Restaurant Brands Intl — Financial Results
Core Business Performance Improved Even as Reported Profits Fell
| Metric | 2025 | 2024 |
|---|---|---|
| Adjusted Operating Income | $2,584M | $2,402M |
| Income from Operations | $2,202M | $2,419M |
| Net Income | $1,075M | $1,445M |
The headline drop in net income is misleading. Adjusted Operating Income (which strips out one-time items like foreign exchange swings and acquisition costs) rose $182 million, with every one of the five core franchisor segments improving. The fall in reported net income was driven largely by a $209 million foreign exchange loss and a $114 million write-down on the Burger King China deal — neither reflects the day-to-day health of the franchise business.
System-Wide Sales Kept Growing, but Popeyes Is a Weak Spot
| Brand | System-Wide Sales Growth | Comparable Sales |
|---|---|---|
| Firehouse Subs | +8.6% | +1.1% |
| International | +10.7% | +4.9% |
| Tim Hortons | +3.0% | +2.7% |
| Burger King (US) | +0.9% | +1.5% |
| Popeyes | -0.7% | -3.2% |
Comparable sales (sales at restaurants open at least 13 months, a measure of organic momentum) turned negative at Popeyes — down 3.2% in the US — after positive territory in 2024. Every other brand held positive comparable sales. The International segment was the standout, crossing $20 billion in system-wide sales with strong growth across Burger King and Popeyes locations outside North America.
Burger King China Was Acquired, Then Quickly Handed Off to a Partner
RBI spent $151 million to acquire full control of Burger King China in February 2025, then agreed in November 2025 to fold it into a joint venture with private equity firm CPE. CPE now owns 83% and invested $350 million of new capital into the business; RBI retained a 17% stake and a board seat. The transaction triggered a non-cash $114 million charge in 2025. Going forward, RBI will collect franchise royalties from the joint venture rather than running the restaurants directly — a cleaner, asset-light arrangement.
Burger King's "Reclaim the Flame" Remodel Program Is Still Mid-Execution
Burger King is partway through a multi-year investment plan of up to $700 million. The advertising and digital spending portion ("Fuel the Flame") wrapped up at end of 2024. The physical restaurant upgrade portion ("Royal Reset") has $176 million spent out of a planned $550 million as of year-end 2025, with the program running through 2028. The BK segment's Adjusted Operating Income jumped $58 million year-over-year, partly because $61 million of one-time marketing support spent in 2024 did not repeat — so investors should watch whether underlying sales momentum holds.
The Carrols Burger King Restaurants Are Profitable but Thinly So
RBI owns roughly 1,087 former Carrols restaurants (company-operated Burger Kings) after acquiring the chain in 2024. In 2025, those restaurants generated $1.84 billion in sales but only $44 million in segment income — a margin of around 2.4%. Management has been explicit that it intends to refranchise (sell back to franchisees) the vast majority of these locations over time. A goodwill impairment test flagged that this unit's carrying value of $1 billion is only about 7% below its estimated fair value, meaning a change in assumptions could trigger a write-down.
Tax Rate Jumped Sharply, and It Is Not Going Away Soon
The effective tax rate rose from 20.1% in 2024 to 28.7% in 2025. Contributing factors include new OECD Pillar Two minimum tax rules (a global framework requiring large multinationals to pay at least 15% tax in each country), Canadian interest deduction restrictions, and a one-time charge related to internal reorganizations. Management flagged that the reorganization charge should partially reverse in 2026, but the Canadian restrictions are expected to keep cash taxes elevated for several more years.