Burger King’s Local Ad Cuts Hurt Restaurants

August 5, 2014

Burger King’s (BKW) largest franchisee, Syracuse (N.Y.)-based Carrols Restaurant Group (TAST), says a lack of advertising is partly to blame for its lower-than-expected sales in the second quarter.

Comparable sales at Carrols’s 560 Burger King restaurants decreased 2 percent, and total restaurant sales fell 2.8 percent, the company announced on Tuesday. “Our sales trends were weaker than anticipated in the second quarter due to several factors, but we believe were most significantly impacted by a reduction in spending on local advertising compared to the second quarter of 2013,” Carrols Chief Executive Officer Daniel Accordino said in a press release. Accordino also cited weak consumer spending and fewer restaurant remodels (renovations tend to boost sales) during an earnings call on Tuesday.