What went wrong? Whoppers cost the Carrols Restaurant Group $8 million in sales.
Carrols Restaurant Group is one of the largest Burger King franchisees in the country. It operates more than 1,000 branches out of a total of around 7,500 Burger King branches. an important way. What happened? This is how it happened:Burger King ran a promotion offering discounts on Whopper and Whopper Jr. sandwiches. Most locations offered 2 Whopper Jr. for $4, 2 Whopper for $5, and 2 Double Whopper for $6. When customers asked for any of these offerings, the cashier would try to sell them and see if they’d like to add fries or a drink to their meal.
When a customer bought fries and a drink, an additional “Whopper Combo Meal” discount was added alongside the previous Whopper promotion. food.This combination of discounts resulted in an extremely low price for groceries, which severely impacted the profitability of Carrols Restaurant Group.
Because two different promotional discounts were combined when they shouldn’t have been, Carrols Restaurant Group lost money. A lot of money. After accounting for interest, taxes, depreciation and amortization (EBITDA), the company’s earnings declined by $7.3 million.
In the quarter in which this incident occurred, Carrols Restaurant Group reported a net loss of $6.8 million (15 cents a share) compared to a net income of $3.6 million in the same quarter last year. The bug was first discovered in late August. Carrols found his store’s sales increased by just 4%.5%, which was below Burger King’s overall comparable growth of 5%.
Carrols typically outpaces the growth of other Burger King franchisees, so they did their research. The problem was discovered in late August and the bug started in early June when the Whopper discount campaign was first launched. It was quickly fixed, but the damage was already done. In total, nearly $8 million in profits were lost as a result of this “double discount” on the Burger King Whopper sandwich.