Burger King to overhaul ordering experience at 6,000 US restaurants

Burger King said on Tuesday it is investing $300 million to add self-order kiosks to another 1,100 restaurants - meaning more than 6,000 outlets are to have them soon.

It is the latest stage of the fast food chain's bid to revamp outlets and cut costs - with kiosks potentially leading to fewer staff and lower wage expenses.

The announcement came as Burger King reported higher-than-expected US sales in the first three months of the year - suggesting that initial efforts to modernize are paying off. 

Bosses now says the company has plans for 85 to 90 percent of its 7,000 outlets across the US - around 5,950 to 6,300 - to get the new ordering technology in the next four years. 

It had quietly announced at the end of last year it would roll out out the self-service kiosks but it was scant on the details and did not provide a number at the time. Today it gave more details.

All the new locations will have self-order kiosks, said Tom Curtis, president of Burger King US. 

Burger King will invest $300 million to add self-order kiosks to over 1,000 more locations

Tuesday morning the chain's owner Restaurant Brands International announced it will support the updating of 1,100 franchise locations by 2028. 

Total spending on revitalizing the brand is set to hit $2.2 billion.

So far, around 100 Burger King locations have been updated with the so-called 'Sizzle' design in a bid to get customers to buy more Whoppers and fries.

The restaurants, which also feature drive-thru pickup for mobile orders, have seen sales climb following their renovations, Curtis told CNBC.

It comes after franchisees in California said they were already replacing staff with the digital ordering kiosks as a way to cut costs after the minimum wage in the state was increased to $20-an-hour.

Harsh Ghai, a major Burger King franchisee with 140 restaurants on the West Coast, said earlier this month he plans to have digital kiosks in all of his locations in two months. 

Until the groundbreaking wage hike, he planned to roll them out over the next five to 10 years. 

All the new locations will have self-order kiosks, said Tom Curtis, president of Burger King US and Canada (Pictured)

The minimum wage was increased from $15.50 to $20 per hour at the beginning of April for workers at chains with more than 60 locations in the US. 

Since it came into effect, workers have already complained of getting fewer hours - and some have been laid off.

Staff at Pizza Hut and Round Table have already lost their jobs after bosses said they could not afford to pay the higher wage.

McDonald's, Chipotle and Starbucks warned they will pass on the extra costs, but Burger King operator Ghai says putting up prices risks losing too many customers.

He said over the past year he had put prices up by between 8 and 10 percent - compared to between 2 and 3 percent in a normal year.

'The majority of that is going to get absorbed in the inflation of our food costs,' he told Business Insider. 

'So we're not even compensating for most of the labor costs that we're going to be experiencing with this legislation.'

Burger King franchisee Harsh Ghai plans to have digital kiosks in all his 140 restaurants on the West Coast

He added that any more price rises are 'going to result in a significant impact to our traffic' - so he has found another way to cut wage costs.

'We have kiosks in probably about 25 percent of our restaurants today,' he told the outlet.

'However, the other 75 percent are going to have kiosks in the next probably 30 to 60 days.'

Under his previous strategy to roll out kiosks more slowly - only adding them to new restaurants or those being remodeled - it would have taken five to 10 years.

'But now we are just going ahead and installing the kiosks in every single restaurant in response to the legislation to be able to balance some of these labor costs that are hitting us,' he added. 

Burger King, which was founded in 1954, said franchisees who opt in to remodel their locations will receive funds once construction is completed. 

It said it will let operators choose how much of a discount they get on the royalties they pay to the company, according to CNBC.

In 2022, the fast food chain announced a major revamp initiative - which included investing $250 million in renovating locations and upgrading ordering technology

In January, parent company Restaurant Brands bought Burger King's largest franchisee, Carrols Restaurant Group, for $1 billion. 

It estimates it will also spend $500 million updating its 600 locations across the US.  

Alongside the $250 million investment in renovating restaurants, the company has also put an additional $150 million into its mobile app and advertising.

Burger King admitted to falling behind its major competitors during the Covid-19 pandemic.

Customer numbers fell, visitors complained of shabby locations in need of major updates and improvements to overcomplicated ordering experiences. 

In the first quarter of 2024, same-store sales in the US and Canada grew 3.8 percent. 

Self-order kiosks are not a new sight in major fast food chains - and the rollout gained major momentum during the pandemic. 

Panera Bread led the way in 2014 by introducing self-service kiosks in all locations, and in 2017 McDonald's followed suit. 

By the end of last year, Shake Shack had equipped all its locations with the tech.