Restaurant Brands International targets global expansion with Popeyes - The Average Joe

    Restaurant Brands International targets global expansion with Popeyes

    Kevin Roche — Analyst

    Kevin Roche — Analyst

    March 25, 2021

    March 25, 2021

    In 2019, Popeyes’ chicken sandwich took the world by storm — going viral and leaving customers wanting more, so much that Quavo tried selling second-hand sandwiches for $1k each.

    Restaurant Brands International ($QSR), the owner of Popeyes, Burger King and Tim Hortons, is now looking to take that success internationally.

    How COVID impacted restaurants differently…

    • Smaller independent restaurants struggled with over 100k shutting down by Sept. 2020 (15% of all dining establishments).
    • Large chains with stronger delivery/drive-thru presence held up much stronger

    Like many other restaurant operators, the pandemic sent RBI’s stock plummeting over 50%. Unlike others, RBI survived the pandemic much stronger.

    It’s almost as if RBI had been preparing for COVID since 2018 — ramping up its mobile ordering, delivery services and drive-thrus. In 2 years, the total number of drive-thrus went from a couple hundred to over 10k.

    At the peak of COVID, sales were only down 25% in the 2nd quarter of 2020 – which quickly recovered by the end of the year.

    Force-feeding the globe with Popeyes

    RBI has aggressive plans to grow from 27k restaurants to over 40k within the next decade but there’s just one problem — RBI doesn’t have the best track record with its past brands:

    • Tim Hortons went through several years of fighting with franchisees who sued RBI for alleged price gouging in 2020.
    • Burger King struggled with competition from McDonald’s and Wendy’s and launching products that failed to catch on.

    Their solution: Acquiring Popeyes in 2017. And now, they’re capitalizing on Popeyes newfound popularity through aggressive expansion:

    • First Popeyes launched in China on May 15, 2020 — with plans to open 1,500 more
    • Plans to launch 100s of Popeyes in Mexico in partnership with JK Capital and a UK debut expected for 2021.

    If RBI wants to succeed in China, it’ll have to go up against Yum! Brands ($YUM) owned KFC — which has 7x more stores than Popeyes worldwide and is massively popular in China.

    For investors… Taking the spicy chicken across the seven seas

    With landlords desperate to fill vacancies and consumers itching to get out, RBI is seizing the chance to expand.

    For those hoping to get in on the recovery of the restaurant industry, RBI’s growth mission could make for a tasty option — that is, if you’re confident that their restaurants will catch on overseas.

    The real question is… Who’s got the better chicken, Popeyes or KFC?

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