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Restaurant Brands' Burger King Aims to Expand in Canada

In an effort to drive sales, Restaurant Brands International Inc.’s QSR Burger King is planning to expand its footprint in Canada. Recently, the company announced that it intends to open more than 100 Burger King restaurants in Ontario and Manitoba in the next five years.

Furthermore, Burger King Canada has extended its partnership with Redberry Restaurants ("Redberry") by five years to boost the number of restaurants in the country by 25%. As part of the deal, the company expects to open nearly 10 restaurants in Southwestern Ontario by 2020 to offer guests the iconic flame-grilled Whopper sandwich, chicken fries and other Burger King favourites.

Meanwhile, Matt Wright, general manager, Burger King Canada, stated that "Premium ingredients and signature recipes have defined Burger King for 50 successful years in Canada. We're excited that even more Canadians will be introduced to the iconic Burger King brand and our great tasting food."

Backed by strong brand presence, shares of Restaurant Brands have gained 26.8% so far this year compared with the industry’s 18.4% rally.

Expansion Efforts — Key Growth Driver

To expand its brand presence globally, Restaurant Brands is fortifying its presence in existing markets and entering new markets. Also, it continues to evaluate opportunities to speed up international development of all the three brands by establishing master franchisees, with exclusive development rights as well as joint ventures with new and existing franchisees.

Currently, Burger King has more than 26,000 restaurants worldwide, which includes more than 18,000 restaurants. During third-quarter 2019, the brand achieved its highest comparable sales growth since 2015. Comps grew 4.8% compared with 1% rise in the prior-year period.

As part of its international growth strategy for Burger King, Restaurant Brands created master franchise joint ventures in various markets across Europe, the Middle East and Africa (“EMEA”), the Asia Pacific (“APAC”), and Latin America and the Caribbean (“LAC”). It also received a meaningful minority equity stake in each joint venture. The company’s master franchise and development agreements in a number of markets across these regions, including Japan, France, Russia, Brazil, Spain, Belgium, China, Turkey and Korea are also commendable.

Zack Rank & Key Picks

Restaurant Brands has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the same space include Chuy's Holdings, Inc. CHUY, Chipotle Mexican Grill, Inc. CMG and Dunkin' Brands Group, Inc. DNKN. While Chuy’s sports a Zacks Rank #1 (Strong Buy), Chipotle and Dunkin carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chuy’s, Chipotle and Dunkin' long-term earnings are expected to witness 17.5%, 19.7% and 10.9% growth, respectively.

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Restaurant Brands International Inc. (QSR): Free Stock Analysis Report
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