Carrols Restaurant Group Stock

Carrols Restaurant Group, Inc. operates as a restaurant company in the United States.

The company operates quick service restaurant brands, Burger King and Popeyes, with restaurants located in 23 Northeastern, Midwestern, Southcentral and Southeastern states. The company serves an average of approximately 460,000 guests per day at its restaurants.

Burger King Restaurants: The company is the largest Burger King franchisee in the United States, based on number of restaurants, and has operated Burger King restaurants since 1976. Burger King restaurants are quick service sandwich restaurants that feature the popular flame-grilled Whopper sandwich, as well as a variety of hamburgers, chicken and other specialty sandwiches, french fries, breakfast items, snacks, onion rings, soft drinks and more.

The company operates Burger King restaurants located in restaurants located in 23 Northeastern, Midwestern, Southcentral and Southeastern states.

The company operates its Burger King restaurants under franchise agreements with Burger King Corporation (BKC). Its Burger King restaurants are typically open seven days per week and generally have operating hours ranging from 6:00 am to 11:00 pm, with later hours in certain markets or on weekends.

The company’s existing Burger King restaurants consist of one of several building types with various seating capacities. Its typical freestanding restaurant is approximately 2,800 to 3,100 square feet with seating capacity for 45 to 65 guests, drive-thru service windows and adjacent parking areas. Almost all of the company’s restaurants are freestanding.

Popeyes Restaurants: The company is the eighth largest Popeyes franchisee in the United States based on number of restaurants. Popeyes restaurants are quick service chicken restaurants that feature a Louisiana-inspired home cooking styled menu, including fried chicken, chicken sandwiches, chicken tenders, fried shrimp and other seafood, red beans and rice and other regional offerings. The company operates Popeyes restaurants in seven Southeastern states.

Business Strategy

The company’s primary business strategy is to increase restaurant sales and improve guest traffic.

Seasonality

The company’s business is moderately seasonal due to a number of factors, such as regional weather conditions and the timing of holidays. Due to the location of the company’s restaurants, sales are generally higher during the summer months than during the winter months.

Burger King and Popeyes Franchise Agreements

Each of the company’s Burger King restaurants operates under a separate franchise agreement with BKC and each of its Popeyes restaurants operates under a separate franchise agreement with PLK. The company’s franchise agreements with BKC and PLK generally require, among other things, that all restaurants comply with specified design criteria and operate in a prescribed manner, including utilization of a standard menu.

As of January 1, 2023, the company had four Burger King franchise agreements due to expire in 2023, eight Burger King franchise agreements due to expire in 2024 and nine Burger King franchise agreements due to expire in 2025, as well as 52 that expired prior to the end of 2022. As of January 1, 2023, the company had one Popeyes franchise agreement set to expire in 2023, four Popeyes franchise agreement set to expire in 2024 and 12 Popeyes franchise agreements set to expire in 2025, as well as 13 Popeyes franchise agreements that expired prior to the end of 2022.

Digital

BKC and Popeyes Louisiana Kitchen, Inc. (PLK) have invested heavily in launching a digital platform that integrates with major third-party delivery service providers and provides a seamless ordering, payment, delivery and drive-thru experience for the company’s guests. In the BKC and PLK platforms, guests can place orders through a website or mobile app and have the product ready for pickup or delivered by a third-party partner. As of January 1, 2023, the company had installed outdoor digital menu boards at all Burger King and Popeyes restaurants.

Suppliers

The company operates as a member of a national purchasing cooperative, Restaurant Services, Inc., which it refers to as ‘RSI’, created for the Burger King system. RSI is a non-profit independent purchasing cooperative that is responsible for sourcing the company’s products and related supplies and managing relationships with approved distributors for the Burger King system. For its Burger King restaurants, the company is required to purchase all of its foodstuffs, paper goods and packaging materials from BKC-approved suppliers at prices negotiated by RSI. The company primarily utilizes four distributors, McLane Company Inc., Lineage Foodservice Solutions, LLC, Reinhart Food Service L.L.C and Performance Foodservice, to supply its Burger King restaurants with the majority of its foodstuffs. As of January 1, 2023, such distributors supplied 31%, 30% 29% and 10%, respectively, of the company’s Burger King restaurants.

For its Popeyes restaurants, the company is a member of a national purchasing cooperative, Supply Management Services, Inc. (SMS). SMS is a non-profit independent purchasing cooperative that is responsible for sourcing certain of its products and managing relationships with approved distributors for the Popeyes system. Popeyes utilizes five distributors, five for poultry products and two for all other products. For the company’s Popeyes restaurants, one distributor, Customized Distribution Services, supplies 69% of its poultry products and 91% of its non-poultry products.

Trademarks

As a franchisee of Burger King and Popeyes, the company also has contractual rights to use certain trademarks, service marks and other intellectual property relating to the Burger King and Popeyes concepts. The company has no proprietary intellectual property other than the Carrols logo and trademark.

Government Regulation

The company is subject to the federal Fair Labor Standards Act and various other federal and state laws governing such matters as the handling, preparation and sale of food and beverages; the provision of nutritional information on menu boards; minimum wage requirements; unemployment compensation; overtime; and other working conditions and citizenship requirements.

History

Carrols Restaurant Group, Inc. was founded in 1960. The company was incorporated in 2019.