In the United States, more Burger King restaurants continue to disappear, with closings in July hitting the highest level since January when 124 locations were shuttered in only 26 days. While its main competitors reveal expansion plans and report profit growth, the financial situation of the royal burger chain can only be described as a train wreck.

The company is failing to attract new customers, catch up with its rivals, and dig itself out of the hole it has fallen into during the pandemic. At this point, everyone in the industry is asking where did Burger King go wrong. Luckily for us, newly reported data show exactly why the fast food giant is facing one of the worst losing streaks since its foundation in 1954.

As other fast-food chains started to get back to pre-pandemic levels, Burger King’s sales and traffic fell steeply, and its financial results continued to disappoint. Over the past two years, sales at Wendy’s jumped 18% while McDonald’s saw sales grow by 25%. In contrast, at Burger King, sales went up by a meager 8%.

During a second-quarter earnings call, Josh Kobza, CEO of the chain’s parent company Restaurant Brands International, said that one of the reasons why Burger King is still struggling comes down to new guest visits. Kobza revealed that foot traffic in the first two quarters of 2023 was negative, and most of the earnings growth experienced by the company was fueled by higher menu prices, not by new customers.

Meanwhile, retail experts point to its ongoing woes with the health and profitability of its franchisees as the biggest issue facing Burger King. In a single year, the four biggest fast-food operators in America, including TOMS King Holdings and Meridian Restaurant Unlimited, whose portfolio was mainly composed of Burger King stores, have filed for bankruptcy citing declines in foot traffic and revenue, as well as ‘systemic’ profitability issues.

After shuttering 53 locations in June, 133 restaurants closed doors for good in July, the highest number in seven months. So far, the burger chain has permanently halted operations in 450 locations, 50 more than its initial target.

The vast majority of restaurants have been forced to increase prices to compensate for higher inflation, But Burger King has taken price increases to a whole other level. In a survey conducted by MoneyGeek of 145 chains in 50 cities, the price for a burger, fries, and a soft drink rose 9% on average in the past year. From 2022 to 2023, the price for a meal at the chain rose 21%, from $6.76 to $8.18.

A few months ago, its parent company, Restaurant Brands International, made a strategic hire that laid bare exactly how nervous executives and shareholders were about its economic prospects. Patrick Doyle was formerly the CEO of Domino’s and he is commended by the chain’s drastic turnaround.

Doyle announced plans to “put the heat back into the brand” with a $400 million initiative called “Reclaim the Flame.” Burger King is going to spend $150 million in advertising and digital investments and $250 million in a “Royal Reset” involving new restaurant technology, equipment, and infrastructure. In other words, executives are admitting that the chain is in desperate need of restructuring on every front, from its products to its brick-and-mortar locations.

Hopefully, this initiative shows satisfactory results soon, because up until this point in 2023, Burger King is just getting burned.

Article and video cross-posted from Epic Economist.

New data reveals that Burger King is falling behind major rivals, including McDonald’s, Taco Bell, and Wendy’s, as revenue shrinks and its restaurants continue to lose popularity amongst US consumers. The numbers indicate that the company’s problems are getting exponentially worse in 2023. That’s why today, we are going to expose the factors that are accelerating the demise of this popular brand.

Not one or two, but three major Burger King operators have filed for bankruptcy so far this year. The biggest franchisees in the state of Ohio, Utah, and Michigan have reported severe cash flow problems and a steep decline in foot traffic, sales volumes, and profits for years. They have been operating several stores at a loss, and about 400 of them are going to close doors for good this year. In addition, the company’s executives shuttered 124 underperforming locations between January and May, and another 63 restaurants were eliminated from its portfolio last month, according to reports released by Restaurant Dive.

In all, roughly 10% of Burger King’s 7,400 locations in America are likely to disappear in 2023, industry estimates reveal. Right now, corporate executives are pressuring collapsing franchisees to sell their stores to other operators instead of closing them, which could result in financial losses to the tune of $300 million. Last month, the company joined a filing alongside various creditors and vendors, to force a sale of the remaining units managed by struggling franchisees.

The fast food chain’s US store profitability has been declining for over a decade now. In fact, between 2010 and 2020, Burger King’s annual revenue decreased by 36%. In 2010, the brand made an average revenue of $2.5 billion, whereas that number was only $1.9 billion in 2022. Even before the COVID-19 Pandemic Burger King began to see a concerning decline in revenue. For instance, between 2012-2013 alone, the company’s revenue fell by 41.6%.

The Buy One, Get One for $1 and 2 for $6 promotions on Whoppers and chicken and fish sandwiches proved to be much less popular than the 2 for $5 deal the chain had in 2020, creating a “considerable year-over-year gap” in BK’s earnings.

Despite the strategy shifts announced by the chain, those moves didn’t seem to be enough to help effectively boost its sales. In June, Burger King’s domestic same-store sales grew by 1.1%, but this was a very disappointing gain when compared to its biggest competitor McDonald’s, which grew its sales by 15%. Not to mention, Burger King lost its spot as America’s second-largest burger chain. In 2021, Wendy’s surpassed Burger King to become the nation’s No. 2 burger chain by sales. According to Technomic data, Wendy’s system sales increased by 4.8% last year. Burger King, meanwhile, dropped by 5.4% to $9.6 billion.

It’s clear that the industry giant is not as financially healthy as we all thought and if there’s something that we learned from the retail apocalypse and the bank collapses of earlier this year is that there’s no company that’s too big to fail. A few bad quarters can bring down an empire that has been built over decades, let’s just hope that’s not the case with Burger King.

Article and Video cross-posted from Epic Economist.