John Ivankoe: Hi. Thank you. Josh, in your prepared remarks, you mentioned, you know, franchisees that were focused — focusing on quality over quantity in terms of, you know, their bigger remodels. And obviously that’s interesting, especially when we talk about scrapes and rebuilds that can well exceed $1 million per project, I think up to $1.8 million per project. So, you know, can you talk about what that means for you? You know, as you kind of think about, you know, doing 800 units for 200 million, I think the numbers are correct me. But, you know, through 2025, might we expect, you know, a lower number of units that are done with a higher contribution but a higher sales lift. Just, you know, dive in a little bit more, you know, if there are any implications on that comment in terms of the timing and the cost of the number of projects you know, that you expect to accomplish in the next couple of years. Thank you.
Josh Kobza: Thanks, John. So we are seeing a higher mix to your point of both scrapes and what we call full remodel. So that’s a more scope heavy remodel. And I think that’s a great thing. It means our franchisees are really investing for the long-term. And those types of remodels definitely have the highest sales uplifts. By far they make the most impact on the experience of both our guests and team members. So we’re really happy to see that focus from our franchisees and kind of shared point of view on making big investments for the long-term. To your point, that will likely shift a little bit the spend where it might be a little bit higher contribution for unit, a little bit lower number of units within that mix. But I would tell you we think that’s a positive thing. We want to see the right investments made. That’s the big shift we’re trying to make in this program. And we think that’s what’s going to produce the best business results over the medium to long-term.
Operator: Our next question comes from Eric Gonzalez with KeyBanc Capital Markets. Your line is open.
Eric Gonzalez: Hi. Thanks for taking the question. Sounded like you made a lot of progress on the digital side this quarter, particularly at BK US where I think I heard you saw 40% improvement in digital sales. So maybe you can give us a few more highlights on the progress we’ve made on the technology front, and help us understand more about your aspirations to make the brands more digital over time, and how you’re measuring the return on those investments. Thanks.
Josh Kobza: Thanks, Eric. You’re absolutely right. We made a lot of progress in the quarter. We were up, I think over 40% in terms of digital sales at both Burger King and Popeyes. I think those teams are doing a really nice job on getting all the basics right. They’re making sure the apps are faster. They’re really learning how to work well with the delivery business. So they’re growing that business. And I think importantly with Burger King, we’re starting to make some progress figuring out kiosks. And you go back a few years. We had started to bring kiosks to the US. There wasn’t so much consumer uptake. And I think that condition has really changed. You know, we’ve started to pilot in more and more of our Burger King company restaurants, and we’re seeing tremendous results.
The vast majority of the in-restaurant tickets are all going through these kiosks. So that’s a lot of what’s driving that 28% number that I mentioned in terms of the digital sales at company restaurants. So I think the US is ready for kiosks now and we’re likely to see a faster rollout of those around the world. You know we’ve seen it in all of our international markets. I mentioned earlier, we’re over 50% of our international markets have been converted to kiosks. And it really transforms the guest experience and the team member experience especially when you go kind of all in on kiosks and convert the whole restaurant makes it really clear for the guests, give them, gives them time and kind of a no stress ordering experience. That tends to also lead to higher order values, which is good.
And it also reduces stress on the team members. You take away that sort of stressful interaction at the front counter for both sides and the team members can focus more on producing a really high quality meal and delivering it in a kind way to the guests. So I think this is a great thing for the business. It’s exciting that consumers are more accepting of it in the US than they were a few years back, and it’s something that will likely start to roll out pretty rapidly across all of our US businesses. Last point I would just make, Eric, on your question regarding our aspirations in digital. I tell you, my point of view is we need to get this business to 100% digital. We should have all of the order taking done through digital ordering channels over time.
We’ll have to see exactly what that looks like especially in a drive thru. But I’d say that, that’s sort of our North Star of where we want to go with the business. We have that in quite a number of our restaurants in international markets and it really improves the operation of the whole restaurant. Patrick, anything you want to add?
Patrick Doyle: The only thing I’d add is, you know, Josh and I were in stores mentioned in Paris that are 100% digital because they don’t have a drive thru, it’s 100% kiosk. It is so much better of an experience, not only for the customers, but for the people working in the restaurants. It’s better for profitability. I mean, everything you’ve heard from us and frankly, you’ve heard from other big players and it’s a big point of leverage for scale businesses versus smaller players to be able to roll this out into the restaurants, have it work, improve the efficiency of the restaurants, the customer satisfaction. I mean, it just, it is a win on every single front. And so it is clearly where we’re going to be going as rapidly as we can. And frankly, you’re going to see it with other players as well because it just it’s a better way to do business.
Operator: Our next question comes from Sara Senatore with Bank of America. Your line is open.
Sara Senatore: Great. Thank you. I have a clarification and then a question on Tims Canada. Just the clarification is you mentioned that the BK remodel lifts were better than expected. I think the last number that we saw was something like 12% sales. So just trying to understand if you’re saying that the sales lifts are actually higher than that or if you could quantify it. And then on Tims Canada I know you said you’re taking share of lunch, but the PM food sales increase is 7% with slower than the system-wide sales growth. So is that just a slower growing daypart? Or is there less of a tailwind from mobility there, just as the economy reopened? Just trying to reconcile share gains but a slower growth than the broader business. Thanks.
Josh Kobza: Yes. Sara, on the first one on BK remodels. What I was referencing is what you said that we are seeing in the initial remodels recently. We’re seeing higher than that 12%. I’d say we should let us get a few more data points, a little bit more time before we update any of those numbers. But we’re very pleased to see that we’re coming in above what we’re seeing historically. In terms of Tims Canada. I think we have made some progress on the PM food side. To your point, the sales growth in the PM day food — in the PM day part is pretty similar to what we’re seeing overall in the market. So we’re looking to make more progress there next year. We have some things in the pipeline that I think will allow us to do that, and a lot of that will probably come in 2024.
