And — so most of the store growth is going to come ultimately from outside of the U.S., Popeyes is doing a great job in the U.S. with store growth. But the international business is going to be the engine on stores for decades to come, and I feel really good about the state of that business, the investments we’ve made there, the team that’s in place and how that’s going to generate store growth going forward.
Operator: Our next question today comes from Brian Bittner from Oppenheimer & Company.
Brian Bittner: Congratulations to Josh and Jose, and welcome back, Patrick, good to hear from you. As it relates to improving franchise profitability, which is obviously a huge part of your mandate, the company’s mandate, franchisee profitability, as obviously, is down a lot from when it was last disclosed in 2018. I believe at that time, Tim Hortons was at $320,000, it’s now $220,000. Burger King was at, I think, $180,000, it’s now at $140,000. So outside of improving sales and improving comps, what do you believe are the other more controllable opportunities, again, outside of sales leverage as it relates to executing against this mandate to improve franchisee profitability? Joshua Kobza, Restaurant Brands International Limited Partnership – COO of Restaurant Brands International Inc Yes.
Good morning, Brain, thanks so much for the question. I think a few different thoughts on this one. And I think it’s been a great initiative from Patrick to bring franchise profitability kind of even more to the forefront here, it’s something we focus on for a long time, but now we’ll be talking about with you all as well and a bunch internally. I think to the points you made, first of all, sales and traffic are the start of this equation. So we do need to focus there. And I think the good news on that front is that we have quite a bit of momentum in some of our core markets. We had a great quarter at Tim’s, and we’re starting to see some of the results in BK U.S. from our Reclaim the Flame plan. So I think we’ve got some good momentum on the sales side, and that will help us a lot.
I think on the stuff below sales, we did see a tremendous amount of inflation, especially across the COGS lines over the last couple of years. And I think there’s a little bit of better news coming on that front. We are seeing some moderation in COGS inflation, and I think that really helps. If we can put together the combination of driving some sales and traffics back into the restaurant, plus have some moderation in some of those cost lines, I think that’s the formula that we’ll be focused on going forward, and I think can drive some meaningful improvement in franchise profitability this year.
Operator: Our next question comes from Dennis Geiger from UBS.
Dennis Geiger: Great. Patrick and Josh, congratulations. And Jose, best of luck on the transition. I appreciate all the detail and the commentary on the franchisee profitability and the strategic focus here. Just specific to the Burger King U.S. and perhaps Tim’s Canada. The focus clearly on improving 4-wall profitability, but wondering if there’s any thoughts to add with respect to what closures could look like relative to historical levels? Does that need to change at all, as we get the system in an even better place or is it really the focus on the profitability and then that number doesn’t need to need to change at all? Joshua Kobza, Restaurant Brands International Limited Partnership – COO of Restaurant Brands International Inc Yes.
