Good morning, and welcome to the Restaurant Brands International first quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. You will hear a tone to confirm that you are in the queue. To exit the question queue, you may press star then two. All callers will be limited to one question. Please note this event is being recorded. I would now like to turn the conference over to Kendall Peck, RBI's Head of Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to Restaurant Brands International's earnings call for the first quarter ended March 31, 2023. As a reminder, a live broadcast of this call may be accessed on the investor relations webpage at rbi.com/investor, and a recording will be available for replay. Joining me on the call today are Restaurant Brands International's Executive Chairman, Patrick Doyle, CEO, Josh Kobza, and CFO, Matt Dunnigan. Today's earnings call contains forward-looking statements which are subject to various risks set forth in the press release issued this morning and in our SEC filings. In addition, this earnings call includes non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in the press release available on our website. During portions of the call today, we will be referencing franchisee profitability measures that are based on unaudited self-reported franchisee results. In addition, the consolidated growth metrics discussed during the prepared remarks, including consolidated system-wide sales growth, comparable sales, net restaurant growth, and organic adjusted EBITDA growth exclude results from our franchised restaurants in Russia as we did not generate any new profits from restaurants in Russia in 2022 and do not expect to generate any new profits in 2023. Now I'll turn the call over to Josh. Good morning, everyone, and thank you for joining us on today's call to discuss our first quarter of 2023. I've spent the past few months traveling around the world to connect with franchisees, visit restaurants, and engage with guests. I've also spent time internally with our teams to hear their views on the opportunities in the business. I'm excited about the path ahead for each of our brands, and I'm incredibly proud to see the hard work of our employees, our franchisees, and their team members who are responsible for the results we're sharing today. We had a good start to the year with first quarter consolidated comparable sales growing 10.3% year-over-year and net restaurant growth of 4.2%. This translated into global system-wide sales growth of 14.7%, organic adjusted EBITDA growth of 15.6% and organic adjusted EPS growth of 22.1%. We delivered strong comparable sales in our home markets, including 15.5% growth at Tim Hortons Canada and 8.7% at Burger King US, in addition to 12.3% in our Burger King International business. Popeyes US grew 3.4%, Firehouse US was up 6.7% for the quarter. Importantly, our top-line results, coupled with moderation in overall cost inflation, helped drive improvements in restaurant-level profitability this quarter. This included particularly good year-over-year improvement in average four-wall EBITDA at Tim Hortons Canada and Burger King US. We feel good about the progress we're making tackling this key priority and see clear paths to continue improving franchisee profitability across each of our brand's home markets this year. From a development perspective, we opened 54 net new restaurants in the first quarter, and overall restaurant count grew 4.2%. The first quarter is historically our quietest development quarter, and our results also reflected BKUS closures that I'll discuss in a few minutes. Even after taking into account BKUS closure activity, we feel confident we can accelerate consolidated net restaurant growth in 2023 with progress more back-half weighted. We have plenty of runway to continue growing Burger King International while Tim Hortons and Popeyes accelerate in key markets like the U.K., India and China. While we're still not where we want to be with Burger King in China, realizing our full potential here is one of our top priorities. I was in China two weeks ago and can tell you that we did fall behind our peers in growth during the past three years of COVID, primarily due to weakening unit economics and financial constraints. Are focused on charting a path to resuming the growth that Burger King in China deserves and the market demands. I also had the chance to spend time with our Tim Hortons team in Shanghai and can tell you that our red maple leaves are now everywhere in Shanghai, and our team is rapidly expanding to new cities as a leader in the fast-growing coffee market. Let's get into our details of on performance by brand, starting with Tim Hortons Canada. We kicked off the year with a 15.5% increase in comparable sales and 16.6% growth in system-wide sales. Growth this quarter was driven by higher traffic, which benefited from improving mobility, thoughtful calendar initiatives, and strength in our core offerings. These results were further aided by enhanced restaurant operations and pricing. Our new and improved food offerings, including Loaded Bowls and wraps, are helping us to strengthen our position for growth in the CAD 10 billion PM food market. This quarter, we extended our loaded platform to include Chipotle Steak bowls and wraps, which attracted younger guests and drove trade up from lower ticket lunch foods, resulting in higher check compared to the system average. We grew first quarter sales in our PM food dayparts 23% year-over-year, including 17% and 13% growth in our lunch and afternoon snack categories, respectively. As a result, our first quarter PM food sales mix grew to 25% versus 23% in Q1 last year. This quarter's cold beverage offerings featured a roasted hazelnut cold brew, which helped cold beverage sales increase 21% and doubled cold brew average volumes versus Q1 2022 levels. Our delicious cold brew offerings have driven our Q1 cold beverage market share to 23%, up from 20% in Q1 last year. We're working to expand market share further with the launch of our new handcrafted Sparkling Quenchers this month. We're also pleased to see momentum in our flagship breakfast and baked goods categories. In January, we launched TimSelects, a high-quality, value-conscious breakfast option, which contributed to an 11% year-over-year increase in breakfast food sales, reinforced our breakfast market share of 60%, and helped drive us to the number one position in great value for money for the first time since we started tracking it in 2018. We also maintained our leadership position in baked goods with our Easter Dream donut and cookies and savory anytime Snackers contributing to 34% year-over-year comparable sales growth in the category this quarter. From an operations perspective, following targeted field initiatives and the launch of a dedicated speed of service app, the restaurant teams drove their best speed of service result in nearly two years, while also improving guest satisfaction 15% year-over-year. We've built a powerful digital platform at Tim Hortons Canada, including the number one food and beverage app and number two e-commerce app in Canada. During the quarter, we saw our 4.8 million monthly active users visit our app an average of 8 times per month, helping us to sustain over 33% of sales through digital channels. We know we have a valuable asset and are looking for opportunities to give guests even more reasons to engage with our app, including through new features and offerings like our Roll Up to Win contest, which wrapped up in early April and drove our highest monthly active users ever of 5.8 million. In addition to being a digital leader, we pride ourselves in being the most trusted and loved restaurant brand in Canada. Our monthly brand tracking continues to show impressive gains across all the metrics we carefully watch, even as Canada's market leader, which I think is a testament to the continued focus of the Tim's leadership team to keep brand love at the center of everything they do. Patrick and I spent time with Axel and many of our franchisees across Ontario and Quebec in the past couple of months, hearing their stories and views on the business while sharing some of our own perspectives on Tim Hortons and our commitment to franchisee success. We have some incredible families that run Tim Hortons in their local communities across Canada and a talented, experienced, and hardworking Tim Hortons corporate team. Together, we are building sustained momentum in the business. Turning now to Burger King, starting with the international business, which grew first quarter system-wide sales by 19%, adding over $400 million of incremental sales year-over-year. These results were driven by 5.2% net unit growth and a healthy balance of traffic in check, resulting in comparable sales of 12.3%. This quarter, we saw good performance in some of our largest markets like France, Germany, Spain, and Australia, as well as some sales recovery in China following the easing of COVID restrictions. Digital ordering has fundamentally changed the business over the years and will continue to be a major driver of growth for the next several years. During the quarter, France and Spain generated over 70% of sales through digital channels. In France, kiosks remained the biggest driver. Meanwhile, in Spain, delivery remained a leading service mode for guests. These unique strengths allow us to bring best practices to some of our other large and fast-growing markets like Australia, where we recently implemented kiosks and have seen strong adoption from guests. I had a chance to see some of the latest digital innovation recently in China, where the front counter POS is becoming less relevant and nearly all orders come via online channels. Some brands are even beginning to sunset their kiosk programs to transition entirely to mobile ordering. Whatever the format in their local markets, what is clear is that quick service restaurants are moving towards automated ordering. The perspectives that come from our international business also allow our U.S. team to watch carefully and potentially adopt digital capabilities in our home market with confidence, given the success we're seeing around the world. The Burger King International business has really transformed over the past 10 years. David and his team have ambitious goals and are excited to keep working with our partners and their dedicated teams. Shifting now to Burger King US, where Tom, the BK corporate team, and our franchise partners are generating encouraging early results from the execution of the Reclaim the Flame plan. For the first quarter, BK US delivered comparable sales of 8.7% year-over-year and system-wide sales growth of 8.1%. Our total net restaurants declined 1.7% year-over-year as we work to make important progress improving the overall health of the franchisee base. Our top line performance this quarter was driven by communication of Burger King's most important equity, the Whopper, compelling value initiatives, including the $5 Your Way Meal, over 30% growth in digital sales, and benefits from strategic pricing. While traffic was modestly negative this quarter, I did see improved year-over-year traffic trends from Q4 into Q1. For Q1, we spent approximately $7 million of our $150 million Fuel the Flame advertising and digital investment. The team has also been applying improvements to creative, messaging, and ad testing that have helped further amplify our share of voice and resonate with guests, which is clearly translating into top-line momentum. We also deployed an additional $7 million of capital towards our $250 million Royal Reset program, which includes the $50 million short-term component of the Royal Reset commitment. As a reminder, the short-term portion of the investment targets restaurant technology like indoor digital menu boards, point of sale systems, and printers, and is matched dollar for dollar by participating franchisees who are investing in upgrading kitchen equipment such as toasters and fryers, as well as property improvements like parking lot repairs and lighting. We now expect to touch over 4,000 restaurants with this investment and anticipate seeing benefits from the program beginning in the second half of 2023. We're underway executing the more intensive remodel portion of the program, which provides up to $200 million of cash funding for high-quality projects. We're prioritizing higher scope opportunities with strong operators to deliver the greatest potential returns and view this program as an important proof of concept to drive sustainable remodels by our franchisees. As a result of our more targeted approach, on average, we aim to deliver year one uplifts ahead of our 12% historical average from remodeled versus non-remodeled restaurants. Moving on to operations, we've been increasingly focused on the importance of operations with franchisees over the past couple of years. The data clearly shows that better operators drive better results. Average four-wall EBITDA of A operators was over 65% higher than the system average in 2022, and this trend of outperformance continued in the first quarter. To further drive this point home, in addition to providing more incentives for better operations with our Royal Reset remodel program, we also recently altered our expansion policy for franchisees. In general, only A and B operators will be allowed to build or acquire existing restaurants, with an emphasis on concentrating portfolios to be fewer than 50 units, contiguous geographically, and with local ownership. The Burger King team is having direct conversations with our franchisees about the transformative business results that are possible through strong operations and delivering a great guest and team member experience. Most of our franchisees are embracing these points and are working closely with us to drive execution in their restaurants. I'm pleased to see that their efforts, combined with ours, are delivering results. In fact, since the rollout of our franchise success system, plus targeted training sessions, we have seen healthy growth into the A and B operator levels. A ton of effort has gone into driving this outcome, and the work does not stop here. We are dedicated to expanding the number of A and B operators in our system, which will set franchisees up for both operational and financial success. Finally, we have had a few recent insolvencies in the U.S., and I know a key question is how many more should we expect, and what are the implications of that for potential gross restaurant closures. Historically, we've closed a couple hundred units at Burger King U.S. each year and had a couple of years in the 300-400 range, such as 2020. We currently expect gross closures in that 300-400 range here for the full year, though I would emphasize that there is a fair degree of uncertainty regarding exact numbers, and this will depend to some extent on the pace of recovery in the business, which we've already begun to see. Most of these units will be low volume with some sales recapture. We believe the impact to system-wide sales will be much lower than the% reduction in restaurant count. Certainly, the team's goal is to improve the overall health of the system, which we're already seeing with improved top-line sales and restaurant profitability. One of the most important factors is the willingness of our franchisees who have troubled restaurants to work with us and commit to implementing the changes necessary. If they can't, we have operators ready to step in and do what's required. I do expect a bit more short-term noise as we transition some portfolios into the hands of top local operators, think we are moving in the right direction to improve our foundation for the long term. Overall, we made good progress in the quarter for the top line as well as the bottom line for our system. Given these results, moderating cost inflation, and our investment behind the brand, coupled with strong operating leverage at the restaurant level, we're feeling increasingly positive about BK's path forward this year and into the future. Turning now to Popeyes, which had a solid start to the year, growing comparable sales 3.4% and net restaurants 5.9%, resulting in system-wide sales growth of 9.1% and year-over-year improvements in restaurant-level profitability. Last week, I joined the Popeyes team and nearly 600 participants from our franchise system in Phoenix for our annual convention, where Sammy and the team unveiled a multiyear strategic plan called Easy to Love, designed to accelerate the brand's growth and increase average four-wall EBITDA to $300,000 by the end of 2025. It starts with making Popeyes easy to run for our franchisees and their team members, which will ultimately drive higher guest satisfaction. This will involve initiatives to make our kitchens easier to run for restaurant managers and team members. We know guests love our food when we get it right, frankly, it isn't easy to do. Our team members tell us, I've experienced it firsthand when working back of house. We know restaurants drive much higher sales, traffic, and profitability when they have great operations, this part of the plan is designed to help more restaurants be in that top tier. The Popeyes team traveled to several international markets over the last 6 months and have embraced best practices from partners around the world. With several new country entries, we have accumulated a lot of learnings and innovations that will be brought back to the U.S. business. Some of those include variations on kitchen equipment and design, simplifying operations procedures, and of course, increasing front and back of house digitization. The good news is that we have a pretty clear and complete blueprint of how Popeyes can be easier to run from international markets such as Spain, France, and the U.K. We're now testing these elements in the US and believe many will become core to our operating plan over the next year or two. The next element of the Popeyes plan is easy to crave, building on what we are best known for, bone-in chicken and our chicken sandwich, while leaning into new areas for menu expansion. One great example is the introduction of Ghost Pepper Wings in January. Although this limited time offer sold out in just two weeks, it drove higher average check and traffic, attracted a younger guest, and helped improve gross profit margins for franchisees. Given the product success, wings are now back on the menu as a permanent item, and you can expect to see more innovation from us in this fast-growing category. The last chapter of the Popeyes plan is making Popeyes easy to access by developing modern and convenient restaurants and helping top operators grow with high-quality locations. In 2022, over 70% of openings had at least one drive-thru and were either with topic to your existing franchisees or new franchisees. The team aims to maintain development momentum with top operators this year. I know the Popeyes system left the Phoenix convention excited and confident in the direction of the brand for the coming years. We have an unmatched product and brand, if we can make it a little easier for our team members and guests, I am sure we're going to achieve great things. Finally, Firehouse Subs. Before diving into the brand highlights, I'd like to thank Don Fox for his years of commitment to Firehouse Subs and his 50 years of service in the QSR industry. Don is taking on a new role as Chairman of Firehouse for the balance of this year and will be a valuable resource for the team. He will also stay closely involved with the brand's Public Safety Foundation, which has now made $75 million in grants for life-saving equipment since inception. As Don steps into this new role, we're excited to welcome Mike Hancock as President of Firehouse Subs. Mike has 10 years of experience with our brands, most recently as Chief Operating Officer at Firehouse and also formerly Chief Operating Officer of Tim Hortons. I know Mike is excited to lead Firehouse's next phases of growth. In terms of results for the quarter, Firehouse saw comparable sales of 6.1% and net unit growth of 2.3%, leading to a 7.5% year-over-year increase in system-wide sales. Digital represented over 35% of system-wide sales and remains a significant opportunity for us. We recently launched our Canada mobile app to include a new look and feel that provides a better user experience and will allow us to provide more personalized offers to guests. We're in the process of applying the same updates to the U.S. app presently. I'll turn it over to Patrick for some quick thoughts on the business. Patrick. Thanks, Josh. I think it's pretty clear that we made really good progress this quarter across a number of initiatives. I personally feel very good about the position we are in to continue executing on our core objectives. Before I hand it over to Matt to walk you through the financials in more detail, I wanted to quickly comment on our commitment to restaurant profitability and a network of healthy, growing franchisees. We've received very positive feedback from key stakeholders, franchisees, investors, and employees on our decision to publicly disclose franchisee profitability on an annual basis. When our franchisees make more money from the restaurants they invest in, so will RBI for our investors. I'm very proud of how quickly we've adapted our mindset internally to make franchisee profitability the number 1 priority, including updating our annual incentive compensation for all employees at the company to put an even heavier weight on this key metric. We're dedicated to building brands and businesses that deliver a great value proposition to franchisees. In its simplest form, our franchisees are our customer as a franchisor. We sell them a business model, and then we work hard to move up the average profitability while the franchisees work hard to always be better than average. Core to making this all work is ensuring we have franchisees who believe in the vision and direction we're taking their brand, which by and large, we do. The vast majority of our franchisees are dedicated, enthusiastic operators working very hard to deliver a great guest experience and wanting to grow their business for long-term success. Our focus is on helping this very large majority of franchisees be better and grow. Like anything in life, there will always be a minority who aren't dedicated, enthusiastic operators, and that's okay. We'll work with them to leave the system and move on to do something else. There simply is no room for franchisees who are not willing or able to work hard to operate restaurants that are better than the system average over the long term. We're talking about a small number here. In these instances, we're working to find partners who are all in. We want partners who take an ownership and an operator mentality, partners who set the culture, visit their restaurants regularly, get to know their team members and customers, and who are hands-on as an operator, whether they have one restaurant or hundreds. I've seen firsthand the benefits of having locally engaged operators, and we have many fantastic franchisees at each of our brands. I personally feel very good about the progress the team has made over the past few quarters in our home markets, improving operations, franchisee profitability, and our franchisee base. More importantly, I feel great about how our teams are working together to execute against their plans, and I'm excited for what's to come in the years ahead. In my 5 short months here, I've now had the opportunity to visit international markets, attend a Tim Hortons road show in Toronto and Montreal, join the Popeyes franchisees at their convention in Phoenix, meet with leading Burger King and Popeyes franchisees in our offices, and visit with the Firehouse team in Jacksonville. I'm very impressed by the motivation and quality of our franchisees. I remain impressed by the quality of our brand teams. I would put our leadership teams up against any other team in the industry. The strength of those teams is why both Josh and I feel strongly that they should be given more autonomy to run their businesses and quickly make the decisions needed to improve their businesses. We have a lot more to do, most importantly, continuing to further improve franchisee profitability. The quarter, the first quarter, was another decisive step forward. I'm very bullish on what we can accomplish, I'll leave things there for now and look forward to taking your questions after Matt walks us through the financial details of the quarter. With that, I'll hand it over to Matt. Thanks, Patrick. Good morning, everyone. For the 1st quarter, our global system-wide sales grew 14.7% year-over-year and flowed through nicely to our adjusted EBITDA, which grew 15.6% organically, and our adjusted EPS, which was up 22.1% organically. Q1 adjusted EBITDA growth included a negative $7 million headwind from our Fuel the Flame investments at BKUS, which was offset by our strong growth in system-wide sales, a $4 million increase at company restaurants, reflecting similar sales and profit improvements as the broader BKUS system, and a $4 million year-over-year decrease in bad debt, as our additions in the 1st quarter were smaller than the bad debt associated with Russia in Q1 of last year, and included an improvement to $3 million of bad debt at BKUS versus $7 million in the 4th quarter. As a reminder, in 2022, we did see quarter-to-quarter volatility in bad debt, including nearly $5 million of net recoveries in Q2 of last year. Our first quarter adjusted EBITDA growth also benefited from solid cost discipline. As I mentioned last quarter, we expect our segment G&A growth will moderate in 2023 versus 2022. We saw this begin to translate through in the first quarter, with a 3.1% year-over-year growth in segment G&A. During the quarter, we also saw a $21 million year-over-year FX headwind to our adjusted EBITDA. As a reminder, on average, for every 100 basis point change in the Canadian dollar and euro versus the US dollar, we see a nearly $3 million and $1 million quarterly EBITDA impact respectively. Shifting to EPS, our first quarter adjusted earnings per share was $0.75 compared to $0.64 last year, representing an organic increase of 22% year-over-year, excluding an FX headwind of negative 6% or $0.03 per share. Our adjusted EPS also included a $0.04 per share net benefit related to discrete non-cash tax items, which was partially offset by a negative $0.01 per share headwind from the impact of our Burger King US Fuel the Flame investment. Finally, as I mentioned last quarter, we're expecting a step-up in equity-based compensation for this year and saw the first quarter increase to $45 million. This was primarily driven by recent equity awards related to management transitions, the impact of changes to our incentive framework from 5-year cliff vesting to 3 and 4-year vesting, and improved trends in performance metrics. We currently anticipate equity-based compensation to be between $190 million and $200 million for 2023. Turning to cash flow and capital allocation, Q1 is traditionally our seasonally lowest quarter and was further impacted this year by a few additional timing items related to ad fund activity, our BKUS investments, including $7 million of marketing toward Fuel to Flame and $7 million of capital toward Royal Reset, and our Firehouse Area Representative buyouts, which we completed in April. The increase in market interest rates resulted in higher cash interest for the quarter. While we've effectively locked in fixed rates on 80% of our debt over the next six years, our free cash flow metric does not reflect the positive impact of our hedges, which created an offsetting cash benefit of approximately $40 million in the first quarter. During the quarter, we also returned $243 million of capital to shareholders through our dividend, which we declared for Q2 at $0.55 per common share unit, with a full year target of $2.20 per share. We ended the quarter with available liquidity of approximately $2 billion, including over $1 billion of cash, and our net leverage ratio is 5.1 times, with a clear path to reach our target of mid 4x over the next couple of years. With that, I'd like to thank everyone again for your support and for joining us this morning, and we'll now open the line for questions. Operator? Thank you. If you would like to ask a question, please press star followed by one on your telephone keypads. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure that your phone is unmuted locally. As a reminder, all callers are limited to one question. Our first question comes from Dennis Geiger from UBS. Dennis, please go ahead. Great. Thanks for the question. Very helpful transparency on the BKUS business and encouraging progress so far for the brand, including that number of A and V operators now that's increasing. Wondering if you could give some additional thoughts on sort of what the most impactful investments or strategic decisions have been to improving the momentum there, and if that's at all changed the plans initially outlined, be that investment levels or any, you know, points of focus, et cetera. Thank you. Yeah, Dennis, good morning, and thank you for the question. you know, I think there are a few pieces of the plan that have been most important, and they've been consistent from the beginning. I think first and foremost is the focus on restaurant operations. Tom has really brought that home and made it front and center. he's focused a lot on franchisee success and we think that translates a lot to restaurant operations, and we've made a lot of progress there, and I think it's really impactful to the momentum we're seeing. I think the second piece I would highlight is advertising. you know, I think that was a very important part of the Reclaim the Flame plan. It allowed us to... It is allowing us to generate early momentum in the business, and I think you saw that starting in Q4 and into Q1. That's also. You know, it's flowing through to the bottom line. It's impacting franchise profitability. That's the other thing I would highlight, is that franchise profitability is really starting to move in the right direction. I think that's. It's really impactful to the momentum in the system. As we mentioned, it strongly impacts our restaurant operators' ability to reinvest in their businesses, you know, whether it's in labor or in the remodels that we need to do to make the assets more modern. I think the last piece is the remodels. You know, we're earlier in that, but I do feel that is absolutely critical. We need to see more and more of the Burger Kings that you drive by when you drive down every street in America. They need to be modern, they need to be appealing, and they need to be competitive. I do think that's one of the most important things that we need to drive here over the next few years. Thank you. Our next question comes from David Palmer from Evercore ISI. David, please go ahead. Thanks. A question on unit growth. 4% growth globally this quarter. I think you'll wanna get back to 5%+, maybe even higher over time. I would imagine Burger King China is gonna be one key swing factor on unit growth. I would imagine there's other segments, combinations of brands and regions that you think could contribute or most contribute to an improvement in unit growth over time. I'm wondering which brands are those and if you were to think about getting back to 5%+, you know, what sort of timeframe would you have us thinking about? Thanks. Hey, David. Thanks for the question again. Yeah, as I mentioned you know, a few minutes ago, Q1's generally the quietest quarter for us on development, but we do feel good about the overall outlook. I'd say that's a balance of a couple of dynamics going on. You know, one is the closures that I mentioned in BKUS. That will be a bit of a drag year-on-year. The reason that we feel good about improving the pace of restaurant growth around the world for the full year is exactly what you mentioned. There are an awful lot of drivers, especially in our international business, that are helping us to pick up the pace of growth. You know, I had a chance to spend time over the last few weeks in both India and in China. We have a lot of great things going on there. You know, we just opened Popeyes in India. We just opened Tims in India and, you know, both of those are off to a good start. Our Burger King business in India is also picking back up the pace of development, so there's a lot of great stuff going on there. In China, you know, we have had a slow couple of years, but the team is focused on picking back up the pace of growth at Burger King. Now we have Tim Hortons, which is growing really fast, and we just announced that Popeyes is gonna be reopening there in just the next few months. The growth is very broad-based. It goes beyond India and China, and that's, I think, what gives us a lot of comfort and a lot of excitement about the long-term development outlook. You know, we're really seeing a lot of good progress from David and the team across the newer brands, especially Popeyes, and Tims. They're going to a lot of new markets and those markets are doing increasingly well. There's a lot of great things, pretty broad-based, that give us confidence in where we can go both this year and probably more importantly, the potential in the medium to long term for net restaurant growth around the world. Thank you. Thank you. Our next question comes from Brian Bittner from Oppenheimer & Company. Brian, please go ahead. Thank you. Good morning. Josh, question for you. You know, one of your first priorities as CEO seems to be providing greater autonomy to the five business segments, reducing the centralized groups, and giving more resources back to the brand level leaders, around QSR. Can you just talk about where you are in this process? It seems like maybe we're still early on. Can you speak about how this could be a catalyst for improving operating results across the company? Yeah, Brian. Thanks for the question. You know, I would characterize it as a journey that, you know, was already happening before I became CEO. We've been moving more and more of the resources to directly report into the business unit heads. That had happened across some of our operational teams already. We just moved all of our supply and distribution, a lot of those resources back into their respective brands. We're working on a couple more things right now, but that we've, we're doing as we speak. Some of those are things like technology and digital resources and some of the real estate groups as well. There's quite a lot of quite a lot of areas where we're moving back to the business. I think it's going to allow the teams to move faster, and allow the business unit presidents to have greater control over everything that needs to happen. It allows each of those functional areas to be much closer to their respective businesses and their franchisees, very importantly. I think we're already seeing the benefits of some of those movements. Thank you. Thank you. Our next question comes from Chris Carril from RBC Capital Markets. Chris, please go ahead. Hi, thanks. Good morning. again, encouraging results here at BKUS. maybe just to follow up on Dennis' earlier question, just on the Reclaim the Flame plan, just given the strong momentum you are already seeing, I mean, does that change how you're thinking about the pacing or the magnitude of the investment spend here? Is there anything in the operating or competitive environment today that would cause you to accelerate certain investments such as advertising? Thank you. Hey, Chris. Thanks for the question. You know, I would say overall, we're really pleased with how the Reclaim the Flame plan is working. I think it was set out in a very thoughtful way, with the right sequencing of operational and advertising investments followed by the longer term investments in remodels. You know, I would say no change to those plans at this point based on how they're going. We're pleased with how they're going and nothing in the competitive environment that's changing our perspective on that. Thanks. Thank you. Our next question comes from Lauren Silberman from Credit Suisse. Lauren, please go ahead. Thank you. Tim Hortons Canada continues to just demonstrate really strong performance. Looks like it's accelerating on a multi-year basis. Can you just help us understand what you think the biggest drivers of the underlying acceleration are? You talked about market share gains across key categories. Where do you think that market share is coming from? Thank you. Hey, Lauren. Yeah, we were very pleased with the progress at Tim's this quarter. I think it goes back to fantastic work that Axel and his team have done over a number of years. They worked on the basics, they did the hard stuff, and they did it the right way. I think that that's translated to strength in our core products and core platforms. It's translating to some of the strength in the brand metrics that I cited. We're seeing really great improvements across the board in our brand health. I think the team's also doing really excellent innovation work. You know, Chef Tannis and Victoria across food and beverage are launching fantastic new products in some of the target categories that we've talked about a lot over the last couple of years, particularly around cold beverage and PM foods. Those products are resonating with guests. I think people are really excited to see the new innovations coming out of our test kitchen and going across our restaurants. I think pretty broad-based success there. I think, you know, we're gonna keep at it. We're gonna keep working towards growing cold beverage market share and our PM food day part. That'll be the focus for the rest of the year, and I expect beyond. Thank you. Thank you. Our next question comes from Andrew Charles from TD Cowen. Andrew, please go ahead. Great. Thanks. Question for Josh or Patrick. You called out that A operators had 65% higher EBITDA than the BKUS system average in 2022, helping to contextualize the challenges that C and F operators face. As you look ahead and as you work to get stores in the hands of stronger U.S. operators, what is your willingness as a franchisor to take ownership of underperforming BKUS stores on a temporary basis to help accelerate the turnaround and perhaps attach a development agreement once you're franchised? Yeah, Andrew, great question. You know, I would say You know, we cite a lot of the statistics on the A operators because it really shows the potential of the business and the like the transformative impact of having incredible operators, you know, running those restaurants. That's really our North Star is we wanna really drive operational quality, move more of those restaurants into A and B operators 'cause we know it's gonna drive the business. In terms of, you know, our willingness to own restaurants and run restaurants to do it, we're absolutely willing and, you know, happy to be part of that solution. You likely saw that in one of the recent insolvencies where we're taking over 17 of the stores. You know, our ultimate goal is to have fantastic operators running the stores in the system. We have some really great operators within our company restaurant business, and so we're happy to be part of facilitating the transfer. We're happy to run the restaurants for a while, as long as that's contributing towards the long-term vision that we really want to achieve. Andrew, the only thing I'd add on it is, you know, I think what you're seeing us doing with the Burger King business in the U.S. is laying the same foundations that we did in the international business, and importantly in Tim's in Canada. I mean, the results of Tim's in Canada are a result of doing fundamentally everything right? It's great advertising, it's great operations, it's making sure that we've got terrific engaged franchisees. You know, it's continually renovating the assets so that they look really good. It's getting the pricing and promotion right. You know, we're really following that blueprint with BK in the U.S., which is, look, we want our restaurants run by people who are gonna run them incredibly well. If we've got to step in and use our balance sheet or run a few restaurants for a while to make sure that they are ultimately winding up in the right hands, we're willing to do that. There are no shortcuts to this on how you're running the business. We are focused on doing everything right around the BK business, and that includes getting the restaurants into the right hands. Thank you. Thank you. Our next question comes from Brian Harbour from Morgan Stanley. Brian, please go ahead. Yeah, thank you. Good morning. Maybe just a couple specific questions on Reclaim the Flame. When we think about the advertising spending, I know it looks like it was higher in the fourth quarter, a bit lower in the first quarter. Could you comment on, you know, is that kind of just like the seasonality of that spending, and how should we expect it to be deployed going forward? Maybe the same question on just the Royal Reset spending. Lastly, just kind of on remodels, I think you've talked about, you know, discussions with some landlords in the past to have them participate in the remodel process. I'm curious how those are going and, you know, when you expect kind of the remodel pace to start to pick up. Yeah. Brian, I'll take that one. You know, I think you should expect to see some variation in kind of quarter-to-quarter ad spend. A lot of that's driven by the calendar, and kind of seasonality of revenues, as well as when some of the biggest ad campaigns that we really wanna dial up to GRPs are gonna come through during the calendar. You know, I would look at it more on a full year basis, and expect to see a bit of volatility going forward, as you just as you look quarter-to-quarter on that spend. On the Royal Reset, kind of the shorter period, $50 million, I'd expect we'll see the rest of that spend over the course of 2023. You know, we've already spent some of it in Q4 of last year, a little bit more in Q1. I expect that to come through through the next three quarters and we should be done with that, I hope this year. On the remodels, we're still early in that program. Right? We haven't spent a huge amount of that capital yet, so we're still working through a lot of those discussions with the landlords and the franchisees. I expect that'll pick up more in the back half of 2023 and then be heavier into 2024, would be my expectation on the pacing of that. Thank you. Thank you. Our next question comes from Sara Senatore from Bank of America. Sara, please go ahead. Hi. Thanks for the question. This is actually Catherine Griffin on for Sarah. We wanted to ask just about the sort of the difference between the order of magnitude for general and administrative expense and franchisee expense this quarter. It looked like the former was, you know, a lot higher than expected, whereas the latter was a little bit lower. Just wanted to sort of understand how we should be thinking about, you know, where the different brand investments are going, and then more generally, you know, sort of why G&A came in a lot higher than expected, since I think the expectation was that, you know, that pace of growth was going to slow. Yeah. Thanks for the question. It's Matt here. I'll take the question. On G&A, I think there might be some comparability differences in terms of the numbers that you're looking at. You know, we shared some commentary here on segment G&A. I think you may be including some additional G&A items that, you know, make that comparability a little bit different. On segment G&A, we saw the growth rate at just a touch above 3% year-over-year in the quarter, which was a pretty significant moderation from what we were seeing in 2022 and 2021, which was double digits. You know, I think we talked about the last couple of quarters that we expect to see a reduction in segment G&A growth this year. We did see that start to flow through in the first quarter. We have invested a lot over the past year or 2, you know, to elevate our resources in critical areas of the business, and we feel like we're in a good position and on track to continue to see that year-over-year moderation of G&A in 2023 versus 2022. As it relates to SG&A expenses, I think part of that would be related to the bad debt shift year-over-year, which we called out, was a positive benefit year-over-year, given the significant bad debt that we incurred in Q1 of 2022 related to Russia. Within that, we also saw an improving trend in the BKUS bad debt, which was about $7 million in the fourth quarter, and down to $3 million in the first quarter here. We feel good, as Josh and Patrick talked about, we feel good about the progress in the BKUS business. You know, based on the current environment and the improvements that we're seeing, we would expect 2023 bad debt to come in below 2022. Thanks for the question. Okay, thank you. Thank you. Our next question comes from Jon Tower from Citi. Jon, please go ahead. Great. Thanks. Another one on BK US. Traffic was negative still in the quarter, and that was despite, I think, the weather being favorable and the Omicron lapse year-over-year, and I think the Reclaim the Flame kinda showing up somewhat in the period. Where did you see the weakness, either dayparts or weekdays? More importantly, when do you expect the Reclaim the Flame plan to start translating into positive traffic growth for the brand? Yeah, John, thanks for the question. As I mentioned a little bit earlier, traffic was modestly negative for the quarter. I think we are very focused on moving the traffic to the positive category over the course of this year. I think what's encouraging to us is that we are seeing sequential improvements. The traffic was more negative in Q4 and got a little bit better in Q1. We're seeing a stabilization in sort of our monthly traffic levels, which is very encouraging to us. I think the team is highly focused on growing traffic as we move through the remainder of this year. I think we're expecting to see some moderation in pricing increases. We're focused a lot on operations. That's gonna be kind of a big driver of improvements in traffic. We're focused on continuing to deploy the Fuel the Flame agreement. As mentioned a little bit earlier, we're still very early in that. We haven't spent that much of it in the first quarter. I think the advertising, both the dollars and the quality of the advertising, are one of the big drivers that we expect as we move into the latter half of this year. Got it. Thanks. Thank you. Our next question comes from Jeffrey Bernstein from Barclays. Jeffrey, please go ahead. Great. Thank you. Just a follow-up on that, in a broader traffic question. It does feel like most are expecting a broader consumer slowdown as we move through this year. We're hearing some talk about early signs already, including perhaps your largest burger peer to a certain degree. Just wondering how you think about the fast food segment broadly or perhaps Restaurant Brands in particular. I think, Josh, you actually just mentioned that traffic may be actually stabilizing of late. I'm just wondering, within RBI, are there any signs of a change in consumer behavior? Perhaps less delivery, less add-ons, pushback from pricing, any kind of sign that we're seeing early signs of slowdown? Maybe, Patrick, you can compare it to what you think the resiliency of the pizza category, kind of how fast food broadly compares to pizza. Thank you. Yeah. Jeff, thanks for the question. Just a couple of thoughts. One, from a macro perspective, we feel like we're really well positioned in any macroeconomic environment. You know, what we do is, you know, in quick service restaurants, we provide convenient and affordable food every day. I think just overall from a big picture perspective, we're in a good spot regardless of the macro environment that we're in. You know, in terms of what, you know, key drivers are of traffic and sales in our industry, I think the biggest one really is employment. That's really what drives, you know, our guests having money in their pockets and being out and about. That is probably the kind of the highest correlation item that we see towards our sales and traffic. The fortunate thing is that employment in the U.S. continues to be really good. I think that's reflecting a bit in some of the industry momentum. Overall, we feel pretty good about where we are. As I said, we're very focused on growing traffic as we move through the course of this year in those U.S. businesses. Yeah. Jeff, the thing I'd add to that is, first of all, remember, you know, Tim's is 40% of our earnings, and if anything, there's still a tailwind from increased mobility, year-over-year in Canada. You know, that business generating really nice traffic growth, you know, we feel pretty darn optimistic about because, you know, you're continuing to have more mobility, year-over-year in Canada. I would just emphasize, and you're saying how does it compare to pizza. I'd emphasize what Josh said, which is, this category is driven by employment more than anything else. If people are working, then the convenience of what our category offers is compelling. Even if there's a slowdown, if you have employment levels continue to be strong as they've been, then, you know, I'm pretty optimistic about the category overall. Again, I would hold Tim's kind of separate from that. Employment is also important there, you also have the added tailwind of year-over-year increases in mobility. Thank you. Our next question comes from Eric Gonzalez from KeyBanc Capital Markets. Eric, please go ahead. Hey, thanks for the question, and congrats on the strong improvement this quarter. You made a comment at a recent investor conference that the BKUS gross margin is worth about 200 basis points for the first quarter. Can you talk about what that might mean in the context of your target to get back to that $175K by the end of 2024? How much more margin expansion would you need to get there? How much maybe was driven by the reduction in discounts? On the topic of profitability, you know, clearly you had some really strong results at Tim's. Anything you can tell us about the profitability in the quarter relative to that $220K that you mentioned last year? Thanks. Yeah. Thanks, Eric. I'm happy to take that. You know, we did see some meaningful improvement in gross profit margins and also in overall franchisee EBITDA in the first quarter for Burger King US. As Matt had mentioned, you know, some of that was driven by gross margin evolution. You know, I think Tom and the team have done some really thoughtful things in trying to get gross margins back to a much healthier place, and that's reflecting itself in the four-wall EBITDA improvements that we're seeing there. That gives us a lot of encouragement to see both sales and profits moving meaningfully in the right direction for BKUS. I think it gives a lot of confidence to our franchisees now seeing the early results of the Reclaim the Flame plan. Good, good evolution overall. We'll be focused on keeping that up through the remainder of the year. I also did mention the results at Tims. You know, vast majority of that was driven by the sales growth. You know, we were in the healthy double digits for same store sales. You know, that also translated into much better four-wall EBITDA at Tims in Canada in the fourth quarter. Or no, sorry, in the first quarter of 2023. We had a bit of a soft quarter last year with a bit of gross margin pressure in the prior year because of some of the commodity cost increases that had come through. We were pleased to see that turn around. I think our franchisees are feeling better about that momentum too. Thank you. Thank you. Our next question comes from David Tarantino from Baird. David, please go ahead. Hi, good morning. Another question here on Burger King US. Can you maybe frame up what percentage of the system is in that kinda A and B category from your, you know, how you score your franchisees? Just so we can understand what the potential, you know, upside is as you move towards your goal. Maybe, you know, where are you today versus where you ideally wanna be on that percentage. Then maybe a secondary question is, can you maybe share some details on how that cohort, the A and B stores, performed on a year-over-year basis in Q1 relative to the lower cohorts? Yep. Thanks, David. I'll try to hit on a number of those. So the A and B operators within BK-US are the vast majority of the overall franchisees and stores. There's still a big opportunity in the lower ranked ones. You know, I would say ideal state is nearly all of our restaurants are in that A and B category, so that is absolutely our North Star. That's what we're driving towards. I can tell you that the performance, you know, recently of those A and B stores on both the same store sales, same store traffic, and their EBITDA levels are all meaningfully higher than the DNF. you know, we see a big performance dispersion between those groups of stores, which is why we're so focused on moving more of our stores and more of our franchisees into those higher rankings. Last thought I would just share with you on this front. Interesting one, important one, you know, with respect to a more inflationary environment. You know, when you step back in our industry, a decent rule of thumb that people often use is as you take pricing, you know, if you take 1% of price, you probably lose about 0.4% of traffic, so you get kind of a 60% flow through on that. What's really interesting that we see that just reinforces our focus on operations is that our A and B operators see significantly higher flow through rates of price increases than our lower ranked operators. It makes sense. You know, guests are willing to pay more when they get a great experience and less so when it's not. It just reinforces our focus in this environment in making sure that all of our restaurants are operating at a high level. That's what drives the results of those restaurants and the results of the franchisees. Great. Thank you. Thank you. Our final question comes from Gregory Francfort from Guggenheim Partners. Gregory, please go ahead. Hey guys, thanks for taking the question. I just wanted to follow up on Burger King US. Can you update us on any metrics that are showing the operational improvements in the Burger King US business? I think you guys have talked about some of the complaints ratio statistics, but maybe either updating that number or speed of service or turnover, menu complexity. What metrics are you most focused on judging that improvement and what's the update there? Thanks. Greg, a couple of points there. One, we look at a metric called ACR or it's our all complaints ratio. It's essentially kind of how many guest complaints that we get indexed by transactions at our restaurants. That's a big focus. It's one of the metrics that's most highly correlated with restaurant performance and particularly same store sales of restaurants. If we have fewer complaints, generally means we're giving a much better guest experience and tends to be highly correlated with improved same store sales. We've seen that ratio improve for 7 quarters straight. I think Tom and his team have been very focused on it and have gotten the whole system focused on that. That ACR or all complaints ratio metric is one of the important components of our franchise success system. Those franchisee success scores that we talk about and that produce those letter grades that I mentioned. Franchise success captures a few other metrics that we look at, just the things you mentioned, things like speed of service, retention of team members, training of team members. We've also seen essentially all the components of franchise success move in the right direction over the last few quarters. Pretty universal progress there, across those, and we're seeing that in higher, franchise success scores for the system. Thank you. That is now the end of the Q&A session. I'll now hand back over to the management team for closing remarks. Great. Well, thank you everyone for joining us for our earnings call this morning. We really appreciate you participating. Appreciate the questions. We're happy with the performance for the quarter and are very thankful to all of our team members, restaurant team members, franchisees around the world for their hard work. We look forward to updating you again soon on our Q2 call. Thanks everyone. Have a great day. This concludes today's call. Thank you for joining. You may now disconnect your lines.