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“Running Restaurants in a Challenging Economy” | Restaurant Brands International CEO Jose Cil | November 29, 2022

“I remember one day my mom sat me down and said, ‘You need to study, you need to apply yourself because if you don’t, you’re gonna end up working at Burger King one day.’”

Restaurant Brands International CEO Jose Cil shares how supply chain challenges, commodity and wage inflation, and labor shortages are impacting its Burger King, Popeyes, Firehouse Subs, and Tim Hortons restaurant chains before a November 29, 2022 meeting of The Economic Club of Florida.

Show notes

Restaurant Brands International (RBI) is the franchisor to 29,000 Burger King, Popeyes, Firehouse Subs, and Tim Hortons restaurants in more than 100 countries.  It generates approximately $35 billion in annual system-wide sales.  It is also a major employer in Florida with headquarters for the first three of those brands, employing 1,000 corporate employees. 

“Florida is a fantastic place to do business and that’s not by chance, that’s by design,” the Miami native said.  “It’s by design from the government but I think more importantly, from people like you that are involved, that are engaged, and that bring businesses together and help create an environment where entrepreneurship and commercial enterprise can drive communities forward.  And that’s, I think, a super powerful combination.  It’s why Florida today is what it is,” Cil said.

Mr. Cil shared how the quick service restaurant industry has evolved and how everything, including the customer experience, has changed since the coronavirus pandemic.  RBI had to make “significant investments” in technology and mobile apps to improve online off-premise ordering and drive-through service, as well as food and restaurant worker safety. 

“I think the other piece that was important during the pandemic that changed us, I think dramatically, is I think we became more courageous,” explained Cil.  “I certainly did.  As a leader in the organization, we took steps, bolder steps, than we ever have before because we needed to, in order to take care of our franchisees, to take care of our team members, to take care of the folks in the restaurants, and to take care of our guests.”

Cil told the Club that while the pandemic was probably the most difficult stretch of time he’s ever had as a business leader, “I almost wish we were back in the pandemic, as it was much easier to deal with that than the current environment, including supply chain challenges,” he said.

Cil said that ongoing commodity pressures and “staggering” wage inflation are impacting RBI’s franchisees and the entire industry, as are significant challenges finding labor.  The pressure is being felt by their restaurant guests as well.  “We’ve seen a drastic pricing increase in the products we purchase.  If I take 10-cents of price increase, how much of that 10-cents goes to the bottom line?  If not all, it means you’re impacting consumer behavior and losing traffic,” Cil said.  “Our focus is always on the guest and the guest experience.”

One solution has been to encourage guests to order digitally, either online or using an in-store kiosk.  RBI’s digital sales in the third quarter were up 26% year-over-year to nearly $3.4 billion, representing a third of its quarterly sales.  “In the end, we want to get to 100% digital,” he said. 

RBI recently announced it will be investing $30 million in digital improvements, part of a $400 million plan to beef-up advertising and store remodeling and relocations to modernize and grow its U.S. business that together with franchisees’ contributions will total nearly $1 billion in the next year few years.

Mr. Cil also shared with the Club RBI’s corporate values, including a diversity of viewpoints.  “I feel that this is a key driver of success, having more perspective, more viewpoints, creating a positive tension and disagreement as a leadership team, is really powerful to get to the best ideas,” Cil said.  I think when you get to a situation where everybody has the same ideas, everybody’s supportive of the ideas that someone has, there’s no debate, there’s no challenging, be careful.”   

He also revealed the five ways you build a most-loved brand, “as our mission is not to be the biggest, or the most financially successful, it’s to be the most loved.”

Links and Resources Mentioned in this Episode

The Economic Club of Florida podcast, provides an extended platform for discussion to educate, engage, and empower citizens on important economic, political, and social issues. Based in Tallahassee, Florida, the Club has featured distinguished speakers on engaging topics of national importance since 1977. To learn more, including how to become a member, visit www.Economic-Club.com or call 850-224-0711 or email mail@economic-club.com.

Date of recording: 11/29/22