Those listening in on our webcast online. For those of you who don't know me, my name's Kendall Peck. I lead Investor Relations at Restaurant Brands International. I'm really excited to be joined here today with Patrick Doyle, our Executive Chairman, and then Josh Kobza, our incoming CEO. Before we kick everything off, I just need to read the very exciting safe harbor statement. I'd like to note that today's discussion may contain forward-looking statements, which are subject to various risks and uncertainty set forth in our SEC filings, which can be found on our website, rbi.com/investor. With that, I'm going to hand the microphone over to Patrick to kick things off. Thank you. Thanks, Kendall. Oh, you don't need one. I think this is gonna work, right? I don't need- Oh, I'm gonna take the mic. Yeah. All right. I wanna welcome everybody as well, and I know the team, as they're getting used to me, they promised that not only is there the disclaimer on forward-looking statements, but I also will be kicked any time there is a forward-looking statement made, which is possible. I thought that this would be a great opportunity for me to be able to share with everybody in the investor community, what I saw at RBI, why I got involved. It was the question that came in from a lot of folks when all of this was announced, and it just felt like an opportunity to come and sit down, answer that question for everybody, publicly webcast, so that everybody could hear me talk about what it was that I saw. I've got this unique window right now, being 90 or 100 days in, where really my view of this was as an investor, right? In, you know, another six months or a year, I'll probably be able to talk to you a little bit differently about, okay, what I see as somebody who's inside the company and very involved. But my getting involved was and my investing, both resources and time, into RBI was more an investment decision when I made it. I thought everybody might be interested in hearing why I had made that decision and what the opportunities were that I saw. I'm excited to share that with all of you today. However, we also made a little bit of a shift on this because there was other news last week. As you all know, Josh, who is going to be our incoming CEO, is with us here today. José sends his best to everybody. He said, "Why don't you have Josh go and handle this, and we can talk about kind of everything going forward." I will tell you, José did an amazing job with this business, and I'm excited to help Josh to move into this role and continue to grow this business and maybe even accelerate the growth going forward. While a lot of you know Josh, I think many of you don't. I thought I'd start out today by asking Josh to come up and kinda share with you his background a little bit and kind of what he's seen in the business as well. With that. Thanks, Patrick. You're welcome. All righty. Good afternoon, everybody. Thank you so much for taking the time to come out this afternoon. We really appreciate it, and I thank you guys all for taking the time. I know a lot of people flew from a long way and braved some scary winter storms, so thank you for your time and taking the time to listen. I know this whole session is supposed to be hearing from Patrick, but as he mentioned, we had some news last week and thought it'd be a good opportunity as well for me to share a little bit more about myself and share a little bit of my thoughts and kind of how I'll think about the business going forward. I'll hit on just a few points today, and then I'll hand it back to Patrick. The first point I want to touch on is just working together with Patrick. I'm really excited about this. As I think about coming into this new role, understanding I'm both a new CEO and admittedly a young CEO, I think there's probably no better setup that I could have had to be set up for success. I get to work with and learn from one of the most experienced and most successful CEOs who's ever worked in our industry, and that gives me a lot of comfort, makes me really excited about what I can do here and our chances of success. I think it's an awesome asset to be able to have somebody who's seen a lot of what you're gonna deal with and be able to go to them and work with them and ask questions, test ideas. That's one of the things I'm most excited to be able to work with Patrick on. I'm also really excited to be able to utilize him. You know, we have an amazing tool in Patrick. He's somebody who's seen a lot. As I think about all the different things that we need to accomplish, hard things, hard problems to solve, it's really awesome to have a partner you can work with who can help you work with all those things. I couldn't be more excited to work together with Patrick. It's been really great so far, and I think it's an awesome setup. I'm really thankful that the board was so thoughtful, to put in place a structure like this that's gonna help me and also help the company, to be the most successful it can be in the future. The second topic I wanna talk about is a little bit my own, my own story. I realized kinda talking to some people over the last week, that while a lot of you know a lot about Patrick, you know, I maybe didn't spend so much time talking about my story in the past, and I thought this would be a probably a pretty good time to try and do that here today, and I'm happy to continue the conversation, in, into the future. I think people might be a little bit surprised to know that Patrick and I maybe have a little bit more in common than you might think. Coincidentally or not, both of our families are from Michigan. We both ended up marrying Cuban wives, and we both have daughters that we love very much. Personal lives aside, we actually have a little bit in common in our backgrounds too. We both worked in finance actually at the beginning of our careers, Patrick for a couple of years, and I did that for three or four years too. After that, we both spent the vast majority of our time so far working in operating companies and specifically in restaurant companies. We both actually spent the vast majority of our careers working in these businesses, and it gives us a lot of commonality of history and perspective that I think is gonna help us working together a lot. Going like a few chapters back, though, I wanna share a little bit of my personal story and where some of like the lessons and values come from that have really shaped how I honestly think about business. I go all the way back to where I grew up. My parents, they're originally from Michigan, but they moved down to South Florida in about 1980 or so. I grew up with two family businesses. That was the world I knew from the time I was born until basically now. My dad and now my brother, they started a construction business, now they run it together, they started that about 40 years ago, down in South Florida. It's a really cool business and very proud of what they built. On my mom's side, we have a car wash. We've owned and operated a car wash for about 30 years. Those two businesses were a lot of where I got a lot of the lessons that I had growing up and that shape a lot of how I think about businesses, small businesses, big businesses, or franchise businesses around the world. I tell you, I grew up like spending Saturdays going and visiting job sites with my dad. He was crazy about his work and his business. So crazy that like... that he would get up in the morning and go, like, power wash a driveway somewhere and make me late for school, which I still give him a hard time for. He was crazy about it, and he loved it. He's one of, like my mentors and my idols to this day. In fact, working construction was probably my first job. That's what I did first when I was in my mid-teens. I worked summer construction in Florida, which was very hot and hard work. My dad had me doing things like taking out 55 gallon drums of trash, fueling boom lifts, and mixing stucco and stuff like that. It was a great intro to working. A fun little fact there. Our favorite thing to do for lunch when I worked in the summer in construction was to go to the Burger King down the street. There's one on Airport Road. It's actually still there today. My favorite thing to get was a double cheeseburger and a HERSHEY'S Sundae Pie, which was very nice because it's hot in Florida in construction. That Burger King's still there. It actually just was scraped and rebuilt very recently and reopened. I was there with my dad the other day. It was pretty cool. You know, I tell you, that's where like a lot of the lessons that have shaped how I think about business have come from. You know, some of the ones that stick with me most are in all of our businesses, we always were crazy about products, service, and the customer relationships. That was the lifeblood of the business. I think that applies to pretty much every business, and it's one of the main lessons that I learned there. Another big one was we had a lot of long-term loyal employees. My parents were really loyal to some of those employees. Many of them have been there for decades, and it's really clear to me that when you have people who are around for a long time who really care about the business, they put the love back into the business and your customers can tell, too. Another thing that I always got from family business is being prudent about costs. When you own your own business, every dollar, whether it's spent in the business or comes out, it's your own. That lesson was kind of inherent to me in everything that I learned from the very beginning. Last one that I'd share is time horizon. You know, when you own a family business, generally, your time horizon is forever. We never thought about selling the business. We weren't gonna take the businesses public. They weren't quite that kinda business. You know, when I grew up around the dinner table, the conversations were always about, like, how do we manage this business forever? That's something that's really stuck with me. I just wanted to share that that's really a lot of what shapes, kind of the lessons and memories in my mind as I think about the lessons of our business. It's really cool for me in that, like, I see a lot of those same values and practices in some of our best franchisees around the world. I have a lot of respect for them, just like I have a lot of respect for my parents and how they ran their businesses. I think that you guys can expect from me that those experiences, those values will shape a lot of the things that I think about in our business going forward. Next topic I wanted to touch on really quickly is the balance between thinking about growth and investments and balancing cost management. While I think a lot of you who have been around for a long time, and I know some of you have been following us since basically the beginning of our time, when it was back in Burger King, a lot of folks know me from a time where we were more closely held and we were more focused on costs. I think there's a balance to that in that I spent most of the last 5+ years focused on some of the biggest investments that we've made to drive growth. I wanted to recap just a few of those so you get an idea of some of the things that I've been focused on and that I think are really important to our business today and into the future. The first one of those is our international growth. I spent a ton of time putting together a lot of the biggest deals that drove our international growth over the last few years and then seeing them through as they grew into big businesses. I spent a lot of years on the board of Burger King in Brazil, watching that business grow into one of the biggest restaurant businesses in the country. I worked with BK France essentially from the day we started until just a year or two ago. We built that business from nothing, it didn't exist 10 years ago, into what is now the largest business in our whole international market around the world, doing over $1.6 billion in system-wide sales. Another thing that I worked on a lot was improving our operations. When I was in charge of the global ops group, we put together an initiative that you probably have heard us refer to a lot as Franchisee Success. That, that initiative had two big parts. One was agreeing on how we'd measure franchisees, and we did that together with the franchisees and came up with a much better system. Another important part of that was expanding our field teams to make sure that we were providing the right level of operational support for all of our franchisees and their restaurants around the world. We put tens of millions of dollars behind hiring a lot of people to make sure that we had the right level of support and the right spans of control, in those businesses, because I felt that that was really important to our ability to drive operational success and drive sales in those markets. I also spent a lot of time on the Reclaim the Flame plan. This is something that Tom Curtis and his team really drove, but I was very involved with them in figuring out what were the right priorities, how to sequence them, how much money we should put behind it, and making sure that we had all the stakeholders and the board behind us to make that huge investment. Last but not least, I spent a lot of time on technology. You know, we've come a long way there. We started a few years ago with a really small technology effort. We had about 30 people just working on corporate IT. Basically everything else was outsourced. We've now built our digital teams, we've built up a lot of our restaurant technology teams, and we've started to do more and more internal software engineering. I recognize we definitely have not gone all the way there. We've had a lot of bumps, and it's a big, long, and hard project. I think we're making progress, I think it's the kind of thing where the investments we're making today, they're gonna bear fruit years and years from now. I think we've made good progress there. We're putting a lot of investment behind it, I think we're gonna make even more progress in the future. A final one on this point is just I've spent a lot of time on our M&A investments as well. I worked on the selection of basically all the brands that we've acquired over the last 10 years, also the completion of those deals and the integration and the planning afterwards. I just wanted to share a few of those things. Those are the places I've spent a lot of time. They're the things that I think are critical to where our brands and our businesses are gonna go in the future, and wanted to give you a little bit of a sense of balance of kind of where I've spent time over the last 5 to 10 years. Last substantive point I'll make today, I referenced this on the earnings call last week, but one of the big initiatives that I want to drive here very quickly is I think we need to empower even further our business unit leaders around the world. I reflected a lot on how our business has evolved over the last 10 years, and the fact of the matter is it's changed a lot. We went from just one brand. We really had one office with a few hundred people in Miami. Now we have a huge global business that spans multiple brands. We have thousands of people. We have probably 5x the EBITDA that we had back then. That means the scope of things we have to deal with is a lot bigger. I think as I reflect upon my new role, one of the things that I need to do is really empower the business unit leaders around the world to be as autonomous, fast-moving as possible and be able to have full ownership of their P&L and their business. That will be one of my first priorities. In practice, what that means is giving them a bit more autonomy, reducing a bit the amount of kind of centralized groups that support all the businesses and giving those resources back to the brand and just allowing a little bit more autonomy of decision-making to the business unit presidents. You can expect to hear a little bit more on that, but that's one of the first and biggest things that I'll be focused on. Wrapping up, then I'll, I promise I'll hand it back to Patrick here. I won't steal too much more of his time. I just wanted to say a huge thank you. Really appreciate you all taking the time, both the folks here in the room and for those listening on the webcast. I think it's really great for us to have a chance to communicate with you all, but it requires the investment of your time, and we're very thankful for that. I'd really appreciate if you guys, if you all can today and in the future keep giving us a bunch of feedback. We'll have time for Q&A and some follow-up sessions. You know, I've already heard feedback from a number of you that we need to be even more open with investors, make sure that we're really communicating well, sharing progress, sharing priorities, things that are going well, things that are not. I know that's top of my list of things that I can do even better in the future. You have my commitment to do that starting today. Thank you all very much. With that, I'll turn it back over to Patrick. Thank you. All right. Let me talk a little bit about what I, what I saw at RBI and why I did this, and then I'll take you through each of the businesses and talk about where I think they are and kind of my view coming in and maybe my slightly now educated view of them 90 days or 100 days later. I've known Alex and Daniel for quite a while at 3G. They, they approached me back in I think it was September, and said, you know, "We know you've been looking at acquisitions, and have so far, utterly and completely failed to close on any of those," which is true. COVID may have slowed it down a little bit, but they said, "We've got something interesting that we wanna talk to you about, and we think that there is an opportunity to do within RBI, exactly what you were looking at doing, when you kind of affiliated with Carlyle and were looking at private company investments." That started the conversation, and I started doing a bunch of research and digging through all of the things that everybody in this room has written over the last few years and, looking at FDDs and just trying to really understand the core of RBI and these four brands. You know, my conclusion, not surprisingly, 'cause I'm sitting here today, was they're four pretty extraordinary brands. In some cases, I think the brands are even bigger than the businesses that are driven from those brands today. I just looked at them and said that there is something special here. These are businesses and brands that on a standalone basis I would choose to invest in. It's interesting because they are in such completely different places in their evolution and growth curves, but there is one thing that they all have in common. Which is they're all based around great food. That's the one and maybe the only commonality across them other than they're all in the restaurant business. You know, Burger King, you start from the Whopper, and the Whopper is the best burger in the business. It's fabulous food when it is executed well. I am convinced you get people to try it, you give them decent service and good value, and you're gonna get them coming back. Popeyes is extraordinary food. Everybody in here has hopefully eaten a lot of it, so you know it well. It's, it's remarkable food quality in this category. Tim Hortons is terrific food, and they've been upgrading it pretty dramatically over the course of the last couple of years. Firehouse also is built around great food. It's the one thing that is common across all four of those. I looked at it and said, "Okay, there is real opportunity here, and I can see how these businesses and brands could be dramatically larger than they are today." The other thing I need to understand is what is the mindset about doing it? You know, apart from just broadly why did you do this? Probably, the second most common question I got asked was, okay, you're this growth guy. You're gonna be going in to be Executive Chairman of a business that's, you know, 28%-29% owned by 3G. How do you make those two things fit together? It's really interesting. I will tell you, I think there are some misconceptions about RBI and where the opportunities are and kind of how they view the business. It works out really pretty simply for me, which is there are parts of the business, that you need to be spending on, that you want to do correctly, but you want to do very efficiently. I would say broadly, that means RBI, right? It's the things that we do at the RBI that are supporting these businesses, that you want to do very efficiently. It's something that RBI and 3G have kind of been known for, is that they're very good at kind of efficiency and accountability, around expenditures on things that you just need to do to run the business day in and day out. But what really got my attention was the other side of the equation, the investment side of the equation, and what was happening there. This was not about things that they said to me. This was about things that have been done here already. Reclaim the Flame, front and center, right? A $400 million commitment to get momentum going again on Burger King U.S., investing ahead of on advertising and with our franchisees on the assets. I'm looking at this and how it's structured and how they're thinking about it, and it's like, you know what? This is dead on. This is what this business needs. We need to be partnering with our franchisee. In this case, in Burger King, and I'll go through each of the businesses in a moment. This is a business that clearly needs some momentum, right? They've gone in and they've said, "You know what? We're gonna commit advertising dollars up front. If we can get your profitability to this level, then you're gonna commit that you're gonna spend more on advertising." That should sound very familiar to everybody in here, right? A commitment around restaurant-level EBITDA. This is something that was done before I had anything to do with this. Before there was any conversation, they had structured this agreement. On the asset side, it was a co-investment deal. It's like, all right, look, we will help support this. We want you to see what investment in assets and technology in the restaurants, how that's gonna drive performance, what the return on investment will be for you. To me, that's perfect. I look at the investments that Josh has been leading into technology, and they are very significant over the course of the last three, four years. You know, this is a business that started, as he talked about, maybe 30 people kind of running corporate IT to now a very significant commitment to technology. That I will tell you is a multiple of what we were spending at my old place. Very big commitment into technology, seeing what that can do, looking at it. I'm looking at all of this, and I'm saying, "Look, this all works." This is combining, you know, efficiency and accountability around expenditures on those things that you just need to do, combined with investments that need to be made, that need to justify themselves based on a return on those investments. I see the world the same way. There really is no difference in how I come at it. I'd already seen the willingness to invest. I'd saw a view of the business and how you create value in the business that was incredibly similar. To the way I approach it, and that's ultimately how I got comfortable. I will tell you that 90 days in, it has only reassured me that, you know, the way I saw it there is the way it is now. We are looking for opportunities, and it's one of the things I'm doing on what can we be doing that's gonna grow this business faster? How do we maintain the balance between efficiency on the things you just need to do to run the business day in and day out, and those things that are gonna drive results and are gonna generate a return for our franchisees and for our shareholders. The other thing in that process that was important was, you know, there was a succession process that was already well underway. José and the board have been developing Josh over time, getting him ready to step in. That was something that was gonna happen at some point. They also said, "Look, come in, take a look at the team. You know, we think Josh is gonna be ready to go here at some point, and we want your input on that." I'm here to tell you, I am all in on Josh. He's the guy. I look at his experience, his background, his knowledge of this business, and maybe most importantly, the last comment that he was making, about how you unleash these brands. We are 100% aligned. Somebody asked me earlier, Brian asked me earlier, I said, "I'm not answering that question until I'm on the stage with a mic on." He said, "You know, at Domino's, you ran a, it was a big business, but it was one business. It was one brand. How do you, how do you figure out how to go after this at RBI?" Josh and I are completely aligned. We have businesses run by five presidents. The four brands in the U.S. and Canada, so in the home markets, and then in international. The answer is they need to be running those businesses. There is a leader for each of those businesses, and we need to give them the resources and the support that they need, but we also need to let them make more decisions than they have made, have more autonomy to drive those businesses, and drive results. It's maybe the single most important thing that we align around. At the end of the day, what you're gonna see is Josh is the CEO. Josh is running the company, and Josh is running RBI. Josh wants those five presidents to be running and driving their businesses. They're the ones that have to get up in the morning and think about each of these, as opposed to trying to run this as one really big company. That's the way you do it. You split it up into each of these businesses. It's there today. You've got these five presidents running each of these businesses, they need to have the autonomy to make decisions to move quickly to find the opportunities within each of their within each of their businesses. With that, I wanna transition a little bit. I wanna take you through those five businesses and how I view each of them. I'm gonna start and work down in terms of total EBITDA contribution to RBI, there is a point in doing that. The largest business we have today is Tims. Right? You know, Tims in Canada and the U.S. is the largest contributor of EBITDA to RBI. I was saying earlier, I lived in Canada for a couple of years. My oldest daughter was born there and is a proud Canadian citizen. She actually, she has a son now, and she's trying to figure out how he also can be Canadian. He was born down here. You know, I know the market well from having lived up there, and I thought I knew Tims well as a business. I will tell you, getting into it is maybe one of the biggest positive surprises that I've had coming in. Tims in Canada is extraordinary. I challenge anyone, you can do this live, you can do it after, but I cannot come up with a restaurant brand on the planet that is more beloved in its home market than Tims. Tims is extraordinary. I mean, it is really remarkable, what has been built with the franchisees and that team over many years in Canada. You know, some of you probably know these facts, but to me, they were new and were stunning to me. You have a business that has almost triple the penetration of restaurants per capita in Canada than McDonald's has in the U.S. Right? It's amazing. We see the majority of Canadians every month. Right? The majority of Canadians do business with us every month, which is remarkable. Right? The visibility that gives us into the Canadian consumer and their habits and what's going on in that market, and their love for this brand and business, is truly amazing. What we have the opportunity to do there, and it's the core opportunity, with Tims, beyond just expanding it outside of Canada, but really talking about the Canadian part of the business, is to do, frankly, the reverse of what McDonald's did a long time ago. You know, when I was young, McDonald's was a hamburger business, and they were crazy to think that they could build a breakfast business. You're a hamburger business, right? They built one of the best breakfast businesses on the planet. Tims is exactly the opposite, except with a stronger brand, with greater penetration, which is something that started as a breakfast business that can be expanded into lunch and into dinner. That's happening now, and it's happening with great success. The other thing that you can do is, Tims and Canada in general, and frankly as it goes with coffee consumption in Canada, basically, whatever is happening at Tims is the coffee category in Canada. The answer today is that it is still primarily a hot brew business in Canada, and there is an opportunity to move into cold brew, which has been happening. Canada today is far less penetrated on cold brew than the U.S. is. It clearly is happening, and we're leading the charge on that. Great opportunities within our restaurants. We also have this amazing brand. What we have already done is look at ways we can expand that brand, and make more use of that brand. We launched a consumer products business in Canada seven, eight years ago. Do I get nods from my team? Maybe a little bit longer. Okay, maybe more like ten years ago. We launched from scratch. There was no Tims CPG, we are on the verge of becoming one of the 20 largest CPG companies in Canada. We are the number one coffee brand in grocery in Canada from, you know, a start from zero, about a decade ago, right? It's remarkable. We're up against some pretty darn good competitors, you know, in little organizations like, you know, Nestlé and Unilever and, you know, folks like that. You don't do that, you don't have that level of success that quickly unless the brand is amazing. The brand is amazing. In addition to expanding the restaurants, and the volume they do and the profitability of the franchisees, in Canada, in addition to, moving it into international, which I'll talk about in a second, you also have this opportunity to do other things with the brands. We've already got proven success, on doing things like that. Stay tuned there. That's Tims. It's amazing, and I can tell you that one, for me, in my role, it just means I get to think about, you know, all the cool things that you could do with that business to continue to grow it. It's gonna be a lot of fun to work with Axel, who runs that business, and the whole team up there who are doing a remarkable job. I'm excited to work with them on that. The second largest business is our international business. That's actually bigger from an EBITDA perspective than BK is in the U.S. While there will always be markets in international that have a problem, I ran international at Domino's for five years. You know, there's always gonna be something that's not perfect. The reality is that business is amazing. It is today predominantly Burger King. Those restaurants on average are doing extraordinarily well. The cash on cash returns are great. I was over in Europe two weeks ago in Switzerland, where the team runs our international business from, and then in Spain, which is one of our larger, more successful master franchisees, and it's an amazing business. I can tell you that the future of Burger King broadly exists today, and it largely exists outside of the U.S. Something that I am very familiar with from my previous experience, right? The international, because they're moving quickly, they seize opportunities. I'm walking into restaurants where there are no order taking stations on the counter. There is nobody standing there to take orders. You know, all you've got when you walk in is a row of kiosks and little table tents that are getting picked up by beacons off, you know, RFID. You go over, you place your order. There's a cash if you want to pay with cash, there's a cash machine you can feed euros into. You take your table tent, you put it down. They've got a little screen there that shows where each table tent is in the restaurant, and they walk your order out to them when you're ready. It's an amazing business. And it's been growing fast, and as you all know, it's been getting pounded by exchange rates the last couple of years. It probably hides a bit of the strength in the business just because of the dollar has been so relatively strong over the course of the last few years that I think it may mask some of the strength of the business. The remarkable thing there is that today it's 90%-ish Burger King. There are three other amazing brands that can be taken around the globe. We already have infrastructure and partners who we can do that with. We're able to take, these remarkable brands and Popeyes and Tims and Firehouse that, you know, Firehouse is not in international yet. Popeyes and Tims are getting going, and we're having a lot of success, but they're still early on. There's this opportunity to take them through that network, build new networks with the knowledge base that we have in each of these markets, and I think build extraordinary businesses over many decades to come. It's really exciting to kind of think about, okay, what could this look like, if you continue to aggressively build this out over time. David and his team there have done a great job. Again, part of the solution there is, give them more autonomy, give them the resources they need, set high goals for the amount of growth, find the right partners, off you go. That gets me to BK in the U.S. BK in the U.S. has obviously been a little bit more mixed over the course of the last few years and probably longer than that. The good news is there's momentum, right? The good news is it's getting better. It is not there yet. It is early days on that business. Here's where I think the keys are. First of all, the Whopper, you've probably all seen the research before, but the Whopper may actually be a better brand than Burger King. The Whopper itself is an extraordinary hamburger, and it's extraordinary brand, and there is a lot you can do with that. Now, this is something that again, and everything I'm talking about, you know, to be clear, this is about the team that has been here. This is about José. This is about Tom Curtis leading Burger King. I have nothing to do with anything that is happening today in any of these businesses. I've just been learning. What they've done with the new advertising is amazing. There's an old joke in the advertising industry about, you know, careful your strategy is showing. If you look at the advertising, the You Rule advertising, with kind of Whopper front and center, our strategy is showing. You build from there, right? You build with the strength of this product, with the strength of the brands. You know, we got a five comp in the fourth quarter. That's great. It's progress. You know, earnings for our franchisees improved materially in the fourth quarter. The whole year was clearly not where we needed it to be, but we were making progress on it. I feel very good about the Reclaim the Flame program. I, you know, I looked at it after I got in. It's like, okay, explain this to me. How does this work? What are the incentives? You know, take me through all of this. To me, it's the perfect partnership. You know, and I break it into two sides, right? The advertising side where we said, you know what? We'll invest. We'll invest ahead of you. We're gonna mark this as successful if your earnings per restaurant increases to $175,000 in 2024. We do that, then you come in and you invest in 2025 and in 2026. It's the perfect partnership around the perfect metric, right? Which is the franchisee's success. Combine that with investing in the assets, which we're doing together with them. The goal out of that is for them to see the return, right? If they see the return, and we've done enough re-images and scrape and builds and, you know, getting the technology right and getting, you know, some of the broilers and all those things, the equipment in the stores where they need to be and seeing returns from that, then we can keep the investment cycle going. The goal is to prove that there is a strong return for our franchisees on doing these things. Then there is clearly, more investment that's gonna have to be made over time by the franchisees, and we'll look at, you know, what, if any involvement we have in all of that. I like the early returns. Tom Curtis and his team have done a great job of getting alignment with the franchisees. High 90% of the franchisees committed to this plan. You know, coming out of that, maybe the first thing that I've been more directly involved with was what you saw last week when we announced that we're gonna publicly release the EBITDA per restaurant of our brands as a way of holding ourselves accountable for what is ultimately the most important measure of success. Many of you from my old life heard me say in the past, when talking about releasing EBITDA per restaurant, I may have challenged a couple of you in the past and said, "I can't imagine investing in a predominantly franchised business without knowing that." That is the measure of success ultimately in the business, and if you don't have visibility as to how those franchisees are doing, then it can't be clear what you're investing in. We've done it as a commitment to our franchisees and as a commitment to you to be transparent about who we are and the progress that we're making. You know, by the way, we came out and we released those numbers, and all three, we're still gathering the data on Firehouse. You know, all three of those, the answer is they were down from the last time we had talked about them. We weren't going out to celebrate, you know, amazing news. We were going out and celebrate the fact that we're gonna hold ourselves accountable for the fact that, you know, progress wasn't there the way we needed it to be. We're seeing early signs. It's getting better. You know, BK is, we're making progress, but we gotta continue to do that. That's probably the one where we still have the heaviest lift to get the business to where we need to be. Popeyes in the U.S. is amazing. That's probably the one that's the ultimate example of the brand is maybe even bigger than the business today. Extraordinary brands, amazing product. I mean, just amazing product. Maybe a victim of the success of the launch of the chicken sandwich a couple of years ago because it showed how powerful the brand is, what can be done with this brand with an amazing product innovation, and then probably exposed very clearly the complexity of the restaurants and running those restaurants. With a clear understanding that we will never do anything that would hurt the quality of the food or the perception of quality of the food, we do have to figure out how to make those restaurants more efficient. The food is extraordinary. We need to make it easier for people to do business with Popeyes. That means faster speed of service. That means just a simpler, easier kitchen that's gonna play into that frankly will make it easier for people to work there, to give better hospitality, all of those sorts of things. When executed well, and it's interesting, the category has been growing very fast. I think there are only two restaurant brands in the industry, in the QSR industry today that do $5 million or more in unit volume. They happen to both be in the restaurant industry in the chicken category today, right? Chick-fil-A and Raising Cane's. We look at it, and we got better food. Our food is amazing, right? We've got to figure out how do you get as efficient at delivering that amazing quality food to people, and what you can do out of those units, the volume that is out there, I think is really extraordinary. Last but not least is Firehouse. Relatively new in, relatively small. It's, you know, a couple percents of our EBITDA today. Great food. Lots of runway for growth. I think a commitment, I mean, through their foundation, there's something special with what they've done with first responders and how that's woven into the brands. Clearly, the sandwich category has gone through a lot of change over the course of the last couple of years. There have been some winners and some losers within the category. We see a big opportunity with this business both in the U.S. and outside of the U.S. I wanna finish up here and then take questions from all of you about all this by just talking about kind of what I see early on as being some of the opportunities. First, we already talked about, which is putting franchisee success at the top of the list. We need every resource in this company and all of these brands focused on making our franchisees more successful. That is ultimately what will drive the success of RBI. It's what's gonna drive returns for our shareholders, is having businesses that are so compelling to our franchisees, that they wanna own more of them, and they wanna build more of them. We've got a line out the door of people who want to be a part of these brands. Some of them are in very good shape, even though they're down. Some of them are not where they need to be, right? Burger King is clearly not where it needs to be. Last year with, you know, $140 some thousand in EBITDA more or less, right? We're relying on the reported EBITDA from them, but it's not where it needs to be. We've got to make a lot of progress on that. We already are. There's a lot more to come, and we've got to make that in the U.S. a more compelling investment opportunity for our franchisees. Starting with releasing and holding ourselves accountable for their results, hopefully that is going to give them the confidence that, number one, they're going to see progress. Number two, that they're confident about, you know, us staying on that and continuing to improve that, which will hopefully bring more capital in, which allows for the re-images and, you know, the scrapes and rebuilds and building new units. All of those things flow from the profitability of those restaurants. Certainly digital is a big opportunity. Looking at all of that, we still have, frankly, work to do on getting some basics where they need to be around POS systems and labor schedulers and back of restaurant, and we're in different places within the different brands. Tims is probably ahead of where we are with BK and Popeyes in the U.S. International use different systems around the world. Some are in very good shape. Some still need some work. There's a big opportunity. About a third of our business today is already digital. You're talking about, you know, well north of $10 billion in digital business around the world. An opportunity, clearly, to do a lot more with that going forward. The final thing is gonna be finding the new things, finding the investments, finding the things that, you know, we can go deeper into that we believe are gonna generate a really good return for our shareholders. I don't know what they are. You know, still learning the basics myself, and I'm excited to work with Josh and the brand presidents to talk about, you know, those opportunities and what they might be within those businesses. One of the ways that, you know, we generated and the whole team generated at Domino's, the results that they did over many years was continually finding those areas and placing those bets and making those investments into things that, you know, we believe were gonna generate a great return. On average, they did. On average, we found a lot of them. I'm optimistic that we'll find a lot of them here. That's where a lot of this ultimately generates growth, generates returns, and it's what I'm excited about working with Josh and the whole team to do going forward. If I look back at each of those brands, I look back at all of them, I think one of the things that's interesting to me, and as I was looking at it again, stepping back as an investor, a lot of progress has already been made, you know? We've got José and the whole team to thank for that. I mean, a lot of things are going the right direction. Tims has already, you know, it's two quarters in a row of double-digit same store sales growth. A lot's going right there. Burger King is already moving in the U.S. Long way to go, it's already moving. International is great. I mean, there's a lot going good in these businesses that, honestly, I didn't think was fully reflected. I saw that. I saw momentum already building within these businesses, the opportunity to do more, a partner willing to invest in those things that would generate returns, that's why I'm sitting here with all of you today. With that, I'd like to open it up for questions. Josh, you wanna join me up here? Webcast, Kendall, I'll let you run the questions. I see hands. Great. Thanks. I'm Andrew Charles from Cowen. Appreciate all the remarks from both of you. Thank you guys so much. You know, I think one of the bigger investor questions, maybe this one's for Josh, and Patrick, I have a separate one for you. Just Josh, I know you guys are doing a lot of work on the franchisee structure of Burger King U.S., and, you know, one of the open questions out there is around franchisee closures and the need for closures for Burger King U.S. Maybe you can talk about just how you're prioritizing your time as you talk to franchisees around this is what needs to be done and the, you know, level that, you know, potentially of stores that could be closed that are out there. Patrick, just a question for you. You know, the third bucket, the last thing you said, talking about other opportunities that are out there. I realize this is kind of your intro, where we get to kinda get your initial impressions. If you ask me to go anywhere below the 30,000-foot level, I'm, you know, I can't guarantee accuracy on answers. This is the, yeah. Keep them high level for me. Sure. High level, do you believe a pizza brand presents a void in RBI's portfolio? Let me answer that and then, and I'll kick it over to Josh on the, on the other one. That's probably the third-most asked question since I stepped in into this role. The answer is, we have a lot to chew on right now. You look at these businesses and the opportunity within these businesses, and honestly, you know, for us to look at a fifth brand in any category, I think requires us first to prove that we're getting a lot out of all of the brands that we have today. While we're making really good progress with all of them, I don't think today that that is fully appreciated, and I think there is more that can and should be done on those businesses. We've got to improve things, on our own, on the four businesses that we own, we don't need to prove it on a fifth business, at least not until we've proven it awfully strongly on what we already own today. Perfect. Thanks, Patrick. On the question on BKUS, and I would talk a little bit about like franchisee structure and where we're trying to go. You know, for me, a lot of this came through even clearer through a lot of the franchisee success work that we did over the last year or two. What's clear out of that and once we understand like who's performing really well, is that, like a lot of what drives success in these businesses, true in Burger King, true in some of our other business as well, is having really engaged franchisees, who are super engaged in their restaurants, close to their business, kind of live in the markets. That's kind of one of the biggest success criteria across our restaurant businesses or anybody else's restaurant businesses out there. I think our focus is trying to get to making sure that we have highly engaged franchisees who are involved in the restaurants, in the business. I think that's the really important thing to driving a really different level of operational execution at Burger King and ultimately sales and profitability growth. With that, with that mindset, as we go into where do we want the franchisee base to evolve, we're kind of thinking about how do we get closer to that in each of these situations. You know, we've definitely had some troubled situations in the Burger King U.S. system. We talked about there was an insolvency just recently. As we're looking at some of those potential restructurings in the system, that true north of, like, let's try to make sure that we have local operators who are super engaged in their business, that's sort of guiding where we're trying to get to. I would put that as probably the biggest priority in any of those situations. We may have closures that may happen, but we wanna make sure that going forward, we've got good portfolios of restaurants that are profitable with the right operators who have a vision to invest in those businesses and make sure that they're run really well. That's sort of like the I would tell you that that's the number one priority as Tom and his team work through all the kind of potential changes in the BK system. That's something that we talk with. I think Patrick and I talk with Tom about philosophically. It's really Tom and his team who are running all of those day-to-day. They manage their franchisee base. They're thinking about who are the right franchisees, what are the right arrangements, and what are the right, like sizes of those portfolios, going forward. Hi, it's Chris O'Cull with Stifel. I have a question for Patrick and Josh. Patrick, Domino's turnaround and growth was within a competitive set that you could argue was complacent at best during that time. How do you think about the competitive set that Burger King's in today and the dynamic with McDonald's and when you decided to invest? Yeah, McDonald's is pretty good at the burger business. They, they are. There's, there's no question. Look, they've, they have, they've done a great job of reimaging their units. Their units look terrific today. I think their loyalty program has been working very well for them. There is, there is a lot that has gone right over there. They do not sell the Whopper. That's the point of leverage. They don't sell the Whopper. So you have great-looking restaurants, and you've got speed of service, that's looking good over there. There are a lot of things that have been going nicely at McDonald's, and they are a tough competitor who does not have the Whopper. That is ultimately how we compete effectively with them, is, we've got great food. We need to do all the rest of those things, as well as they do, then I like our odds. You know, that is really the point of differentiation is around the food. It's what Burger King started from, right? I mean, literally, when, you know, McLamore comes in and he's deciding he wants to compete in this burger industry, you know, he decided, I need a bigger burger, I need a better burger, it is the core of this business, that's how we ultimately win. That's our competitive advantage. What we've gotta do is over time, and it's gonna take a little bit of time, over time, we've got to get rid of our competitive disadvantages, and we have some today. Address those, continue to strengthen the core, the strengths of this business, which is the Whopper, that's what it comes from. Josh, just quickly, I mean, you guys have made quite a bit of investments, obviously, in advertising and the physical building along with the franchisees. Are you concerned at all that these investments are gonna bring people in, but they may not be pleased with the operational experience within Burger King? What are you doing to kind of address maybe some operational challenges? It's a great question. Let me if I can just build on Patrick's answer for one sec. I think there's one other really important differentiator for Burger King that to me personally has always been really important, which is that we flame broil our burgers. Absolutely. That's the thing that brought me. Core to the Whopper. Absolutely. Core to the Whopper and like core to everything else we do. Yep. That's the reason, like, I always went and got the double cheeseburger because it was flame-broiled and it tastes better. I don't wanna lose sight. I think that's an important part of the Whopper that applies to everything else. The only other thing I was gonna highlight is that I think the burger space in the U.S. is really competitive. They're a bunch of great competitors. I think we have an even stronger role in our international business where, yeah, McDonald's is there, but we're neck and neck in a lot of markets. So our competitive positioning there, I think is even stronger in a lot of those international markets, where Patrick mentioned earlier that we're doing so well. To your question on this balance of investing early in advertising and then bringing folks in and how do we balance that with the fact that I would say some of the big asset upgrades are gonna take time, right? Doing remodels at huge scale is definitely gonna take a number of years. We asked ourselves that question as we set up the whole Reclaim the Flame plan. How do we make sure that when people come in, and thankfully we have the advertising that is driving folks in, how do we make sure that experience is great, and they wanna come back? There were a couple of key things that Tom and the team, I think, very thoughtfully put together to help with that. One of them is a huge ops push. They're doing something that's called the Royal Reset. You might have heard me talk about it on the last earnings call. We have a whole calendar. We already started it and it's leading up to around April or so, of getting all of the restaurants sort of refreshed and also reengaging with all of our restaurant general managers. The team just wrapped up, I think it was 40 different cities of tours, where we brought together all the restaurant general managers, explained to them what the game plan was, and talked to them about what they needed to do in their restaurants to make sure that they're ready as we start to put kind of fuel on the flame a little bit with the advertising here. We've put a lot of emphasis behind that. There's a lot of stuff that's going on in the restaurants. Every single restaurant had their own individual plan of what they were gonna do to make sure that they're ready. I would say we've really rallied our operations team, our franchisees, and the restaurant general managers to make sure that they were cleaning up the restaurants, refreshing all of their training, and making sure that they're ready to receive more guests. On top of that, we're also putting a bunch of money into the restaurants through a little bit more near-term investment. You might remember as part of the $400 million, we put $50 million in kind of very quickly, and we're accelerating all of that into this year into 2023, and that money is being matched by the franchisees. It's going to a combination of fixing all the technology in the restaurant. Imagine new point-of-sale terminals, new cabling in the restaurant, new screens in the back of the restaurant, fixing digital menu boards that might be older. That's being matched by franchisee investments that are going into a lot of equipment and upgrades that need to happen. Imagine fryers that are aged, boilers that need to be repaired. We're making sure that all of that stuff is getting fixed as quickly as possible. As we put this advertising dollars into the system, bring more guests into the restaurant, we're as ready as possible, and we're gonna provide as good of an experience as we possibly can to all those guests. Thanks. Sara Senatore, BofA. Pat, I have a question for you about two things you said. One was the efficiencies, I think, mostly sort of sit above the brand, right? You have to run each brand separately. Yep. sort of a truism in restaurants. Separately, you said, you know, one of the things you're doing is you spend time looking for the next big thing, and I guess the first line item that sort of comes to mind for both of those is G&A. I think your last firm was sort of, you know, on the high end of spending on G&A, particularly as measured as a percentage of sales. You know, I'm sure you have heard there's concern that maybe, you know, Restaurant Brands is on low end, perhaps too low. Maybe can you just talk about that, how you think about that line item in the context of investing, and if, you know, Restaurant Brands is not too low, then does that mean your last firm was too high, or how should we think about that? Yeah. Look, Sara, you know me, you know me well. I will answer all questions very directly. Were they too high? Was I too high maybe at Domino's? Yeah. You know, RBI does a better job of running efficiently, I think, than I did. You know, it's one of the things that's gonna work really well here with the whole team. There are, you know, there are things that I probably could have done more efficiently, but any investment that we make... First of all, there may be opportunities to run even more efficiently today on some of the basics that we do. Any investment we make, whether or not that is in G&A or that is in capital, if you see that happening, you should be jumping up and down happy because that means we found something, right? We found something that we believe is gonna generate a really good return for our shareholders and for our franchisees, and so we're gonna put money into it. We'll call those out. Sometimes after we've started, there were things that we did in my old life that, you know, we didn't wanna talk about until we knew that our competitors had maybe figured out what we were doing. Sometimes we may be a little bit behind on calling those things out for you. Look, we run efficiently at RBI. We've made a lot of investments over the last couple of years, and I'm excited about the returns I think we're gonna get from them. To me, if you see us start to move on any line, that should actually be a really good signal, right? Because it means we found something that we think is gonna generate a lot of value. To me, that's the way to think about it is, you know, look, if we're in steady state, are there things that we can even possibly do more efficiently than we do today? Sure. If we're spending, if we find investments, it's because we think it's a good thing. If it moves, and I'm not saying it's going to, 'cause maybe there are offsets on some of these things and, you know, and some investments that you've made, you start kind of figuring out after time how to make them more efficient, et cetera. If we start putting more money into the business, it's because we think it's gonna generate a great return, it's gonna increase the pace of growth in the business, should generate a good return. It's not just an expense. You know, that takes away from the bottom line. That's the way I think about it. You know, some of those things, if we're doing it, we're gonna flag, and we're gonna say, look, you know, Reclaim the Flame is perfect example, and you know exactly what it costs. You know exactly what we're doing. You know exactly what the return is on that. You know, the return on having everybody see Burger King in the U.S. move in the right direction is extraordinary, right? I mean, be blunt, there's been an overhang on this because people look at it and said, "Boy, I don't know about this Burger King business in the U.S." Getting that fixed is a big unlock, and I'm excited about what the team did and how it's starting to work. That's the way I think about it. Yeah, I think. Just to clarify, that makes a lot of sense. I guess the question has been, you know, maybe you're not investing enough. You're saying as it sits now, when you look at, you know, how you're spending versus maybe how you last company you worked at did. To run the business as it's run today, I don't think we're underspending. No. Yep. Hi. Brian Bittner at Oppenheimer. Patrick, at Domino's, one thing that I think really helped accelerate the improving trends in that business early on in your CEO tenure was you helped improve the franchisee base. You enabled strong, good operators to have more control of more units and the weaker, lackluster operators kind of had less control. That was a big, I think, underappreciated driver of what was happening at Domino's underneath the hood. Is there a strategy in place to recreate that here at RBI? Can you just maybe help us understand what you can do to enable that here? Yeah. If you think about the restaurant business and the franchising business in general, there are two reasons why businesses started franchising kind of in the 50s and into the 60s. It was, number one, because you could grow with other people's capital. Number two, a belief that an owner/operator could and would run the units better than you could run them all yourself. Those are fundamentally the two reasons why the franchising business exists today. You step back from that and say, okay, what do you need in our businesses? Capital is certainly part of that answer, but so is operational excellence. My commitment, and the whole team's commitment, to franchisees is we are gonna work our tails off to help the franchisees who are running their units well, who are in their units, who are even if they're not where they need to be, are trying incredibly hard. I'm a great believer that if a franchisee is not running their unit well, it is almost always because they've kind of backed away from it a bit themselves. It's rarely that they can't, right? There is a reason why they're there. They've had success in the past, either with this brand or at different brands. I know they can do it. It is set in them up to be able to do that. If they are choosing not to do that, then you need to have a conversation with them, right? Anybody who is in the system, if they're listening to this, if you're in your business and you're trying hard or you're getting great results, we are gonna work as hard as we possibly can to make you successful. If you've disengaged, if you're not trying as hard as you did once, if you maybe don't believe in, you know, in the future of the brand as much, then probably the best price you can get, on your business is today, right? Because it probably is not gonna improve if you're not putting as much energy into it as maybe you did once. You know, is there gonna be a process? Sure. We rate operators. That is in place today. There's a guy you may be familiar with who runs the BK business in the U.S. You know, he knows the playbook well from Domino's. So, yeah, you have to work through that. The magic in this business is you combine great return on investment in these restaurants with operators who are all in. That generates unit growth, right? That generates growth overall in the business. If you have somebody who's not believing in it, then you have a different conversation with them, right, if they've backed away from it. Yeah, those processes are in place, but we're committed. If somebody's a franchisee at any one of these brands anywhere in the world, and they wanna make it work, we're gonna work really hard to help them be wildly successful with this. You know, again, the best evidence of that and our commitment to it is that we're making their results public and saying, "You all in this room should be measuring us based on our success helping them drive results in their restaurants." That is a as good or better a metric of success of RBI as anything out there that, you know, we have to publish in our results. Hi, John Zamparo, CIBC. I wanted to ask about the international business. Yeah. It's a broad question, so you can pick select countries or talk generally. It's such an important part of your unit growth that I wonder how franchisee profitability is doing internationally. If you can talk about it either pre-pandemic… Yeah. -or versus your domestic business. Yeah. Generally very good. Credit to Josh for answering Chris's question better than I answered Chris's question. If you wanna know how Burger King is gonna compete with McDonald's, go to France, go to Spain, you know, those are markets I've been in recently that, you know, I've seen it. And, you know, the return on investment is good. The, you know, everybody's gone through a little bit of shock with the pandemic, you know, and inflation and all those things. You know, short term may not be as magical as it was three years ago. Overall, the returns are very good. You know, obviously that varies wildly by market, and there are markets where it's still, you know, we're relatively new into the market. Once you've got some scale and you're on national advertising and, you know, things improve materially. You know, on the scale businesses where they're more mature overall, you know, the cash on cash is very good. On average, probably better than the U.S. Definitely better than the U.S. on average. Hi, guys. Dennis Geiger, UBS. Josh and Patrick, thanks for taking the time today. Two part question on Burger King U.S. Patrick, you gave some, you know, impressive growth targets for the franchisee profitability over the next couple of years on the earnings call. Wondering if you could provide any more high level commentary on generally how to get there. Is it sales growth? Is it cost efficiencies? Is it inflation coming in? Some level of closures maybe? If there's anything on that front that you can add to that target. The bigger question is if either of you or both of you can sort of define BKUS success over the coming years. Is it those profitability metrics? Is it average unit volumes closing the gap to the competitor that you referred to? Just curious how you'd kind of frame that up. Thank you. Yeah. Can I take the profitability one first? Sure. Go ahead. All right. Look, I think it's a lot of things that you pointed out, Dennis, but I'd say, here's how I think about it. I think, first of all, we need to drive the top line sales growth. The good news is that seems to be working initially. We're getting some momentum. We've gotta continue on that and build on it, but seems like we're moving in the right direction there. I think that makes a lot of other stuff a lot easier. Second piece I would think about is kind of how we manage the business, and particularly around, like, pricing and discounts, and we've seen already a big improvement in gross margins. We've already seen that. That's part of what was behind what I mentioned on the earnings call, where franchise profitability is up about 40% year-over-year in the fourth quarter. I think Tom and Julie and that whole team are being really thoughtful about how they manage the business on a bunch of the levers that we control in terms of the promotional calendar and discounting. That's a big part of the kind of how you get there with sales, how you get there with margins. I think another part of it that's starting to be a little bit helpful is we've seen some moderation in some of the costs that we saw. You know, we went through the last couple of years at sort of a level of inflation that most of us in the room, you know, haven't seen. It was probably 40, 50 years ago, we saw that kind of inflation. You know, that was tough to- That's accurate. Yeah. All right. Thank you. you know, That was tough to adjust to, and but thankfully, we're starting to see a bit of moderation in some of those commodities that really went up pretty fast. you know, that's another helpful tailwind, you know, if we can see that moderation continue. I think with those three things, it puts us on a pretty good path to be aiming towards some of those targets. It'd be a big step forward. we're only, you know, a quarter or so into the new plan, but I think encouraging progress so far on that. Sorry, Dennis, what was the second? The second was how you see success at BKUS. Is it that framework? You know, at least my point of view, I think if we had to pick one metric, we'd pick EBITDA. It's the one we picked because I think for us to get to those EBITDA targets, we've got to deliver all the things I just talked about. We've got to deliver on the sales in particular. For us to get there, that probably means we've had pretty decent same store sales the last few years. I think if we get to that EBITDA target, it means that the system is in a much more sustainable place, right? That puts us in a place where the restaurants are profitable, the restaurant owners can really reinvest in those businesses, both in terms of how they manage them day to day, but also their ability to then continue to invest in remodels, which we know we've got some assets that we need to move forward. I think if we hit that target on profitability, it tells you that there's a lot of the really important things in the business that are in a much better place and moving in the right direction. Cash flow is not only good in and of itself, cash flow is a competitive advantage. It is. It simply means you've got the resources in the system to do things. You can be more nimble. We have to get it up in the Burger King system in the U.S. You wanna see the future? Go to international. That's what it looks like. Great. Thank you. Josh, along with Stevens, on that point, can you talk about some of your international partners and how they're aligned for that brand vision? 90% BK right now, but obviously a long runway of growth to leverage, you know, a portfolio of brands. Just think about, you know, operations, access to capital and kind of what that pathway looks like going forward. Yeah. On average, they're in a really good place. The interesting thing is there is a lot of overlap between some of the master franchisees in the RBI business internationally and my old life. The Domino's franchisee Jubilant FoodWorks in India has Popeyes. Jack Cowin, you know, who has Hungry Jack's in Australia is, you know, the chairman, 28% owner of Domino's, DPE. Alsea in Mexico has Burger Kings in four different countries, including about half of them in Mexico. Surinder Kandola has Tim's in the U.K. Anyway, there's a lot of overlap. Everybody I just named are very, very big, very successful, very well-capitalized franchisees. In general, that's the answer. I would tell you, overall, the master franchisee base in RBI, in international is in a really good place, a really good place. I think they've done a great job of kind of managing those relationships, of not getting, you know, super concentrated. I mean, I really like the way that all looks in the international system. Frankly, the average royalty rate is better than my old life. You know, the returns on that as you drive the business are also a bit higher. There's a lot of good in that business. Overall, you got a lot of great players in the international system. I haven't met a lot of them yet, but I know who they are, or I've worked with them before. Appreciate that. When thinking about kind of the U.S. franchisee, you think about that middle of the curve operator, looking forward to the continued conversation around improving franchisee profitability. Can you talk about the balance sheet health and, kind of, debt capacity and capability for kind of that, again, middle of the curve operator and where that could go over time? Yeah. you know, you've got a different situation. First of all, I mean, I think you're talking about Burger King, right? Popeyes, Tims, Firehouse, you're kind of in a different place. I mean, there's very little debt within the Tims system in Canada, correct? Yeah. Not to be leveraged. You know, I think you're really talking about Burger King. Burger King, it's interesting because you've kind of got two ends of it. There are actually a lot of smaller operators in the Burger King system, and then there are some larger ones. The larger ones are where you've got visibility. You know, look, pandemic was not fun. You know, we frankly underperformed the category the last couple of years. Our EBITDA per unit is not where it needs to be. We've got some franchisees who've got a balance sheet that's not where it needs to be right now, and they don't have the flexibility necessarily to do all of the things that they know and want to do in the business. We've got to work through those situations. You are mostly talking about some of the larger operators who consolidate a lot of units, and don't have balance sheets that were necessarily built to deal with what happened the last few years. We've got to work through those situations. What makes those situations easier is higher cash flow per unit. That gives you a little bit more flexibility to kinda do that. The fact that we're trending in the right direction means there may be a little bit more flexibility to work through some of those situations and get to a good outcome. We're committed to making them successful. In some cases, that may mean, you know, look, sell some units, as a way of raising a little bit of capital, giving yourself a little bit more flexibility. You know, we'll look at all the different, you know, options that are out there to help them get to where they need to be. Thank you. I've got a quick question from the line from Christopher Carril from RBC. A question for both of you, Patrick and Josh. We've heard a lot about brand equity, operations, technology, but curious how you're thinking about the balance between all of the priorities you've discussed here today and accelerating global development, where RBI has historically delivered innovative structures and strong performance. Yeah. you know, the way I would sort of address that is I would go back a little bit to my earlier comments when we started about giving the brand presidents a bit more autonomy to figure out the priorities of their business. I don't think I can tell you that for... The truth is we have kind of five big businesses. Each of them have a little bit different priorities, right? What matters for Burger King U.S. right now in the situation that it's in is extremely different from what Tim Hortons is trying to do, where they're in a position of increasing strength and thinking about where else they can take their brand. For me, it's really important to have each of the business unit presidents, like, really have their own point of view about what makes sense for their business. Which combination of reinforcing brand equity or improving operations or investing more in technology and what kind of technology matters for their business. Those answers are pretty unique, I would tell you, across all of those different business units, given the state of the world. I think you really have to give the business units the ability to identify those. It becomes a lot harder to talk about them across the entire portfolio. And that's something I've gained an increasing appreciation for probably over the last few years. Hi, it's Eric Gonzalez from KeyBanc Capital Markets. My question is back to the U.S. system for Burger King. You've clearly made some remarkable progress in the last few months. You know, the 40% year-over-year improvement in the fourth quarter is quite notable and perhaps implies that maybe you're running ahead of your internal expectations when you first laid out the Reclaim the Flame plan. My question is, assuming things continue to go in that direction, the advertising works, the operations improve, and maybe even get some help on the commodity front. You backstroke into that $175K. You know, how do you sustain that going forward, that progress? Does it make sense to accelerate that even further? Can you double down, or does it make sense to double down, and what would that mean? I tell you, at least my point of view is I still think we're really early. I'm happy with the early progress. It's very encouraging. It feels like we're kind of we're onto something there. I think we're still looking forward to kind of the targets that we laid out. I wanna make sure we keep sort of our eyes on the work in front of us. There's a lot of day-to-day work that needs to be done to get to that target, and we're not there yet. I think it's probably a little bit early for us to look beyond that. I think it's important that we and the team keep extremely focused on getting to that level of profitability. It really changes the game, I think, if we can move all the way there, and it's not done yet. There's a lot of work in front of us on the operations side, on a lot of these equipment refreshes to make sure that the advertising campaigns that we just launched, like the next iterations of those are really awesome and continue to drive a lot of results. I think our eyes are very much on kind of the near road ahead and making sure we continue that. We know we have a lot of quarters ahead of us to get to the end of 2024 and make sure that we're there or beyond that target. Yeah, I think it's absolutely dead on. I mean, it is very early. While, you know, it made me feel all warm and fuzzy talking about, you know, what if we're already at a successful level, we're not yet. We've got a lot more that we've got to get done. The good news is we made some bets, we picked some levers to pull, and they seem to be generating some results, and there are a lot more levers out there. I think what's important at this point is not only identifying what those levers are, but you've got to sequence them correctly. You've got to do the things that are gonna get some wins quickly for the franchisees to get their cash flow up so that they're feeling better about their business, so that, you know, their banks are feeling better about their stability, that you can bring more capital in. You've got to sequence those things to really build to what is, you know, ultimately gonna be, you know, pulling all of the levers that you think are gonna work. You've got to do the ones that are gonna get you the quickest wins, that have the highest ROI, that, you know, are gonna move you forward while proving out at the same time that's, you know, and doing some tests, part of which is kind of within Reclaim the Flame, that these other levers are there, they do work. you know, now let's think about how we sequence those things in. Yeah. I think just to wrap up on that one, I think just make sure to be fully balanced, and I think we got two questions on this, you know, throughout the session here. There are some difficult things we'll have to work through with Burger King. There are, to Patrick's point, there are some franchisees, who have some challenging situations, and we'll have to work through those. We've got a lot of really important work ahead of us. We're keeping our eyes on that. Tom and the team are extremely engaged on all that. I think we're just encouraged that, you know, some of the stuff we're doing is starting to show progress, and that gives us confidence about the overall direction of where we're going. Maybe if I could squeeze one in about unit growth? Can we talk about maybe returning to that 5%- 6% unit growth? You know, obviously, Russia's out of your control, and there's some issues in China that maybe you haven't that maybe your competitors haven't seen, but you've struggled in that region. Can you talk about maybe some of the good guys and the bad guys in terms of unit growth, and where you see that, the path to return to that 5%- 6%? Yeah, for sure. I would tell you, I think both for Patrick and for me, the kind of the opportunity in terms of global development is one of the things that is kind of most forefront in our minds. One of the biggest, I would say, success factors in my mind is can we realize that full potential over the next few years. It's very powerful in terms of our overall kind of outlook and trajectory. That's definitely front of mind for me. I think a couple other things, you pointed to these. When I think about it, we've got one piece which is getting BK back to kind of its full potential. If you were trying to bridge from a couple few years ago to where we are today, you know, the majority of that delta is basically Russia and China, to your point. I think on the China front at least, you know, there's tremendous potential there. You can see it in the size of the market, you can see it in what some of our competitors have been doing. The reality is that we've been falling a bit behind there. We see that as one of the biggest opportunities, one of the biggest things that we're working with David and the team to address. I think that'll be a big area of focus and big priority for all of us over the next year or so. By the way, Tims is growing very fast in China. That's where I was gonna go next, coincidentally. You know, I think the other great piece of that whole puzzle in terms of where we can go is, I would say first what's happening with Tims and Popeyes. You know, we acquired those brands a number of years ago. I think the reality of turning these businesses into real like big global brands is it takes some time. It takes some time to get the brands adapted correctly, to put in place all these partnerships, to find these amazing partners that we have around the world, and then for them to ramp up and start to become material. I think credit to David and his team in the international group, but they've done a lot of that heavy lifting. We're starting to see some of that come through. We're starting to see it in Tims, where we're growing quite fast in China, but we've done a lot of other successful businesses now as well. When we bought that business, you know, it was basically just the GCC or kinda some of the Middle Eastern markets. That was the only international market. Now we've got businesses all over the world. We've got businesses in Mexico, U.K., we've got them in the Middle East, in China, in India now, Pakistan. We're in so many places and we're really proving that that brand can be very successful. I think we're starting to get to a place where the contribution from Tims is becoming more and more material. We also have Popeyes. You know, Popeyes, I think when we bought it was, you know, growing maybe 30 units a year outside the U.S. I think we did something like 200 last year. Again, the international team has done a fantastic job setting up partnerships in so many markets. You know, if I were thinking about one thing that has the most potential, you know, Popeyes is an awfully clear one. The size of that category is huge around the world. The fried chicken product, it like that segment is awesome, and it works in basically all of the biggest markets. I think there's such a clear opportunity. We're starting to get to the point where it's becoming more material, and that could be a lot bigger than it is once we get traction in some of the biggest markets and have a lot of those things working. We didn't even talk about Firehouse. But Firehouse, we just added. Obviously, the sandwich category around the world is massive. I think there's a big opportunity to be a leading sandwich brand in markets all around the world. We just started this year, starting to build out Firehouse in the U.S. We set up a bunch of new agreements across Canada, leveraging, you know, a lot of our fantastic franchisees at Tims. We're figuring out which are the markets we can start in across our international. I think that's something, you know, if you look a few years out, it can start to be a material contributor as well. There's a lot of hard work, a lot of fantastic work that the international team's doing. I think there's potential for the growth rate to go much farther than what it is. Hey, thanks for doing this, by the way. The question I have is just as I look back to what McDonald's did from a turnaround perspective, I guess it was 2015 or 2016, it seemed to be get sales up and then make investments in the assets on the back end of it. I guess when I look at Reclaim the Flame, it was more on the marketing side than I expected. I mean, that's it's a big marketing investment, but it's maybe light versus what I thought on the asset side. I guess one of the things that seems to be a difference is McDonald's has the rent that it collects, and so we can get a return back on the other side. How do you make an investment in the real estate and get a return on the other side without being involved in the real estate, in owning and collecting rents? Where is the asset base today as you guys see it? Where do you want it to be five years from now, either from a percent re-imaged or I don't know how you're judging it, but anything there would be helpful. Thanks. Yeah, it's a great question. I think you sort of laid this out, but it was quite intentional on our part that we pulled some of the levers that we could pull faster at the beginning, knowing that the remodel and the asset upgrades, that's a longer-term deliverable. The way I would think about it is, you know, we're pulling the levers on investing in advertising, working on some operational stuff to make sure that when those guests come in, they have a great experience. Doing some quick investments that we can do in things like equipment and technology in the restaurants. At the same time, we're starting to ramp up the remodels. I think you can frame it a little bit like the advertising where we need to go and improve out the ROI on those remodels. I think one of my big goals would be to see that when we put that $200 million in for the 2023 and 2024 remodels, we need to see a really solid ROI on that. That's what enables us to keep going and do the rest of the system over time. I'm sure to your point, you know, if we do 800 remodels in a couple of years, that's not the whole system. We need to go further over time. I think the starting point of that is proving out that there's a really solid underlying ROI. To your specific question on the kind of how do you impact the system if you're not essentially the landlord? It's a great question. You know, a couple lenses to think about that. One, we are the landlord in a decent number of cases. I say that only because it gives a window into, I think, how it could work in many other situations. In those situations where we are the landlord, in many cases, we're giving like a tenant incentive, tenant inducement, on top of the other incentives that we give. I think that can be an important part across the system of how you get funding for some of the remodels. Some of the money can come from us in terms of our royalty credit mechanism that we've set out there. Whether the landlord is Burger King Corporation or the landlord's a third party, or the landlord in some cases, actually the franchisees, many of them are actually real estate developers. You know, I think that's a logical place for some of the funding for the remodels to come from as well, is landlords investing in the upgrade or rebuilding of the existing assets. I think there are a couple different buckets that funding can come from, and that's what helps to make the funding equation work, and also the, like, the ROI on the franchisees' investments in many cases. Is that the plan is prove it out with these several hundred that you're doing now and then have, I guess, go to the landlords and maybe try to convince them that the returns there in 2025 and 2026? Is that kinda how you guys are thinking about it? I wouldn't sequence it quite that way. I would say even now, we're going to landlords, franchisees can go to landlords, to look for contributions to those remodels as we're doing the 23 and the 24 remodels. Thank you. Thanks for the perspective. Pleasure. Real quick. Sorry, Christopher Carril. I think we have time for one or two more questions. got Christopher Carril over here. No worries. It's Christopher Carril from RBC. Thanks for doing this, guys. Question back on franchisee profitability. Is there a wide dispersion when you give the averages, of average franchisee profitability? How correlated are operational metrics at the franchisees related to the franchisee profitability? i.e., spending your time and efforts with certain franchisees are gonna move the number a lot faster than... I would imagine there's wide dispersion, but maybe that's wrong. Just some color in and around that. I know, Patrick, you've had an experience working on this metric and just how you think about that, because I would imagine there's some operators that are just great operators. They haven't invested as much capital as the others, but they just work harder or engage harder. How much of that is this franchisee profitability journey we're gonna be on? Yeah, can I share two thoughts real quick? Sure. All right. I think great question, Christopher Carril, and one of the ones we've been really focused on. I would tell you also, having really clear, like, franchisee grading criteria through Franchisee Success has helped us to understand this and think about it more clearly and also just to communicate with franchisees about this. I'll tell you, there's probably two axes upon which we see pretty big differences in profitability. One is just absolute levels. The best operators, kind of our A and B operators, at like a snapshot in time, have significantly better profitability, sales and profitability than the kind of lower, the kind of D's and F operators. I think what's important to understand there too is there's an element of how time evolves. What we see is that the operators that have poor operations, they tend to get much worse over time. I think Patrick sort of referenced this, but when you have folks who aren't engaged, who aren't involved, who aren't in their restaurants, you know, he kind of referenced it of like the best day, the best kind of time is today because it tends to be the case that performance degrades over time when people aren't involved. That's really helped us in talking to franchisees, framing where they're doing really well, those who we really need to celebrate, encourage and support, and the folks that really need to reengage with the system, and we can translate it, we can share data on it, of really how that translates to sales and more importantly to profitability. I think it's also, you know, for all of us and for our teams, it's really driven like a huge focus on upgrading the kind of the quality of the operations and the quality of the operators, because we know that's fundamental to the health of the system, to brand scores, but also to profitability that allows them to reinvest in the restaurants. I agree. To put a finer point on that, we will work with every franchisee who really wants to put in the effort to be successful in this system. The quickest way to turn around a restaurant that's on the bottom end of the performing curve is to sell it to a high-performing franchisee. That's the quickest way to get it done. We'll have some patience for people who are on that end who aren't running their unit particularly well. They want to engage hard and improve their operations. We're there with them side by side. We're gonna give them that chance to do it. The quickest way to move them up that curve is frankly to have a new owner who's a great operator take over those restaurants. That's a process. You've got to give people the opportunity to prove it themselves if they wanna do it. If they don't, I mean, my experience is when you sit down with a franchisee, and you say, "You know what? You ran this unit really, really well in the past. You aren't today. Do you want to?" Half the time they say, "You know what? You're right. Thanks for calling it on me. I'm not sure that I do." Then the answer is almost always the best price you're ever gonna get for that restaurant is by selling it today. If you wait two more years and you really don't put the effort into turning this around, your price is probably gonna be lower two years from now. If you're not fully committed to making this work, then probably your best answer is, you know, I'll give you the name of three people who can buy it from you, and you get the transaction done. That's the quickest way to turn a unit around. Hey, Jon Tower, Citi. Thanks for doing this today. I guess the question for me is on technology. Patrick, at your prior shop, there was a philosophy internally of build, not buy technology, and I think you had a lot of success with that. Yep. Here, there doesn't necessarily, at least to date, seem to be a cohesive or coherent strategy around technology. I'm curious to kinda get your perspective on, you know, the philosophy of build versus buy versus rent and where you see the most glaring needs. Is it a common POS across the brands globally so that you guys have great insight into what's happening on a day-to-day basis? Yep. your thoughts there. Let me answer the first part, and Josh can answer the second part. The answer at Domino's was we built almost everything ourselves because we had to. We looked hard at outside options, but 15 years ago, we couldn't find the things that we needed off the shelf that were gonna work for Domino's. Domino's has, you know, the special added thing of the big delivery component, which, you know, required some different things from a software standpoint. Part of why we did it was because we had to. There just was not another choice for us. Speed matters in this context. Personally, I'm wide open to buying or renting, and, you know, versus building if that will move us there more quickly. There are a lot of different components, right? I mean, you know, there are things we are doing ourselves. There are some things that it may be faster for us to just rent it or buy it. To my mind, speed is probably more important than anything else. Yeah, I think that's all fair. I think it is important context to realize kind of how the landscape evolves over time and whether you need to build custom software or you can rent that software. I would say my point of view on kinda what's most important is really that whether we rent or buy various pieces of the technology, I think we've got to get to more standard systems, at least at a market level. Just to give a couple contrasts that we've had in our system and illustrate you know why it's so important, you know, when we bought Popeyes, you know, I don't have an exact count, but it was 40 some odd point-of-sale systems. It's pretty hard to I didn't know there were 40 some odd different systems. I couldn't list them if I tried. You know, that, if you think about that, maybe that worked 20 years ago to some extent. It really doesn't work today. You know, just simple things like knowing what you sold yesterday, are essentially impossible. You can't ingest 40 different, you know, heterogeneous just, like, data feeds and know what happened, right? It's even more important when you go to an e-commerce context where you're trying to have a menu in the cloud that people can order on and be able to inject those orders into the restaurant, so you're not gonna build 40 different versions of integrations to different point of sale systems. I think the for me, the number one imperative is at least at, like, a business market level, we need to get down to a more standardized set of systems. It really enables efficiency, effectiveness of the business and ability to integrate to new platforms. You know, I'd say probably our some of our best examples of this, Tims is actually down to a pretty standard set of systems today. Majority of the system is on one point of sale. We build the e-commerce layer, but it's one e-commerce platform. We have one network. We have one helpdesk. I think that allows us to manage the technology systems better, provide better and consistent service levels to the franchisees. I think to me, that's sort of the true north of where we want to get to. Whether that means, you know, we're writing some of the software or some of the integrations or we buy it from somebody else, I'm a bit more agnostic. There are pros and cons of that. It's expensive to write custom software. It takes a long time, to your point. If there's a great third-party solution, you know, that should probably be top of the list as a starting point. We're gonna wrap it up with one last question that came in from David Palmer at Evercore. Patrick, if you're going to hit the high end of your own performance targets, what are the one or two most likely wins that make that possible? Oh, boy. I don't know that I can narrow it down to one or two, David, but thanks for the question. You know, look, international needs to keep growing very, very fast. A lot of growth is gonna come from there. The number one correlated causal factor on valuation in the restaurant industry is unit growth, even more than same-store sales growth. Now, same-store sales growth goes negative, that's a really bad thing, right? Unit growth is what drives valuation more than anything else in this category. The majority of our restaurant growth is gonna come from outside of the U.S. over time. I think that's very important. I think we've got to get Burger King in the U.S. to a much better place than where it is today. I think Tims in Canada, it's the largest business today. Getting franchisee profitability back to where it needs to be there. They're in a good place, but they can be in a much better place, and they've been in a better place in the past, combined with finding new ways to leverage the brand and expand it into new day parts. Those are the biggest things. Probably, you know, the first thing off the top is, you know, look, if you can accelerate unit growth, both Popeyes domestically, Tims domestically in the U.S., Firehouse in the U.S., and then broadly outside of the U.S., that's probably what's gonna generate the most growth. Thank you all. Really appreciate you coming in. Hopefully, this was helpful for all of you to give us to give you a sense of how I've been looking at the business, why I got involved, to introduce you to Josh for those of you who didn't know Josh before. Let us know how this went. Josh said up front that one of the things we wanna do is we wanna be I think far more open and transparent with all of you, give you a sense of what's going on here. I believe tremendously in this business and these brands, and looking forward to creating a whole lot of value for our franchisees and for our shareholders in the years to come. Thanks, everybody.