question.
Can we repeat?
Yes. We are often asked, I mean, you've made really great progress at Reclaim the Flame. I am often asked, why is it not going even faster? Can you provide your thoughts on that question? Why aren't we even faster in the results there?
Sure. I think the investments that we've made in Burger King were after years of erosion. This is a huge system, and it takes time to turn around an aircraft carrier. We had to improve operations in the franchisee base, and I think the results are showing. We've improved franchisee profitability, and that's going to be the underpinning of many future years of success. Really, if you look at this relative to the industry, when we started, we were 700 basis points behind the system in same-store sales. At this point, we're now operating at about 300 basis points ahead of the industry. I think that's an amazing amount of progress. Then as I think about the future, we've done all these fundamental things, right? We've got a strong system that needs to get stronger, let me be very clear.
All we need now is a nice little catalyst. When I think about a catalyst, I think about something like the Elevation campaign that we're embarking on this year and the elevation of the menu. I think it can light a fire on this brand.
Awesome. Peter, you came up under Tom, helped develop Reclaim the Flame, and you're now leading Popeyes. The Popeyes business, you made a lot of very important operational improvements in the Burger King business that Tom talked about today. The Popeyes business was very, very strong for a number of years, especially coming off of the launch of the chicken sandwich in 2019. I think all of us in this room can say we've been a little disappointed in what we've seen over the past year or so. What is your initial diagnosis? You're only 120 days in. I just want to put that out there for everyone. Please just keep that in mind. What's your initial diagnosis on what needs to be done, and what are the key areas that you're going to be focused on in the next year or so?
Great. Thanks, Kendall. Good morning, everyone. It's a pleasure to be with you here. Well, look, obviously, as Kendall said, I've been getting up to speed on the business over the last few months, getting into the restaurants with our franchisees, with our restaurant teams, and getting to know a lot of our guests as well. What I'd say is I am increasingly encouraged about the foundations of Popeyes. Obviously, it's a brand rooted in deep Louisiana culinary heritage. As Patrick mentioned, we have some exceptional franchisees, great operators with a people-oriented mindset. I think we have everything we need to be successful. Now, I think what happened over the last year and a half, I think it's safe to say ultimately, we focused on attracting new guests, and that came at the expense of the core.
We tried to bring new guests in, which we did, but they didn't come back. We had a lot of LTOs that, frankly, just didn't resonate with our core guest. In the complexity that that added, our service began to fall further and further short. Thankfully, I think all these problems are addressable. I think I really have three main takeaways at this stage. The first of which is our service. When our food, our bone and chicken, our tenders, our incredible chicken sandwich are executed as they are intended to be, they are the best products in the industry. On our core, this is point number two, right? We just strayed away from what makes Popeyes so great. Again, we have incredible deep Louisiana culinary heritage. Our food is absolutely amazing. I think we can celebrate and highlight that a little bit more.
I think doing that as well is going to help our restaurant teams focus on fewer, better things done daily. I think we can deliver an incredible service and food experience. The last piece is on value. Because of the LTOs that we had introduced, it was at the expense of focusing on a little bit of everyday value, which, of course, is important in this consumer environment. We can do a little bit of that. We've already started to make some changes there and are starting to see some sequential success even since the fourth quarter. In addressing these three fundamental issues, service, our core, and value, and service, we've already started to do the work to expand our field team. We'll increase that team by about 75%. We are just about done with hiring.
We are training all those folks in our company restaurants in New Orleans. Excited to get them out to the field and into the markets that our franchise needs the extra hands-on deck to start to improve service. We're obviously working on the restaurant trainings, the hand-to-hand, shoulder-to-shoulder work with our franchisees. We started that in the fourth quarter. As soon as I got in place, we're doing more of that this year. I think, importantly, you heard Tom talk a little bit earlier about the Royal Roundtables at Burger King, which have been this incredible firepower for us to really engage with our restaurant managers who are the brand and the communities that we serve.
At Popeyes, we are introducing for the first time in many, many years, maybe since the '80s, experience rallies, which is going to bring our restaurant managers into our planning, help them understand, "Hey, what do we need from them? What are we going to focus on? What are we going to get right today, tomorrow, and this year?" Again, going back to the core, it's the execution of our incredible core products, our bone and chicken, our chicken tenders, and our sandwich. I believe working closely with them is going to be the unlock that's going to get us back to the level of success that this brand can certainly deliver on. I think lastly, on value, again, a lot of the LTOs just attracted new guests. They didn't come back, and it was at the expense of our core guests.
We haven't given them the service or the everyday value that they deserve. Again, we already started to put some value platforms in place, both for single leaders as well as family occasions. We're excited about some of the sequential progress that we're already making. Ultimately, what I think all of this work lines up to is positive same-store sales in the back half of this year. Right now, we're paying a lot of attention to our deseasonalized sales, which we just index our daily, our weekly, our monthly results versus some historic averages. We're focused on that sequential improvement right now. What are these value platforms delivering? certainly, as we create more tailwind with better service in our restaurants, we have a lot of comments to get back to positive same-store sales in the back half of this year.
Awesome. That is great to hear. When you kind of compare the starting point for Popeyes right now versus the starting point for Burger King with Reclaim the Flame, can you walk through some of the puts and takes there on how you see the starting positions for each of the systems?
Yeah. I think, look, it's a good question. I think, first and foremost, Popeyes is ultimately starting from a really healthy base, right? Our average restaurants, we've got $235,000 in four-way EBITDA. Our A restaurants, which we certainly aspire to ensure more franchisees and more restaurants become A restaurants, deliver $270,000 in average four-way EBITDA. As well, if we think about the growth that Popeyes has experienced over the last 10 years, the last 20 years, the majority of our restaurants have actually been built within the last 10-20 years. Most of our asset base is quite new. It's healthy. Any work that we really need to do is fairly light in touch and scope. I think I would add just for context as well, our franchisees are fairly healthy from a leverage perspective.
I think we're in a very good position to do what needs to be done. It's not that extensive in nature. Really, the focus has to be on service around our core, which I know we have a history of actually delivering that really well. We took our eye off the ball on the core and our service around it. We're going to get back to it. I'm confident that we can ultimately get back to success there. As we think about the capital that went into Burger King and why Popeyes is not Burger King, there are really 2 big bucks of capital that Tom walked through earlier today, the first of which was the acquisition of Carrols, right? There's a big franchisee that we know we needed to accelerate the pace of modernization.
There's no Carrols at Popeyes, so that's simply not an issue for us. Again, on the remodel front, which is another big portion, right? The long-term Royal Reset program, which a lot of capital has been dedicated to. Again, I'll just go back to most of the Popeyes system has been built in the last 10 years. For Burger King, most of the restaurants were built by the mid-'90s. Just erosion that had happened over the course of decades, it had to get addressed. We don't have the same dynamics at Popeyes, so it's just not as much of an issue. I think the last piece is there's a bit of a smaller investment into the Burger King ad fund to try to course-correct and make sure that we add healthy messaging to compete with the big players in the market.
For Popeyes, our ad fund is very healthy. We are now at a stage where we can afford a very healthy message 52 weeks out of the year. We consider ourselves we are now a mass brand, and we have an ad fund to compete that way. Nothing that I'm concerned about on that front, and very confident we have everything that we need to be successful.
To put a, sorry, one more question for you. To put a finer point on that, do you envision a need for incremental investment, though, corporate support from RBI to get your plans in place going forward?
Look, I think ultimately, we can accomplish our goals without significant corporate investment from RBI. To the extent that there's any capital investment, it's already contemplated in some of the CapEx and the cash flow guidance that Sami outlined earlier today.
Awesome. Okay. Moving on to you, Mike. We acquired Firehouse Subs four years ago. The intent really was to tap it into our global network, right, and try to accelerate the business in terms of growth both in the U.S. and overseas. You've done a pretty fantastic job now over the past four years. I think Josh showed the net restaurant growth chart there. We've increased NRG by 5X versus what it was in 2021. I'd love to learn a little bit more. First, before we dig into the development side of things, when you come to market with the Firehouse Subs brand to a new market or to any potential new franchisee, how do you differentiate yourself? What really differentiates the Firehouse Subs brand from some of the other larger growth subcategories out there?
Thanks, Kendall. I really love the question because it allows me the opportunity to talk about what makes Firehouse so special. I think we have incredible fundamentals. First of all, we're number one in our category in hot sandwiches, and we've led in that category for quite some time. It all goes back to our founders, their culinary heritage. We're number one, actually, in the sandwich segment as well in guest satisfaction. We typically have OSAT in the mid to high 70s, Google Stars 4.4.5. We actually were ranked last year by Nation's Restaurant News as the number one fast casual concept in the country. We're number one in the entire restaurant space in supporting our community. We've raised over $100 million for first responders through our Public Safety Foundation. We're really proud of that.
We're actually top three private donor in all the U.S. for lifesaving equipment. We've seen really rapid acceleration in our digital business. Since the acquisition, we've seen our first-party business grow almost 2x. We've seen our digital business grow to close to 50%. We actually were just ranked the number one brand by Ipsos in terms of app functionality in all of restaurants. Very excited about the fundamentals, and now it's all about how do we unlock and grow this brand even faster.
Speaking of, can you kind of walk through what has been the driver of success over the past few years, some of the foundational elements that you put in place to drive development, and what gives you confidence in the unit growth targets that Josh laid out today? Firehouse is a very important contributor to our NRG going forward, and you've demonstrated a clear track record, but would love for everyone else in the room to hear directly from you on why you're confident going forward.
Yeah, it's a great question. I think, first off, in the US, we started off being heavily focused on unit economics. Since the acquisition, we've seen four-way EBITDA at the restaurant grow close to 30%. We passed over $100,000 this year. We've been very focused on maintaining best-in-class CapEx, which is going to result in better paybacks. Through improved supplier negotiations and also shrinking our footprint a bit, we were typically around 2,000 sq ft. We came down to about 1,400-1,500 sq ft. We don't need that same size we did before. Both those growing EBITDA and improving our build costs have gotten us in that round four-year payback right now, which we're really excited about. We're looking forward to pushing even further.
On the Canada side, we're super excited about the growth that we've seen there. It's very different than the U.S. We have a ton of white space in Canada. We don't have the same level of competition. This year, we were one of the fastest-growing brands in the entire country. A lot of that comes from how we were able to leverage and cherry-pick the best operators we have at Tim's. They're doing an exceptional job operationally and unlocking a ton of growth for us. We're really excited about the pace of growth we're seeing in all of North America. One thing folks don't realize just about the Firehouse business is, even though we're growing quickly, even though our ARS is around $1 million, we have a take rate in the high single digits.
It's very accretive in terms of growth for RBI as we continue to build 100, 150, or 200 restaurants over the next few years.
Awesome. Before we open it for live Q&A for everyone, I'm going to do a quick rapid-fire here. We talk a lot about franchisee profitability. It's between 10%-15% of all of our executives and the team's compensation here at RBI. We are really, really focused on that. I think one of the best ways to grow franchisee profitability, we're all aware, is to grow unit growth, AUVs. I'd love for you all to kind of talk through very quickly in lightning round style, what do you think are the next top three things that are going to drive your AUVs another 25-plus % in the years ahead?
Okay, we talked four things.
Oh, sorry.
No, the first one is continuing to grow in the morning. We are by far the market leader. At the moment, we are rolling out a new English muffin, fluffier and even tastier in Canada. We are testing new toasters to toast it even better. Super excited about that. It's the PM day part, of course, with beverages and food innovation. I talked about some of the equipment that we are rolling out there, but expect more growth to come here over the next years. Operational improvements. We're obsessed about operations. Naira James, who leads our field together with our owners, continuing to improve operational performance. Of course, the digital world. We strongly believe that we can improve our business through even stronger digital engagement, which means partnerships.
We announced our partnership that we'll have with Canadian Tire, another very strong Canadian iconic company. We believe that we can further improve the experience in our digital channels. Those are some of the things that we are super excited about.
Thank you.
Thiago?
I think number one would be continuing to consolidate our position as the best beef burger in all markets and doing that, leveraging our flame grill taste. The second one would be continuing to grow in fast-growing categories like chicken, where we just launched our Crisper platform, and it's doing really well, and other categories like beverages and snacking. The third one, I'd say, is continuing digitizing our business, rolling out kiosks, table service, table ordering. Those things are really important to improve guest experience, but they also drive a lot of sales. If I could squeeze a fourth one, it would be for Popeyes, Firehouse, and Tim's International. It's really about opening more restaurants and growing brand awareness.
Okay. Awesome. Tom?
Yeah, I think for us, there's got to be a continuation of the building on this foundation that allows what we do in marketing to really stick and to work. I've seen the best example of this most recently with the amazing work that Joel and the team did on SpongeBob. Yeah, we were high-fiving all through December, but what I was thinking about the entire time is what happens when this is over. Just the foundational strength that we've seen in the business since the end of SpongeBob has told me that that's what's important. Because in the past, we would do promotions, and then we'd just get right back to the baseline.
I think seeing us be able to build our business over time through great marketing initiatives and know that we're going to keep some of those guests over time is what's going to really build this business long-term. As we think about that and what we do in 2026, I think in 2026, I'm very excited that we can now get to that important work of elevating the menu. We announced the Whopper improvements today. What better place to start than with the Whopper? That's just the first chapter of this elevation story that we can tell around all of the improvements that we've been making at the brand over the course of the last few years and acknowledging at the same time that we have a lot of work still to do.
Finally, just once again, having that firm foundation allows us to now attract back kids and families into our restaurants. It can be a place that you're excited to bring your family, not scared to bring your family. It's just been great to see that improvement on the tail end of the last couple of quarters in the kids and family business.
Tom's been doing many calls with a ton of Burger King guests. Feel free to ask him for some of the feedback they've been getting. I think it's been pretty amazing to hear. Peter?
Yeah. What I'd say first is I have two little daughters, five and three. My oldest still wants to go to Burger King every weekend, trying to get her to fall in love with Popeyes. It's a work in progress. I'm excited about the buns they'll make, but she likes the cheeseburger at Burger King.
Let's keep it that way.
Yeah.
Wow, that's great.
Yeah. At least at Popeyes, what's the focus? What's going to drive the growth? Fairly simple here. It's service first, execution at the restaurants, a little bit of everyday value, and once again, service and execution at the restaurants. It's that simple.
Awesome. Mike?
Peter, kids love Firehouse as well. I think first off, it's growing in the right category. We're really focusing in 2026 on high-growth categories like chicken and steak, which have been really impactful in our space. We're also rolling out French fries as a side, which is a real differentiator for us. We have half the system at the moment already with French fries. By the end of 2026, every restaurant will have them.
You guys get to try some today.
Yes. They're very good. We are also continuing to expand our digital business and leveraging first-party. We're rolling out targeted offers this year, which we think could be a big tailwind for our business. Three, being a bit more targeted in how we spend our media dollars this year, we're really ramping up our sports partnerships in 2026. We saw really strong momentum from that in 2025, and we're looking to expand them in 2026.
Amazing. Thank you, guys. You're all staying put. Patrick, Josh, Sami, if you can come up and join them. For anyone following online, please feel free to submit questions to investor day@rbi.com. If we have time for questions from the online people, we'll take them. In the meantime, I'll be walking around with microphones. Please wait until you have a microphone until you ask your question just to make sure everyone can hear. Thank you. Yep, we're going to do scoots. Sorry. Here you guys go. Yeah.
We should be in the office.
Maybe not. A little bit.
Just a little bit.
I sit down here and I make it a large.
I don't blind on the side with that.
I always try to stay as far as I can away from Mike and Patrick. It's not flattering. You can tell we're getting close to lunch, too. The number of product references keeps going up. We'll take questions until everybody gets too hungry to ask anymore.
Hi, guys. Dennis Geiger, UBS.
Thanks for putting this great event together for us today. Very helpful to hear about the key drivers of the AUV growth by segment there at the very end. Can you talk a little bit more about that 3%+ average annual same-source sales target? I don't know if kind of breaking it down by segment or sort of obviously, the last few years, the macro certainly has been a pressure there, creating some of that gap. Anything more on the go forward and delivering against that average annual number?
Yeah, I think you heard the plans. I think they're more focused within the business units. I think the big part of getting probably over that 3% is one of the things that I referenced a little bit earlier, which I think is getting all the business units delivering together. The average, if you look at it, was around 2.4%. I think a little bit of that with some ups and downs. I think as we get things like Popeyes back on track, we're going to be there pretty quick. Anything anybody wants to add there?
Hi. Jacob Aiken-Villops, Melius Research. Great presentation, everyone. I have two questions on technology. One with Patty and the Burger King. How is it actually affecting the hourly-level employees? Is it reducing turnover, increasing satisfaction? More broadly, how do we think about technology across all the other brands and internationally?
Tom, do you want to start with the team impact?
I'll take the BK Assistant one. I see it in our, we have a bunch of restaurants ourselves, so I see the impact of it every day and the satisfaction of the team members, how much they enjoy using it. Certainly, turnovers improved in our company restaurants. I think where I'm most excited and where I'm sure you'll be most excited is just seeing the improvement in EBITDA. If you look at EBITDA net of control, we're looking at around a $3,000 uplift so far. That's exciting. I think in restaurants, and this gets back a little bit to the operational side of this, in restaurants that we've deployed BK Assistant and Patty into that are not performing well operationally, where a franchisee or one of our company restaurants has said, "Hey, we need some help over here." We've deployed it in there.
I mean, we've seen up to an $8,000 change in EBITDA in those restaurants net of control. That's exciting for the franchisee.
If I can add maybe one or two other points, I think one of the fantastic things about the way that Thibaut and Tom and the rest of the team built Patty is they built it together with our franchisees and our restaurant general managers. It wasn't something that we built here in the office and tried to push out to the system. I think it was much more asking the franchisees and the restaurant teams, "What would be helpful to you? What would make your lives easier?" Then we went back and put that together. I think the approach that you all took really made the product a lot better. Also, got a lot of the franchisees and the restaurant teams really invested in it and excited to have it in their restaurants.
I think that's characteristic of Tom's approach across everything in the business but was a really important feature of this one. As I step back and just to your broader question about how do we think about technology, I'd say we've evolved a bit there over the last 3-5 years. Our focus, I would say, on some of the core systems in the restaurants, so things like your point of sale and your network and your back of house, we've really focused on having standardization within each of the businesses but relying on some of the experts in the industry who already have great software platforms there. I think we've sort of made tremendous progress.
Tom referenced it a little bit in his presentation, behind the scenes and standardizing those systems and vastly elevating the level of service and the consistency of availability of those systems. That's some of the underlying fabric of some of the operational improvements that you've seen across our businesses. We decided when I was involved in technology, we started down the road of building some of those systems ourselves. I think what we realized is that those are enormously resource-intensive undertakings, hundreds or thousands of folks, $10 million-$100 million of investment in platforms that, frankly, third parties are doing a better job than we could do building, and we didn't need to replicate. I think as we look forward, I think some of the work that's happening in AI is going to radically change how that software is developed and deployed.
I think trying to do that ourselves, I think a lot of that would risk being obsolete and being too expensive. I think we're on the right track there, and it's working for our businesses. What we are building in-house is some of what you saw with Patty, stuff like what Thibaut is working on. And the nature of that development is radically different. Instead of hundreds or thousands of folks required to build it, we're doing it with handfuls. The number of resources it requires to build on top of some of those third-party tools and build the AI stuff like what you see with Patty is just wildly different. We're talking handfuls of people, single-dollar millions of resource investment, which is really different. And it allows us to build tools that are having a huge impact in our business.
You saw we're at 500 restaurants. We're going to go to the whole system. I think we're still early in seeing the widespread impact. As you think about how that goes across the company, we don't centralize it all, but you can trust everybody's watching. Because of the nature of the tools, we're able to replicate them across some of the other businesses pretty quickly and pretty easily. Patrick, anything else you want to add on the technology front?
I think it's going to revolutionize how restaurants are run. We're going to hopefully be first. Every scale player is going to wind up figuring this out over time. It's going to be an advantage for scale players. I think the gains on profitability that we're talking about here, my prediction, way bigger than that. It makes it easier to train people, to onboard them. It makes it a cool place to work because you're using great technology, which younger workforce expects that you're going to have access to that. If you just think about it as a coach for the team members and for the restaurant on how to operate better, and eventually, it's going to be operating in every part of the business, I think it's absolutely huge.
Like I said before, I've seen what technology can do to a restaurant business. It's going to happen again.
Good morning. Jeff Bernstein from Barclays. Patrick, I think many of us were inspired three years ago by your investment and your message. I think many came today with a similar inspirational hope. I think you didn't disappoint. The talk about the valuation differential between RBI and the industry, I think, is apparent.
That's on you. You got to fix that.
We're working on it. With that said, I'm just curious. I mean, three years ago, you were very inspiring, and you had a very strong management team at the time. I'm just wondering, what do you think surprised you the most over the past three years? I mean, there's always going to be bumps along the way. It sounds like you took a step back, and now you're confident again. You've always had a great leadership team. What are the greatest risks from here that in three years, if things didn't play out, which, again, I think we're confident that they will, what could surprise you over the next three years versus what surprised you over the past 3? Thank you.
I mean, I think there are kind of two questions in there. What was the surprise? We had a couple of things, a couple of businesses that were going to require real resets. Burger King in the U.S. and Burger King China are two pretty big ones. There is nothing else like that out there. I mean, Peter was just talking about Popeyes. Popeyes, the assets are fine, and the cash flow is good. We had one franchisee that I'm sure you saw. They were in a completely different leverage situation than everybody else out there. We just were in a very different place than what we had at Burger King.
Getting Burger King U.S. fixed, we are well on the way there, getting Burger King China into the hands of a committed local partner who's really excited about growing that business, those are really the two biggest things we can do. Tim's, as you recall, I said then, I get questions about Tim's. I don't get why you people are asking questions because it's an amazing business. It has no need to be fixed. It's just going to keep improving. I think that's played out pretty much the way we saw it playing out. Look, there are always things that can happen geopolitically that are going to cause things to go off the rails a little bit, those sorts of things. The overall environment, employment levels are good. I mean, those are the things you look for for the health of a business.
The biggest things is you looked at what do you need to do to get to 5%? The 3%, we'll get the 3%. That part is not hard. The 5%, we laid out the building blocks for getting our NRG there as well and logically as we could. We've got great visibility. As Josh pointed out, I mean, you've got the U.S. and Canada. You've got 10 markets in international. You've got China. Okay. You got 400 left that, please believe us, on international, it's a lot of markets, so we're not going to go through every one of those. Those are going to happen. I feel great about that. What can derail it? I feel like we've put building blocks in place now that are critical and fundamental. Some of those took some time. As Peter was saying, Popeyes, that's quarters, not years, right?
Burger King was years. It required capital, and it required energy and investment from us and a lot of work with the franchisees. Very, very, very different situation for us. We've just got to execute. We do have the right team in place. These are restaurant people up here. Everybody on this stage has well over a decade of experience in the restaurant industry, some of us many decades in the restaurant industry. I mean, we know how to do this. Those fundamentals are in place. Now you look at BK, I mean, we're starting to do some really cool stuff. Whereas the last three, four years, even before I got here, it was really foundational. That stuff takes time. Now it's getting there. I feel like we can start doing some really great things on top of that foundation that'll accelerate things.
All right. Hi. David Palmer, Evercore ISI. Maybe more of a financial question, just doing the mental math about unit growth and the contribution to profit growth as a company, your 3% going to 5%. How many percentage points of operating profit comes from each of those two, where are we starting now? You talked about leveraging G&A, so I would assume 3% gets you more than that in terms of contribution theoretically today. When I think about the mix of units, I think about two different things. The weighted average fee rate is going up, but some of the units that are going to be added to this are going to be more like the China or Firehouse might have a lower AUV. Does this mean two points more profit growth is basically what I'm getting at? Thanks.
Yeah. I can take it and feel free to jump in, Josh. First off, as you kind of think about the build to 1,800 net new units that Josh put out there, not like a huge chunk is coming from China when you think about sort of the percentage on a total basis. If more comes, that's fantastic, right? That's a good thing. It means unit economics are working. The business is doing really well. I think when you think about the AUVs in China, obviously, there'll be a little bit more of a drag relative to the overall AUV of the system. There's a lot of offsets in that 1,800. When you think about Axel growing with his business in Canada, right, that's well above the average.
A lot of the top 10 markets that Thiago Santelmo was talking about, France, for example, huge AUVs that are very accretive to it. The thing I think when you think about flow-through, and this is the way I think about it, is the incremental cost to opening new units, I mean, the marginal margin, if you want to think about it that way, it's basically like 100% flow-through when you think about the bottom line. We talked about royalty rate and kind of how that royalty rate changes over time. When you look at where some of the growth is coming from, if you think about our average royalty rate today, the international growth actually becomes accretive. The royalty rate becomes accretive. Mike Hancock mentioned a little bit about the dynamics there, and that's also accretive.
As you open more Firehouse units, you actually see that bring up the weighted average rate. I think we feel pretty good. I think you may see Josh had referenced, I think, in his prepared remarks around sort of the difference or sort of how system-wide sales relates to NRG plus same-store sales. You may see a little bit of divergence over time as BK China becomes a bigger part of the mix. That'll be more than offset by the royalty rate and the G&A discipline. Yeah. As I was thinking about it, I was thinking back to your bridge where you showed when you get from three to five, there's a part of it with just BK China, which will be a little bit lower contribution per unit. But a big part of that is also it's the Firehouse ramp-up.
There's some Tim's in there, and there's Popeyes. Those tend to be higher contribution units. I think those two things will kind of offset each other to some extent and give you a reasonable balance across the incremental growth as we ramp up restaurant growth. I should also add, as you think about China, right, the same-store sales, I think we were double digits through the back half of last year, right? The AUVs are coming up in that market thanks in large part to the work that Thiago and Ralph and his team are doing there.
I was going to say, if I can go back, I just feel like, Dennis, I didn't go far enough into your question. I just want to add a little bit more to it. I had a chance to think about it a little more.
Maybe if I were trying to frame it to you a little bit, I think we need Axel and the Tim's team to keep doing the amazing work that they've been doing. They've been killing it and delivering great same-store sales. Axel walked through how. Their national business has already been comping over 3%. We got to continue that. You heard all the fundamental reasons why Thiago thinks that'll happen. I think Tom and the team have been outperforming the Burger QSR industry. Now we need to get those absolute same-store sales going. You heard about the elevation work that we're doing. That's what we're really excited about. We've been building the foundations. Now we're going to go very front-footed, elevating the menu. I think that's what can drive some tremendous same-store sales. Peter talked about getting Popeyes back to positive.
We talked about we think we'll do that in the set by the back half of this year. I think Firehouse, which has had good comps, I think can have much better. That's we've got a big lineup of some cool innovations coming that Mike talked about in the chicken and the steak space in particular. I think if we put those things together, that's sort of your path to some really compelling same-store sales across the aggregate business. Sorry that took a few minutes.
Just give us a few seconds.
Just give us a little time. A little slow sometimes.
Thank you, John Ivankoe with JPMorgan. The question is about staying ahead of the investment curve. We spent the last couple of years increasing G&A, increasing CapEx. I'm going to ask this in the question of every company that I think I've ever heard said it was going to be capital-like. The capital intensity is always higher than what was previously guided. The question that I'm going to ask you, that I'm going to challenge you with, is whether G&A 2% dollar growth per year in that $300 million out-your-CapEx number because I love to talk about that out-your-CapEx number is the correct number. $150 million, excluding Tim's in Canada, Tim's Canada being a contractual number, $150 million of CapEx across four global businesses is just not a high number. I mean, you could certainly argue on a piece of paper it's a very low number.
With $150 million over four businesses, are we sure that we're staying ahead of the future investment curve as we sit here today and an analysts say that $300 million is the right number going forward to allow you to stay competitive in what various businesses are spending many multiples of to make their own businesses current? Hopefully, that question lands.
Yeah. Yeah. I'll take it. Guys, feel free to jump in. A couple of thoughts there. I think first off, if you kind of look at the last couple of years, which have been the most capital-intensive, I think you can probably remember since you've been covering the stock, we've been slightly over $300 million, right? We finished kind of in the mid-$300 millions, and we were at $330 million. That's while we were making some of the biggest investments we've ever made behind Burger King Reclaim the Flame and some other things. I think even in those investing years, we were still kind of around that run rate that we pointed out. A couple of other thoughts is the $150 million at Tim's, it's not all contractual, actually, right?
A lot of that is going towards accelerating development, which we think is a really good high ROI decision to go out and accelerate development in Canada. We are making investments there. We're making investments across the business. I think that $50 million bucket that we talked about, which is sort of what we have to play with as other things come up, things do come up from time to time. I think a lot of the big opportunities have been addressed. I think as we think long-term about the business, this is a really healthy level of CapEx to support the business. On the G&A side, I think similarly, right? You look at sort of the G&A step-up that we have had over the last five or six years, a lot of that G&A has rightfully gone into building brand and franchisee support, restaurant support.
I think from a corporate perspective, we've actually been pretty disciplined. I think you're going to continue to see that dynamic, particularly with kind of a lot of the tools that we're seeing. Everyone in this building, right, is using AI every single day. We're seeing a lot of efficiencies come through in sort of the way we support our restaurants from this building. We don't anticipate a ton of growth as we think about this building. Any growth that does come should come from these guys right up here.
John, the thing I'd add on to it is you look traditionally at where restaurant companies have spent money and capital. A lot of it has also gone into technology. We don't have to do that, right? I mean, the old days, as I said, of 500 people in a room coding in Ann Arbor, those are behind us, right? We're using off-the-shelf stuff for the POS system. What we're doing with BK Assistant and Patty, and that's going to be in all of these businesses quickly, that's very low-investment stuff that has a terrific ROI on it. That's not going to be there. You've got a big chunk on Tim's, which has a very high ROI on it. You want us doing that. You had some catch-up on BK, right, that we had to get those assets back on track.
The rest of it is kind of steady as you go. I'm very comfortable with it.
Thanks. Jake Bartlett, Truist Securities. My question was for Tom. It was about the franchise cash flow per store and the growth to $230,000 by 2027. Seems like a pretty high CAGR from where you stand now. That's including the beef headwind. I think it's about 11%-12% CAGR from where you are now. If you assume that beef is going to come down to historical levels, it's still a pretty high bar. It's about a 6% CAGR. The question is what that implies for maybe your expectations on sales growth per store at Burger King, but also if there's any other profit drivers, margin drivers that you think are going to get you to that level.
Yeah. I just truly believe that there are the catalysts in place that will enable us to get to 230,000 a unit. A lot of it comes from the herd rebuilding that's going to start to occur. We've seen a little bit come off in beef prices even recently. Once again, as we continue to do that foundational work and we get that halo or that fortressing effect of all of the parts looking a lot better with the restaurants and all of the parts operating much better, that also is a catalyst for improved same-store sales and also profitability. I think those things all coming together and plus the work that we're doing this year on the menu, this elevation campaign, really making some big news in our core menu.
I mean, you start to add up all those things together, and it's pretty easy to see how we get to $230,000 in 2027. By the way, I personally don't have any intent for us to ever go back to a 4% ad fund rate. Our franchisees, with the way they supported this vote, agree with us that this is the right thing to do. There's a growth mindset in this business now, especially as we've watched some of our peers, that's not going away. I know our franchisees are going to continue to support that. There's very little in the way. There's far more upside opportunities with the things that I just went through than there are downside risks in us getting to $230,000 in 2027.
Look, I'd say broadly, Jay, there is more divergence in the performance of restaurant chains over the course of the last year or two that I've ever seen in my career. There are restaurants that are leaning into growth and improving and reinvesting, and they're getting results. There are people that are on their heels, and they're trying to save their way to greatness, and it isn't going to work. I'm proud of where all five of these businesses are because we are leaning in to generate growth, and we're seeing outperformance across these businesses. Hopefully, it's going to continue to even get stronger.
Thank you. Danilo Gargiulo with Bernstein. Question for Tom. When you started at Domino's, the brand was nowhere near being number one in the pizza category, and then it turned out to be number one. You have some proof points in France where the brand has already almost $4 million AUVs for Burger King. I'm wondering, over what time frame do you think it's feasible to reach the same aspiration of becoming the number one player in the burger category in the United States? Which equities do you think you will need to lean in more in order for you to build the category further?
It takes a lot to try to triangulate when we become number one. It's the right aspirational objective for the system. To be number one, you have to do everything better than everybody else. Your assets need to be best in class. Your menu needs to be best in class. Once again, we have not stepped into the menu to this point, even though I think, and I think many in this room believe, that Burger King has a differentiated menu with flame grilling and all the things that we do to other QSR burger competitors. We haven't brought attention to that. We're going to lean into that more. That's going to accelerate our progress over time. What happens to Patrick's point is I think that brands start to move very quickly in a direction as they get that inertia.
I saw it at Domino's. He led it at Domino's. He could speak to it better than I can. Just living that and watching that has me knowing in the tough times that we've been doing the right things, and it's just a matter of time. The velocity at which it happened was remarkable and shocking. Nobody believed it when he said it. I'm like, "I believe it, and I'm going to say it too. We are going to be the number one burger brand." It was shocking at Domino's how fast that actually eventually occurred. I think I would have sat on the stage a few years from now and talked about how shocking it is, how fast we're moving versus our competitors.
Danilo, it's going to happen a lot faster in a number of international markets than it will happen in the U.S. I mean, McDonald's is their terrific competitor. I have enormous respect for them, and particularly their franchisees. I mean, they do a really good job of running their restaurants. We had some foundational catching up that we needed to do in the U.S. That foundational catching up, for the most part, doesn't exist in international, which is why the progress is faster. If you look at the growth of our Burger King business in international and in specific markets, you're going to see us competing very well with McDonald's outside of the U.S. We can't even think about how we're going to pass McDonald's in the U.S. if we've got restaurants that were built 60 years ago and have had a light refresh along the way, right?
We have to get that done. We've got to be operating at a higher level. Ultimately, how we win is with food. We've got amazing food. Ours is flame grilled. Nobody in this room has ever invited a person over to your home to host them for the evening and fry the hamburger for them. You grill great hamburgers, right? Except for John Ivankoe, apparently, because he lives in a condo building that requires electricity, not gas. We've got foundational work to do here. By the way, when we set out that goal at Domino's, Pizza Hut was 50%-60% bigger than Domino's. McDonald's is like 4x in the U.S., so maybe five. We've got a long way to go. The great news is just the journey of trying to get there creates a ton of shareholder value.
We do see in Thiago's world how we can compete very effectively where we've got the right operators and the right assets, beautiful restaurants. The food carries the day. We've got to get to the point where we're executing as well in the U.S. Progress creates a ton of value for shareholders.
Hi. I'm Sara Senatore. I'm hiding over here from B of A. I have a question, actually, one for Tom and maybe one for Sami. Tom, I wanted to sort of go back to this Sizzle prototype. You're seeing, I think, $2.1 million, I think you said, AUVs from that. That's a big two.
2.2.
2.2. Okay. Even better. That's a big difference from your average volume, I think, which is maybe closer to 1.6. If I think through the flow-through on that, the payback's quite good, or at least kind of four years. Are you anticipating that maybe you'll see an acceleration in remodels based on this through franchisees? I think the extent to which you talked about you have to get to sort of a critical mass. Even just from a contribution to the comp, you probably need a faster rate of remodels to really see that. Does that ROI change how you think about the pace of remodels?
Yeah. A couple of things there. I think the pace of remodels is very often going to be a function of the franchise unit-level P&L. To the extent that we have moved that in the right direction and to the extent that that should move much quicker in the right direction this year, that will dictate an acceleration in the P&L, an acceleration in remodels, because the conviction is there. The conviction is there, and the belief is there in our franchise system. These Sizzle remodels, which do get good flow-through and good returns, that also can contribute to the capacity of the franchisee to go back and reinvest in some of the ones that needed to get work that were lower on the curve. We have to work on cost engineering there as well. We need to remodel this entire system.
We needed to put the money to work where it would get the greatest return first. We've done that. It's giving those franchisees the capacity and the ability to go back and invest in the ones that, frankly, sometimes needed it more, but a percentage uplift there wouldn't get you as much absolute flow-through. I think the way we've played this out is the right way. Certainly, as we move up the ARS curve, those returns continue to get better.
Thank you. Sami, just on the investment-grade sort of targets, why is that important? I guess as you refranchise, you'll be very asset-light. I guess as I think about kind of the optimal capital structure, it feels like you could carry more debt. Is the idea that there's maybe a halo for your franchisees, and therefore, they get the benefit of that? Maybe you could talk a little bit about that.
Sure. Sara, I'm going to stand because this stool is getting uncomfortable. As you think about it, you're absolutely right, and you're thinking about it the right way. I think this business has historically supported higher levels of leverage. We look at the balance sheet today, it kind of being low 4x net leverage. We feel very, very good about where we're at. I think investment-grade has three tangible benefits, which I sort of mentioned, but I'll sort of expand on. I think, number one, when you just think about the size of the investment-grade market, and I think you may have seen it on a slide, it's more than 5x bigger than the high-yield market. It is a deep market.
When you think about sort of the cost of capital of the investment-grade market, I'd say today, actually, spreads in investment-grade and high-yield are actually tighter than they've ever been. It's about a 50 basis point advantage today. When you look over long periods of time, historically, the pricing benefit is actually a lot greater, probably around a 150 basis point advantage of being investment-grade over long periods of time. Then you just think about kind of the duration of that debt, a good chunk of the investment-grade market has 20+ year maturities. There's a lot of tangible reasons to be an investment-grade company. I think fundamentally, when we just kind of think about the business and kind of going to your question, there is an advantage of being corporate investment-grade.
As you think about us as a company and you think about our franchisees, who we work in close partnership with, a lower cost of capital is good for everybody. It's good for systems. That is why some of the name brands, best-in-class folks who Patrick may have just referenced, they're investment-grade. I think there is that benefit. I think for me, as I look at it broadly and I go back to the ownership point, is we think about the business in decades. When you think about the business in decades, I think no matter what's happening in the world, you're always good being investment-grade. Thanks.
Thank you for taking my question. It's Christine from Goldman. I want to take a step back. One of the constant debates, I think, is whether a multi-brand, multi-market platform can generate a meaningful synergy in development and store operations. I think your earlier example on Restaurant Brands Europe was very helpful. Can you help us further bring to life with a few other examples on the key advantages of your franchisees when operating multi-brand and country combinations? Thank you.
Thanks, Christine. Maybe I'll start. Thiago, if you want to give any of your favorite examples, please feel free to do so. When I walked through kind of the key advantages of our platform, the first one I started with was the ability to take brands global because I think that's the clearest, most valuable, most tangible one. I think you've seen that with us where we've acquired new brands that didn't have much of a global footprint, and we've been able to take them global at scale and build really remarkable growth. If I go back to Popeyes when we acquired it, I mentioned we were in 20-some-odd markets. We were very thin in those markets. We didn't have any of the infrastructure. We didn't have really structured or well-capitalized franchisees.
It was sort of a 300-restaurant, pretty stagnant business that wasn't going anywhere. I think what we were able to bring to the table is a team all around the world. Thiago has hundreds of people stationed all over the world who have lived the restaurant business in those markets. Then we've got this network of partners who we can talk to, not just the ones we're working with, but we know everybody else in these markets. It's allowed us to take Popeyes and our other brands around the world in ways that they would never have been able to do on their own.
I think you can see it in the brands that we've acquired, but I think you could see it in other brands that it's been very hard for anybody else to really build a scaled global business after the first few brands built them. I think that's a really unique characteristic of RBI. It's something that allows us to create a lot of value with the brands that have joined the family. I don't know if you want to add any specific examples of ways we were able to do that.
Yeah. I think you covered the main points. I think just to give a bit more color to the infrastructure that you said, right? Launching any of the new brands internationally requires a lot of work from our quality assurance teams or procurement teams or our few teams.
It would be really hard to do that from scratch. We already have that for Burger King, plus the network of vendors that we have. Our few teams, they have deep understanding of their regions, which helps a lot every time we need to introduce a new brand, not only to introduce but also to navigate the different challenges that they will face because we can understand the market from different angles.
Yeah. I think I was just thinking of the example of when we took Popeyes to India, that would have been an awfully challenging thing to do if you didn't already have a big international structure out in Asia. We have folks that have worked in the India QSR market over a number of years from our Burger King experience who could go and work with the local partner, figure out how to adapt the concept.
They have an understanding of how much you need to change. They know the whole supplier network. They know how to find local suppliers in India that can meet our criteria. We have quality assurance folks who know how that part of the world operates. They live in that market all day long. Our ability to support a local partner to launch one of these brands and then support it to become successful, and it's very hard and it takes a long amount of time, I think that's a very unique benefit of our structure.
I'd add one more thing, which is Paul Lacy-Smith, who's in the back corner there. He and his team have done an amazing job of leveraging our scale across the brands for purchasing power. We buy a lot of chicken. We were serving with our great friends and partners at Coca-Cola a lot of Coca-Cola products, but we didn't have a single contract in the U.S. We had multiple contracts. We buy a lot of paper products. I mean, you think through our businesses, there are a lot of things that we buy that our scale is and leveraging that scale. The number that we put out this morning, I mean, Paul and his team have found $700 million of synergies for our franchisees that's increased their cash flow by that much a year that they can then reinvest into the business. It's powerful. It's really powerful.
That team has been unleashed the last few years, and they're doing a remarkable job of creating value for our franchisees and master franchisees to give them competitive advantage where they're competing.
Hi. This is Lauren Silberman from Deutsche Bank. I wanted to ask about Restaurant Holdings. Two-part question. One, you're planning to refranchise, I want to say, 500- 700 BK units over the next couple of years. Big number. What visibility do you have into the pipeline of operators that will take over these units and the due diligence that you're doing around them to make sure they are the right operators, given how much work you've done, to strengthen the system? The second part is for Popeyes China, Firehouse Brazil. Are those businesses ready to be moved to a partner, or is there still work to be done at the corporate level?
I could start, Tom, feel free to jump in. On the first part of your question, Lauren, and thank you for the question, when you think about the amount of visibility we have into kind of refranchising pipelines, actually, that's precisely why we did pull up the timeline, is actually we have a ton of visibility into sort of great operators who are out there who want to acquire restaurants. I think Tom, Josh, and I sit in a weekly meeting where we go through the operators. Tom meets every operator. We often sometimes meet operators as well. This is sort of a cadence and structure that we're looking at pretty regularly.
We have a ton of confidence because I think some of the videos showed it, Chris Johnson up there talking about how there's so much enthusiasm right now to become part of this brand who's on the precipice of doing something really, really cool in the industry. We feel pretty good about the pipelines. I think on the timeline, and I do want to be clear about this, sort of the idea of kind of collapsing or winding down Restaurant Holdings out of your model, that is a modeling sort of guidance type of thing. If we have a few more restaurants in sort of what were formerly Carrols restaurants, we'll pull them into the P&L. We want to make sure that the restaurants get into the hands of the right long-term local operators. That is the most important thing.
We're not going to sacrifice anything on that. We want to do this once, and we want to do it right. Tom, I don't know if you.
I won't opine on Brazil, but I will say, just to add to what Sami said and why you might hear a little bit more optimism on that refranchising side, is where I've seen the outsized surprise for me has been on the internal people, the people that are in Burger King and in RBI that are raising their hands and saying, "Hey, I'd really love to get involved in this story." Frankly, what better testament to what we're doing than that? These are people who see how this work goes every day. They see what this management team is focused on. They see the underlying strength of the brand starting to grow. They want to push all their chips into the middle of the table and get involved.
Maybe it creates a little bit more work for the HR team because we've got some hiring to do. They're happy to help. Yeah. I'll just add on Popeyes China. I think Firehouse Brazil is relatively smaller. Popeyes China is the bigger one of the two. Rafa, who's here in the room, runs our Asia-Pacific business. Him and his team have made a lot of progress in the last year or so since we took over Popeyes in China. Already, we're building units that are delivering good sales and much better paybacks in unit economics. We've got much more attractive rents. I think the stores we're opening now are much better than the ones we were opening before. I think we've got we built in some time here.
A year and a half, two years is an awful long time in China for us to make some more progress and then work on finding a new partner there.
Hey, guys. Zach Fadum, Wells Fargo. I've been asked the GLP-1 question. Just thoughts on industry impact. Is it a drag? Is it an opportunity? Maybe talk about how each segment is positioned.
I'll start, and anybody else, feel free to add here. I think our point of view so far is that the adoption is not high enough. There's not enough people on it right now that we can really see it manifesting itself in our business. It's hard to say that it's impacting us today. Always possible that it will in the future. The way I've thought about it, at least, is we're always evolving our products. If consumer preferences move, just like people move from we move from hot coffee at Tim's to cold coffee, we're always going to pay attention and figure out how we adapt. I always like to make a plug for my favorite product, the double cheeseburger at Burger King. It's a very protein-forward product.
You can adjust kind of the things you focus on and the products that matter most to however consumer preferences adapt. Anybody else want to add anything there? I think.
I'm sorry, too.
Maybe less relevant to some of our businesses than others. I think of the Tim's business, heavily beverage-focused, probably a little bit less relevant. maybe.
We also have Timbits so far.
Yeah. I would just put some numbers around it, right? I mean, if you think about kind of collective operating income represented on this stage, you think about Tim's in Canada, right? Coffee, generally, coffee-forward occasion, generally less impacted if you look at the data and read all the reports. You think about the international business, right, where you haven't seen GLP-1 adoption really kind of take off yet. That's like 70% of our AOI that I think is relatively well inflated. Of course, we always have to adapt and figure out the right menu options to Josh's point. I think we feel it always comes back to what Josh opened with, which is the diversification, the breadth of this business is unparalleled. It's what makes us a world-class company. I think tell me if I'm wrong. I think we're going to try to wrap up Q&A.
We're in the.
Just one more question.
Okay. One more. Okay.
Sorry. Just one more question. Then we're going to wrap up Q&A because we've got food upstairs, and we don't want it to get cold.
I was going to say we're in the business of serving hot, fresh food, and we do not want to do that wrong today, so.
All right. Well, thank you. Brian Mullan, Piper Sandler. Just a question about Tim's in Canada. The system got back to net unit growth last year. From today's presentation, it sounds like that's going to continue. Can you just elaborate a little bit on the opportunity? Is there demand from existing franchisees? Is this about recruiting new franchisees? In addition to the slides, you showed some geographies where you might be underpenetrated. Anything else you'd point out that helps unlock this? Is it new formats or anything else that gives you confidence?
Very good question. Happy to go a little bit into that. Region-wise, we have less density in the West and in Quebec, for example, than we have in Ontario or the Atlantic. That has to do a bit with our history. Founded in 1964, we only really in 1978 went into the western parts of the country. We are just less dense there, and that creates a nice opportunity. Then we like to grow with existing owners that we have in the system or second generation or restaurant managers of current restaurants. Really, a lot of people earned the right to grow in the business. That is a nice opportunity. The density that we have today, you've seen on the slide earlier, 10,500 Canadians per restaurant. We believe that this can be denser through different types of formats.
Our preferred format is the standard drive-thru restaurant. This will be the majority. We also yeah. In some parts of the country, we need pressure relief valves, kind of. Those will be done with smaller formats as well. Yeah, it's a combination. Mostly, our preferred model is the standard drive-thru, which we see quite a bit of opportunity for. Brian, I'd add here, right?
I think the real estate model is a little bit different in Canada than it is kind of for our other home markets. We put a lot of the capital into these. Ultimately, we control a little bit more sort of how the growth works. Ultimately, the paybacks are what drive everything, right? The paybacks are less than three years for our franchisees. As long as.
There's demand.
Exactly. There's demand. As long as we have the right franchisee in the right area, there's opportunity.
Great. Well, thank you, everybody. I want to say one last thank you very much for joining us today. We tried to do our best in this session to paint as clear of a picture as possible about what we're working on and where we think the company is going in the future. We think it's a pretty compelling vision of the future. We all, as a team, everyone in the room and around the world, are really excited to work on it. We appreciate your feedback and your questions throughout, and we especially appreciate the support of all of our shareholders who are here and on the line. Thank you very much for joining us. We're all going to go upstairs to the fourth floor for lunch.
We look forward to answering any other questions you have and continuing to update everyone as we progress in our plan over the coming years. Have a great day.