Restaurant Brands International’s chief executive officer Jose Cil stated that like so many others, he had been reflecting on what the world has lived through for the past few weeks. It has been faced with dozens of challenges and decisions that it hasn’t had to deal with before in our lives or careers. And these are exactly the times when one has to turn to his/her values to guide him/her to do the right things.
In early March, just as COVID-19 was beginning to escalate, the company decided to postpone its two-day global senior leadership meeting until a later date. It still invited all its senior leaders together on video conference for just one hour to talk about the single most important agenda item that we felt could not wait – the evolution of our six company values.
“Over the last 10 years, the company has rapidly evolved as a company with the acquisition of the Burger King brand in 2010, Tim Hortons in 2014 and Popeyes in 2017. The leadership team it has today is an awesome mix of long-term and new leaders; a group of people with vastly different styles and approaches; but also, a group of people who have spent the last few years working very closely together to shape the company into what the company is today,” Cil said.
“The evolution of our values couldn’t have come at a better time in our company’s history, he added, stating that the following were just three of the values that he has personally relied on to guide the many decisions that the company has taken in the past few weeks:
? A wide range of voices and perspectives make us stronger: This has proven to be invaluable as we have widened our circle of influencers and brought more diverse voices and perspectives to the table for every tough decision we have made
? Find ways to do things differently to make them better: This crisis has forced all of us to be innovative and creative in solving problems quickly and rolling out solutions that make the current situation better for our guests, restaurant owners and team members
? Be a hard-working, good person: The idea of being a good person has come up a restaurant lot. And when we have struggled with difficult decisions, in the end it has always come down to simply doing what you would expect a good person to do
“The company has been frequently communicating over the past few weeks with its guests, employees and restaurant owners, and it also wanted to provide an update to its investors, suppliers and other valued partners on all of its ongoing efforts to help confront this crisis and make the best long-term decisions for its business,” Cil said.
“The typical format to do this would be a press release, but given the extraordinary circumstances, it felt more fitting to share with the stakeholders Restaurant Brands’ thoughts as a company in an open letter. Our goal is to provide a direct and candid perspective on how we have organised ourselves and our resources to work through this greatest of challenges,” he added.
“I want to start by emphasising how exceptionally proud I am of all the company’s teams that have been working around the clock to support its guests, restaurant owners and team members. While the entire world is reeling from this unprecedented crisis, they should know that the company is well-positioned to weather this storm, continue supporting the thousands of restaurant owners around the world and be there for their guests as they need them,” Cil said.
Across all three restaurant brands, Burger King, Tim Hortons and Popeyes, the company has focussed on the same five priorities during this crisis:
? Supporting the health and well-being of hundreds of thousands of team members around the world
? Enhancing restaurant hygiene and safety procedures
? Continuing to serve our guests around the world safely and where it makes sense
? Supporting our restaurant owners around the world
? Giving back to the communities where we all live and work
Additionally, the company is maintaining a strong balance sheet and thoughtfully managing its liquidity, so it can exit this crisis well-positioned to continue its journey of global growth with its dedicated partners around the world.
Cil shared just some of the work our teams have been doing in each of these areas, which is as follows:
Supporting restaurant team members
“The company deeply committed to supporting its team members around the world and care greatly about their health and well-being. Each day, it strives to make a difference, both through the actions we take directly with its corporate employees in its offices and restaurants, as well as through its initiatives to support all of the team members who work for its thousands of restaurant owners around the world,” the company’s chief said.
“At Tim Hortons in Canada, it have partnered with our restaurant owners across the country to establish a $40-million CAD employee support fund to continue paying team members affected by COVID-19 for up to 14 days, so that they can stay home without worrying about providing for themselves or their families,” he added.
“Similarly, at Burger King and Popeyes in North America, the company is providing paid sick leave for up to 14 days to team members in corporate-owned restaurants who have been diagnosed with COVID-19 or have been asked by the restaurant manager or a medical professional to self-isolate. It is also encouraged our restaurant owners to use this difficult time to invest in their team members for the long term and have been heartened to see so many do so,” Cil said.
“In addition, it is paying a special bonus in April to all corporate restaurant team members in North America across its three brands to recognise their tremendous service to our guests and communities during this difficult time,” he added.
“The company is not stopping there, however. Since this crisis began, it has been working tirelessly with industry associations and federal and regional government officials in the United States and Canada to advocate for expanded support for all employees affected by the COVID-19 crisis,” Cil said.
Enhanced hygiene and restaurant safety
“The company is deployed stringent cleaning and hygiene standards at all restaurants and have continuously enhanced them, so that its restaurants are some of the safest places for guests to get food during this crisis. Some of the measures it have taken include sanitising all high-contact surfaces with increased frequency and making hand sanitiser available for team members and guests.”
“The company has also implemented comprehensive social distancing procedures for team members and are in the process of deploying 15,000 infrared thermometers to all Burger King, Tim Hortons and Popeyes restaurants to confirm that team members are healthy as they arrive for shifts,” Cil said.
“It has benefited from the trusted, global expertise of its in-house quality assurance team, which has always provided exceptional oversight and guidance across all of its procedures as it undertakes to be best-in-class in our industry on health and safety. This has never been more critical than over these past few weeks, and I wanted to call out their incredible contributions,” he added.
Continuing to serve guests around the world
“In addition to the work it is doing to ensure the health, safety and well-being of its teams and guests in its restaurants, it is also working closely with government officials to keep its restaurants open,” Cil said.
“Given the unique format of quick-service restaurants and the low-touch options offered through the chains’ drive-throughs, delivery and mobile order and pay/pick-up capabilities, the company believes it can play a vital role in feeding Americans and Canadians and millions of others around the world as it practices social distancing in an effort to flatten the curve,” he added.
“It has expanded the availability of home delivery across all three of its restaurant brands, including through its own internal delivery channels on the Burger King and Popeyes apps in the US. In the coming weeks, the company will also be rapidly scaling its delivery coverage in Canada for Tim Hortons restaurants through its partners,” Cil said.
“At Tim Hortons, the company is also introducing enhanced mobile pick up functionality on its app, and along with Popeyes and Burger King, it will soon launch safe operational procedures for curbside takeout or front-door takeout. With this new feature, team members will walk orders out to guests who cannot access our drive-throughs, including truck drivers and guests arriving on foot,” he added.
“In support of these initiatives, the company’s in-house digital team has done great work to rapidly expand and enhance our online ordering platforms for all three brands. At the same time, its marketing teams have quickly pivoted to redirect our substantial marketing efforts to focus on the importance and safety of its mobile app, delivery and drive-through channels, in addition to other major health and safety measures like contactless payments,” Cil said.
Supporting restaurant owners
Restaurant Brands International is one of the largest franchisors of restaurant brands in the world, and it takes its responsibility to ensure the financial health of our restaurant owners very seriously, particularly during difficult times.
The company is working closely with all its restaurant owners around the world to make sure they have access to appropriate sources of liquidity in order to sustain their businesses throughout this crisis.
In many markets around the world, including North America, it is advancing cash payments and rebates to restaurant owners so that they have this much needed cash when they need it the most—right now.
“In North America, this represents approximately $70 million of available cash advances. The company is are continuing to look for other payments due to restaurant owners later in the year that can be advanced now. These initiatives have allowed it to unlock thousands of dollars of immediate liquidity per eligible restaurant,” Cil said.
“For approximately 3,700 eligible locations where the company property control at Tim Hortons in Canada and Burger King in the US and Canada, it has temporarily converted our rent structure from a combination of fixed plus variable rent to 100 per cent variable rent, which provides relief in the face of declining sales,” he added.
Cil said, “In addition, the company is deferred rent payments for up to 45 days to provide tens of millions of dollars in much-needed working capital to its systems. It is also contacting all of its landlords in North America to seek further assistance that will be passed along to its restaurant owners as it receives it.”
“Alongside these initiatives, the company knows that capital expenditures for new restaurants, remodels and significant equipment deployments often constitute the largest near-term cash outlay for our restaurant owners. Therefore, it is pausing obligations for all of these programmes until it has greater visibility into the severity and duration of this crisis, which will create significant relief on the restaurant owners’ cash flow,” he added.
In an effort to provide additional support and drive further liquidity initiatives, the company established restaurant owner liquidity support teams across all three of its brands to work one-on-one with restaurant owners and provide guidance on all the items covered above, as well as how to engage with lenders to adjust debt service schedules.
“The company has also established teams to expedite access to recently announced emergency stimulus programmes in the US and Canada, which it believes will provide significant support to its restaurant owners, the small business owners that have helped build the great brands that it owns,” Cil said.
Supporting our communities
The company’s network of franchised restaurants is unique in that it is operated by small and independent business owners around the world who are deeply involved in their communities. It and its restaurant owners are stepping up to support those communities through each of its brands during this crisis.
Burger King in the United States is offering two free King Jr kids’ meals with the purchase of any adult meal through its app. Many guests are struggling – especially those who rely on meals for their children through schools that are currently closed – and the company has already donated more than 500,000 meals in the first week of this programme to address this critical issue.
Tim Hortons has deployed coffee trucks throughout Canada to offer free coffee and donuts to health care workers and first responders at hospitals, health care centres and COVID-19 test facilities. Dozens of Tim Hortons restaurant owners have stepped up to do the same in their communities.
Guests ordering delivery through the Popeyes mobile app can access offers for free delivery and now have the ability to donate $1 to No Kid Hungry, a charitable organisation committed to ending child hunger in America. Donations will be matched by Popeyes for a limited time.
Globally, Burger King has the largest footprint with over 18,000 restaurants in more than 100 countries and US territories, and the company is very proud of the community contributions that its restaurant owners have made around the world.
In China, Burger King donated $1M RMB to the Red Cross to support frontline medical staff and has been providing free meal delivery to hospitals and to on-duty police officers.
In Italy, one of the hardest-hit regions in the world, Burger King has donated 8 tons of food to the Red Cross and donated meals to local hospitals.
Burger King restaurants in Spain, Germany, the UK, Sweden, the UAE, Qatar, Lebanon, Turkey, Iraq, Poland, the Czech Republic, Australia and Malaysia have all established programmes to support and help local health professionals.
Strong business fundamentals
Cil said, “I want to wrap up with a few comments on the strength of the company’s business fundamentals and illustrate why it believes it is particularly well-positioned to weather this crisis and come out on the other side even stronger as a company.”
“The QSR industry continues to serve hundreds of millions of people around the world. Across the three brands, the company is offering high-quality food that is reliably secure from a health standpoint and provides great everyday value to its guests,” he added.
“Its value proposition is clear to our guests in normal times, and it believes it is especially compelling during more challenging circumstances like the ones the world currently faces,” Cil said.
“On top of that, the company’s business model has allowed us to maintain a strong balance sheet and it ended 2019 with about $1.5 billion in cash. It has further fortified its balance sheet position by proactively drawing down its full $1 billion revolving credit facility out of an abundance of caution,” he added.
“As a result, the company now has approximately $2.5 billion of cash on hand. This has provided it the flexibility to confidently support its restaurant owners and employees throughout this uncertain time and maintain its focus on supporting its brands for the long term by making the right decisions today,” Cil said.
“The company has also demonstrated industry leadership during this crisis in support of our restaurant owners. It has provided support that it believes puts it in the highest rank of its franchisor peer set and it will continue to assist its restaurant owners for as long as this crisis endures,” he added.
“The ways in which the company has supported its owners – by adjusting rents where it has property control; by advancing cash payments where possible; by modifying operating hours where it makes sense – are all designed to provide flexibility to its restaurant owners within the parameters of its business model,” Cil said.
“Before I wrap things up, I feel compelled to say that I am incredibly proud of how everyone in the extended RBI family has pulled together during these very difficult times. I have great faith and more confidence than ever in all the company’s teams and the steps we are taking to come out of this crisis even stronger than before,” he added.
“And finally, I am thankful that we are guided by such a thoughtful leadership team and business partners who have proven to be the very best of hardworking, good people in all of their advice and decision making. There is undoubtedly more uncertainty and tough decisions ahead of us. And we will tackle them as a team, with a wide range of voices and perspectives that will make us stronger,” he added.