Burger King's Q2 2025 Earnings: Contradictions in Sales Performance, Refranchising, and AI Strategy

Burger King U.S. comp sales performance and remodel impact, refranchising process and franchisee engagement, Carrols refranchising process, AI and operational efficiency, and impact of competitor activity on Burger King U.S. are the key contradictions discussed in Restaurant Brands International's latest 2025Q2 earnings call.



Strong Performance of Tim Hortons and International Business:
- Tim Hortons, which accounts for 43% of RBI's business, reported Canadian comparable sales accelerating to 3.6%.
- The International segment delivered nearly 10% system-wide sales growth, supported by 5.4% net restaurant growth and 4.2% comparable sales.
- This was attributed to balanced playbooks across menu innovation, marketing, digital, and operations, driving strong performance in major markets.

Focus on Operational Improvements:
- Burger King's same-store sales grew 1.5% in the U.S., outperforming the burger QSR segment, with operating satisfaction for lunch and dinner rising by 4 points year-over-year.
- Burger King China's comparable sales turned positive in Q2, and unit economics improved significantly quarter-over-quarter.
- These improvements are due to the execution of consistent operational strategies, including enhanced customer friendliness, food quality, and speed of service.

Impact of Bad Debt Expenses and Commodity Inflation:
- Bad debt expenses for the quarter were $9 million, primarily in the International business, impacting F&P expenses and supply chain cost of sales.
- Beef prices contributed to a mid-single-digit increase in the total commodity basket for Burger King U.S.
- These headwinds were partly offset by cost discipline and timing, with expectations of beef price normalization over time.

Strategic Initiatives and Customer Engagement:
- RBI launched the Carrols refranchising efforts two years ahead of schedule, moving towards more simplified business models.
- The company’s digital initiatives, particularly in the International segment, have driven consistent outperformance against global peers.
- These strategic moves are aimed at enhancing guest experiences, franchisee profitability, and creating a more simplified business structure.