QSR DECK TODAY @12:30
Restaurant Brands (QSR) Long THESIS:
- RBI Is Not Domino's In 2010: Patrick Doyle stepped down as CEO of Domino's in 2018 and is credited with one of the best turnarounds in restaurant history. He guided Domino's as it recovered from near bankruptcy to become one of the industry's most desirable brands. Patrick Doyle came out of retirement to join Restaurant Brands International as executive chairman. He invested $30 million of his own money into the company, purchasing 500,000 RBI shares, and received a package of stock and options that tied him to the company for five years. RBI is not in as bad shape as DPZ was back in 2010. QSR has unperformed nearly all of its restaurant peers since coming public on the heels of being miss managed by its primary shareholders.
- Can Burger King be fixed? The story of where Patrick Doyle can have the most significant impact is around Burger King. He thinks the Whopper is the best burger in the business. Not only does he think the Whopper Burger King's biggest strength, but he believes it's the chain's critical competitive advantage as it goes up against McDonald's. "That is ultimately how we compete effectively with them: we've got great food. We need to do all the rest of those things as well as they do, and then I like our odds. "This is not going to happen over night and McDonald's is a great competitor that have been excelling since before the pandemic and the pandemic made the company stronger. An acceleration in BK sales and profitability suggest that MCD will slow.
- Getting past 3G & New Intangibles: There have been several significant changes at RBI in the last six months. Reclaim the Flame, Patrick Doyle; changes in the C-Suite; 3G sells a significant part of RBI. 3G still controls the board, but they are pulling back. Changes can bring on new challenges, but as we have seen with changes at PZZA and CMG, significant changes can also reward shareholders. What are the intangibles of the Patrick Doyle leadership style that made him so successful at DPZ? Will RBI's new direction help motivate the system to improve operations? Can Burger Kink be fixed?
Burger King is celebrating the return of Melts to its menu by putting together four new Digital Exclusive Melt Meals priced at $7 each. The new $7 Digital Exclusive Melt Meals (small) lineup includes:
- Your Melty Pleasure Small: A Classic Melt with extra cheese, 4-piece Mozzarella Sticks, and a drink.
- Let's get this Bacon: A Bacon Melt with extra bacon, fries, and a drink
- The Spicy One: A Spicy Melt with extra jalapeños, 4-piece Chicken Nuggets with Buffalo Sauce, and a drink.
- The Ultimate One: A Bacon Melt with jalapeños, fries, and a drink.
Here's a closer look at BK's returning Melts lineup:
- Classic Melt: Two slices of toasted bread layered with two flame-grilled Whopper Jr. patties, melty American cheese, caramelized onions and Stacker Sauce.
- Spicy Melt: Two slices of toasted bread layered with two Whopper Jr. patties, topped with melty American cheese, jalapeños, caramelized onions and a creamy, spicy sauce.
- Bacon Melt: Two slices of toasted bread layered with two Whopper Jr. patties, melty American cheese, crispy bacon, caramelized onions and Stacker Sauce.
All four $7 Digital Exclusive Melt Meals can be found at participating locations nationwide when ordering online on BK.com or through the BK app.
RRGB IS A SHORT AGAIN
RRGB is up 109% so far in 2023 on the back of the new CEO's GJ Hart ability to execute a turnaround given his success at TXRH. But what about the other seven jobs he has had? In his past career, he occupied the position of Chairman, President & Chief Executive Officer for California Pizza Kitchen, Inc., which went downhill and ultimately filed chapter 11 in 2020. He left CPKI to join Torchy Tacos in 2018 and did not demonstrate any particular repositioning or turnaround skills with either company. In fact, his time at Torchy may have been a complete disaster. At the time, Mr. Hart was hired to aggressively expand one of the hottest fast-casual concepts at the time ( AUVs = $4MM) into markets outside the core of Texas and adjacent areas. Apress release in November 2021 said that Mr. Hart was leaving EFFECTIVE IMMEDIATELY. We both know what those two words mean.
