Executive Summary / Key Takeaways

• Strategic Simplification and Franchisee Focus: Restaurant Brands International (RSTRF) is actively streamlining its complex portfolio by refranchising company-owned Burger King Carrols restaurants and seeking new partners for Burger King China, aiming for a nearly 100% franchised, capital-light model that prioritizes franchisee profitability and long-term growth.
• Consistent Operational Outperformance: Brands like Tim Hortons Canada and the International segment consistently deliver strong comparable sales and traffic growth, often outpacing industry peers, driven by relentless focus on operational excellence, menu innovation, and enhanced guest experience.
• Technological Edge for Efficiency and Engagement: RSTRF is strategically investing in digital and in-restaurant technologies, including kiosks, new espresso machines, and "Easy to Run" kitchen systems, to improve speed of service, order accuracy, and overall operational efficiency, while deepening guest engagement through loyalty programs and personalized marketing.
• Robust Financial Outlook Despite Headwinds: Despite a dynamic macro environment and commodity cost pressures, RSTRF maintains its guidance for at least 8% organic Adjusted Operating Income (AOI) growth in 2025, supported by disciplined cost management, strategic investments, and a strong pipeline for net restaurant growth in key markets.
• Burger King U.S. Turnaround Gaining Traction: The multi-year "Reclaim the Flame" plan for Burger King U.S. is yielding positive results, with consistent outperformance against the burger QSR category, driven by significant remodels, operational improvements, and a balanced marketing strategy.

A Global QSR Leader's Strategic Evolution

Restaurant Brands International Limited Partnership (RSTRF), founded in 1954 in Toronto, Canada, has evolved into one of the world's largest quick-service restaurant (QSR) companies. Operating through a predominantly franchised model, RSTRF oversees a diverse portfolio of iconic brands: Tim Hortons, Burger King, Popeyes Louisiana Kitchen, and Firehouse Subs. As of September 30, 2025, the company's footprint spanned 32,423 restaurants across more than 120 countries and territories, with over 90% of these locations being franchised. This extensive global network and multi-brand strategy are foundational to RSTRF's market positioning, allowing it to cater to varied consumer preferences across different dayparts and geographies.

The company's overarching strategy centers on driving sustainable growth through operational excellence, continuous menu innovation, and a strong value proposition for guests and franchisees alike. Recent strategic moves, including the acquisition of Carrols Restaurant Group (TAST) in May 2024 and Popeyes China in June 2024, followed by Burger King China in February 2025, highlight a deliberate effort to streamline operations and enhance brand performance. These acquisitions led to the creation of the Restaurant Holdings (RH) segment, a temporary holding for company-owned restaurants slated for refranchising, signaling a clear intent to return to a more asset-light, fully franchised model. This strategic simplification is crucial for maximizing long-term free cash flow generation and focusing resources on core franchisor activities.

Technological Edge: Driving Efficiency and Engagement

RSTRF is strategically leveraging technology to enhance its competitive moat, improve operational efficiency, and deepen guest engagement across its brands. This commitment to technological differentiation is integrated into both front-of-house customer experience and back-of-house operations.

At Tim Hortons, kiosk installations are a significant technological differentiator. These kiosks are on track to be in approximately 800 restaurants by the end of 2025, driving higher average checks and strong adoption among younger guests. This technology streamlines the ordering process, reduces wait times, and offers a more personalized experience. Furthermore, the rollout of new espresso machines is aimed at enhancing espresso beverage consistency and quality, a critical factor as the cold and espresso-based beverage categories continue to grow. The brand's digital prowess is further bolstered by its loyalty program, with over 7 million active Tims Reward members spending approximately 50% more on average than before joining. A new loyalty partnership with Canadian Tire (CTC.A), launching in late 2026, is expected to expand this base and deepen engagement.

Burger King U.S. benefits from technology integrated into its "Reclaim the Flame" plan. This includes investments in restaurant technology, kitchen equipment, and building enhancements as part of the "Royal Reset" initiative. These upgrades contribute to the mid-teens sales uplifts seen in remodeled restaurants, with an average of around $2 million in sales post-remodel. The focus is on creating a modern, efficient, and appealing restaurant environment that leverages technology for better service delivery.

For Popeyes, the "Easy to Run" initiative is a cornerstone of its operational technology strategy. This program aims to standardize processes, enhance technology, and introduce new kitchen equipment and a new production line. By the end of 2026, all U.S. Popeyes locations are targeted to feature cloud-based point-of-sale (POS) systems, digital drop charts, sticky label printers, order-ready boards, kiosks, and upgraded back-of-house equipment, including auto batter makers and improved hot holding units. These advancements are designed to enhance the team member experience, reduce wait times, and improve order accuracy, directly contributing to a more consistent and positive guest experience.

Firehouse Subs already boasts a digital mix of over 45%, the highest among RSTRF's home market brands, indicating strong customer adoption of digital ordering channels.

Across the organization, RSTRF is also exploring the broader application of Artificial Intelligence (AI) in its restaurants. Management is focused on how AI can improve the customer experience and enhance the efficiency and effectiveness of operations. This forward-looking approach to AI suggests a commitment to continuous innovation that could further differentiate RSTRF from competitors.

Compared to rivals like McDonald's and Starbucks , RSTRF's multi-brand approach to technology allows for tailored solutions. While MCD is known for its robust digital integration and SBUX for its advanced loyalty platforms, RSTRF's investments in specific in-restaurant technologies like Tim Hortons' kiosks and Popeyes' "Easy to Run" kitchens aim to address unique brand needs and operational challenges. This targeted technological roadmap is crucial for RSTRF to maintain its competitive edge, drive operational leverage, and enhance franchisee profitability, ultimately contributing to higher average unit volumes and stronger financial performance.

Segment Performance and Strategic Momentum

RSTRF's diverse brand portfolio contributes uniquely to its overall performance, with each segment executing tailored strategies to capitalize on market opportunities and address specific challenges.

Tim Hortons: A Pillar of Consistent Growth

Tim Hortons (TH) in Canada remains a powerhouse, contributing roughly 44% of RBI's operating profit. The brand delivered its 18th consecutive quarter of positive same-store sales in Q3 2025, with comparable sales growing 4.2% and significantly outperforming the broader Canadian QSR industry by approximately 3 points. This consistent outperformance is a testament to its "back to basics" plan, focusing on strong brand love, operational excellence, and affordable everyday value. Breakfast foods saw 6.5% growth in Q3 2025, driven by innovations like the Scrambled Egg platform. Total beverage sales grew 4%, with cold beverages surging 10% to record highs. Operational metrics are equally impressive, with guest satisfaction at record highs and speed of service reaching its fastest Q3 levels since 2019. The brand is on track to return to modest net restaurant growth in Canada in 2025, further solidifying its market leadership. In 2024, Tim Hortons surpassed $1 billion in AOI for the first time, underscoring its financial strength.

Burger King U.S.: Reclaiming the Flame

Burger King (BK) in the U.S. and Canada, representing approximately 17% of operating profit, is demonstrating a compelling turnaround. In Q3 2025, comparable sales grew 3.1% (3.2% in the U.S.), outpacing the Burger QSR category for many quarters. This progress is attributed to the "Reclaim the Flame" plan, which emphasizes menu innovation, operational improvements, and restaurant modernization. The "Whopper By You" platform and value offerings like $5 Duos and $7 Trios are resonating with guests. Operational surveys show revisit intent ranking among the top 3 of 12 QSR brands, reflecting improved consistency. Approximately 400 remodels are expected in 2025, with remodeled restaurants showing mid-teens sales uplifts and average sales of around $2 million post-remodel. While elevated beef costs present a near-term margin pressure for franchisees, the long-term vision to achieve over 85% modern image by 2028 remains intact. The increase in the franchisee ad fund levy from 4% to 4.5% starting in 2025, following the achievement of 2024 profitability targets, reflects strong franchisee alignment and commitment to brand investment.

Popeyes Louisiana Kitchen: Addressing Underperformance

Popeyes Louisiana Kitchen (PLK) in the U.S. and Canada experienced softer results in Q3 2025, with U.S. comparable sales down 2% and system-wide sales growth of 0.9%. Management expressed dissatisfaction, highlighting the need to refocus on core offerings (bone-in chicken, tenders, sandwich platforms) and deliver consistent value. Despite this, Popeyes boasts "the best chicken in QSR" and a relatively modern asset base, with about half of its U.S. system built in the last decade. The "Easy to Love" strategy, supported by an amendment to franchise agreements from 85% of restaurants, commits to increased national advertising rates (from 4.5% to 5% in year one, up to 5.5% by year three) and a remodel schedule to achieve a modern image across most of the system by 2030. This strategic alignment, coupled with the "Easy to Run" operational enhancements, aims to improve guest experience and drive future growth.

Firehouse Subs: Accelerating Development

Firehouse Subs (FHS) in the U.S. and Canada delivered a solid Q3 2025, with comparable sales up 2.6% and net restaurant growth of 7.7%, driving 10.7% system-wide sales growth. The brand has opened 100 net new restaurants over the past 12 months, a five-fold increase in pace since its acquisition. This acceleration is expected to continue in 2025, supported by a strong development pipeline. Firehouse Subs continues to outperform the broader sub sandwich category, leveraging its digital strength with a digital mix over 45%.

International: A Global Growth Engine

The International (INTL) segment, driving 26% of operating profit, is a significant growth engine for RSTRF. It accelerated meaningfully in Q3 2025, with system-wide sales growth of 12.1% and comparable sales up 6.5%. This strong performance reflects effective menu innovation, marketing, and operational execution across diverse markets. Burger King in the U.K. has surpassed $1 billion in system-wide sales, and Popeyes in the U.K. is set to open its 100th restaurant in November 2025, just four years after its debut. Popeyes is demonstrating strong traction across EMEA, with over 1,000 restaurants, and ranks among the top 10 Western QSR brands outside the U.S., growing system-wide sales by over 35%. Burger King China, despite being classified as discontinued operations, saw comparable sales grow 10.5% in Q3 2025, with improving unit economics under new local leadership, reinforcing its long-term potential.

Restaurant Holdings: Strategic Refranchising

The Restaurant Holdings (RH) segment, comprising acquired Burger King Carrols restaurants, Popeyes China, and Firehouse Subs Brazil, is a temporary segment aimed at strategic refranchising. Carrols' performance outpaced the system in Q3 2025 with 4.8% comparable sales, and remodels are delivering strong uplifts. The refranchising process for Carrols began ahead of schedule in Q2 2025, including the "Crown Your Career" program, which supports internal talent in becoming owner-operators. While early-stage investments in Popeyes China and Firehouse Brazil are expected to create a net AOI drag of approximately $7 million in Q3 and Q4 2025, these efforts are crucial for establishing a sustainable base for future growth under new partners.

Financial Health and Performance Trends

RSTRF's financial performance in 2025 has demonstrated resilience and strategic execution, particularly in driving profitability despite a challenging macroeconomic backdrop. For the nine months ended September 30, 2025, total revenues reached $6,968 million, up from $6,110 million in the prior year, primarily driven by acquisitions and increased supply chain sales. Income from operations for the same period was $1,581 million, compared to $1,784 million in 2024, impacted by increased net losses on foreign exchange and the non-recurrence of a $79 million gain from the Carrols Acquisition in 2024. However, net income from continuing operations for the nine months ended September 30, 2025, was $927 million, down from $1,084 million in 2024.

In Q3 2025, RSTRF reported total revenues of $2,449 million, an increase from $2,291 million in Q3 2024. Income from operations rose to $663 million from $577 million, and net income from continuing operations increased to $440 million from $357 million. This performance drove an 8.8% organic Adjusted Operating Income (AOI) growth and 10.7% nominal Adjusted EPS growth in Q3 2025, demonstrating significant operating leverage from disciplined cost management.

The company's liquidity remains robust, with $1,206 million in cash and cash equivalents and $1,248 million in borrowing availability under its Revolving Credit Facility as of September 30, 2025. Management believes this is sufficient to fund obligations, debt service, and capital spending for the next twelve months. RSTRF's capital allocation priorities focus on investing in high-ROI initiatives, maintaining a healthy dividend, and deleveraging. The company successfully repaid approximately $100 million on its Tim Hortons facility in Q3 2025, reducing its net leverage ratio to 4.4x.

Competitive Financial Standing

RSTRF's financial health, as reflected in its latest TTM ratios, shows a Gross Profit Margin of 8.03%, Operating Profit Margin of 23.92%, Net Profit Margin of 9.95%, and EBITDA Margin of 22.26%. Its Debt/Equity Ratio is 0.58, and its P/E Ratio stands at 23.30.

When compared to key competitors, RSTRF's multi-brand strategy offers diversification but presents unique financial dynamics. McDonald's (MCD) typically exhibits strong revenue growth and superior profitability margins due to its singular brand dominance and advanced digital integration. Yum! Brands (YUM), another multi-brand franchisor, often shows robust international expansion and strong profitability. Starbucks (SBUX) benefits from premium pricing power and strong cash flow from its loyalty programs. Wendy's (WEN) competes in the burger segment with a focus on value and drive-thru efficiency.

RSTRF's operating and EBITDA margins appear competitive within the QSR space. However, its P/E ratio of 23.30 is lower than MCD (25.43) and YUM (26.83), and significantly lower than SBUX (34.91), suggesting a potentially more attractive valuation relative to its earnings growth. This could reflect the market's perception of RSTRF's complexity or its ongoing turnaround efforts in certain segments. RSTRF's strategic refranchising and focus on operational excellence are designed to enhance franchisee profitability, which in turn fuels royalty revenues and strengthens RSTRF's own financial performance, allowing it to compete more effectively on efficiency and market share capture against its larger, more established rivals.

Outlook and Strategic Roadmap

RSTRF's forward-looking strategy is anchored by its long-term growth algorithm, targeting 3%+ comparable sales and 8%+ organic AOI growth on average through 2028. While acknowledging a dynamic environment, management is confident in delivering at least 8% organic AOI growth in 2025. This confidence is supported by a disciplined approach to cost management, including a projected reduction in segment G&A to the low end of the $600 million to $620 million range.

The company has updated its near-term net restaurant growth (NRG) expectations for 2025 to be slightly down from 2024, in the plus or minus 3% unit growth range, primarily due to the ongoing transition at Burger King China. However, RSTRF anticipates ramping back to 5% global NRG (approximately 1,800 net new restaurants per year) towards the end of the algorithm period, driven by positive growth across all home market brands and accelerated international expansion. This includes roughly 400 net units from North America, 1,100 from international markets (excluding China), and 300 from China as Popeyes accelerates and Burger King China returns to growth potential.

Capital expenditures and cash inducements are expected to be between $400 million and $450 million for 2025-2026, gradually stepping down to around $300 million after 2028 as the "Reclaim the Flame" plan concludes and Carrols restaurants are largely refranchised. This reduction in capital intensity is expected to generate a significant tailwind for free cash flow growth. The adjusted effective tax rate is projected to be between 18% and 19% for 2025, and adjusted net interest expense is expected to be around $520 million.

Risks and Challenges

Despite a compelling growth narrative, RSTRF faces several pertinent risks. Macroeconomic headwinds, including inflationary pressures and fluctuating consumer confidence, particularly in the U.S., could impact sales and franchisee profitability. Elevated beef costs, which increased high teens year-over-year in the Burger King U.S. commodity basket in 2025, present a near-term margin pressure, although management anticipates normalization over time. The underperformance of Popeyes U.S. in Q3 2025 highlights the challenge of maintaining consistent sales momentum in a highly competitive chicken QSR segment.

The ongoing refranchising of Carrols restaurants and the search for a new partner for Burger King China introduce execution risks and potential for continued AOI drag from early-stage investments in Popeyes China and Firehouse Brazil. Litigation, such as the class action complaints against Burger King regarding no-solicitation clauses and the Carrols acquisition fiduciary duty claims, could also pose financial and reputational risks. Furthermore, evolving tax legislation, like Canada's EIFEL rules, is expected to increase cash taxes, impacting liquidity. RSTRF's reliance on its franchise model, while a strength, also creates dependencies on franchisee financial stability and operational execution.

Conclusion

Restaurant Brands International is executing a clear, multi-faceted strategy to simplify its business, enhance operational excellence, and drive sustainable growth across its global portfolio. The company's commitment to franchisee profitability, coupled with targeted investments in technology and brand modernization, positions it to capitalize on its strong brand equity and extensive global footprint. While facing macroeconomic headwinds and the complexities of strategic transitions in segments like Burger King China and Popeyes, RSTRF's disciplined approach to cost management and its focus on fundamental improvements are expected to deliver on its 8% organic AOI growth target for 2025. The ongoing turnaround at Burger King U.S. and the consistent strength of Tim Hortons Canada and the International segment underscore the resilience of its business model. For discerning investors, RSTRF presents a compelling long-term investment thesis, rooted in its strategic evolution towards a more streamlined, technologically advanced, and franchisee-centric powerhouse poised for sustained value creation in the dynamic global QSR landscape.