Q4 2019 Earnings Call
Thanks, Chris and good morning, everyone.
Thank you for joining us on today's call. I'll begin my remarks today with a summary of our performance in 2019 which reflected the underlying strength of our Global business and the power of our growth algorithm.
Alvin Share My Views in the key drivers of our performance last year as well as our specific plans and priorities for 2020 on a Consolidated basis. We delivered strong results in 2019 our system with sales growth over 8% to thirty four billion dollars for the full year and nearly 10% to approximately $9 billion in the fourth quarter are 8% system-wide sales growth in 2019 included 5% unit growth to over 27,000 restaurants worldwide combined with over 3% Consolidated Global comparable sales growth our unit growth this year represents a solid continuation of growth relative to the gong shared with you at our investor Day in May of reaching forty thousand restaurants in eight to ten years as we grew our Global unit count by over 5% for the third year in a row.
the Consolidated system-wide sales growth of over
Percent that we delivered in 2019 was driven primarily by Burger King where system-wide sales increased over 9% and Popeye's or system-wide sales over 18% above Hortons system-wide sales dropped slightly in 2019. As our performance and Canada came in below our expectations despite her challenges attempts. We were able to achieve system-wide sales growth the high single digits on a Consolidated basis reflecting an important advantage of our scale and diversified model within our 8% Consolidated system-wide sales growth. We generated Consolidated off sales growth of over 3% which reflected a very healthy contribution from Burger King or comparable sales grew approximately 3.5% and an especially strong contribution from Popeyes. We're comparable sales over 12% for the full year.
At Popeye's comparable sales growth accelerate to over 34% in the fourth quarter driven by the relaunch of the chicken sandwich in November which led to nearly 38% growth in the US Bank. This has been a very exciting time for the Popeyes team. And in fact has been an exciting time for all of us who spent a long time in to us are and have never seen the kind of guests response for a single product launch like the one we had for a Popeye's chicken sandwich at Tim's comparable sales of negative 1.5% again primarily reflected week Top Line performance in Canada and represented a drag on our otherwise healthy Consolidated growth rate comparable sales at Sam's included a meaningful deceleration in the fourth quarter to -4.3 percent globally and -4.6 percent in Canada on top of our Consolidated comparable growth in 2019. We delivered over 5% growth in net units across our brand at Burger King. We expanded our Network by nearly 6% while the Popeyes we delivered unit growth of, New Jersey.
7% at
TENS unit growth was approximately 2% and for both Popeye's and Tim's our unit growth in 2019 reflected the very early stages of several recent and significant International Development deals with agent markets.
Turning a franchisee profitability. We saw a slight year-over-year drop at Burger King in the US do to cycle key High commodity prices but unit economics remain at a very healthy level as we close out the year off. This is true, especially for a new developments which have sales averaging over 60% higher than those at the Legacy restaurants in the closure program that we discussed at our investor day at Popeye's franchise wage increase substantially on top of an already strong base line boosted by the incredibly strong launch of our chicken sandwich. And finally at Tim's lower sales combined with some pressure from labor costs and part of Canada resulted in lower franchisee profitability year-over-year. However, franchisee profitability remains very healthy at Tim's in Canada. And the related unit economics are still some of the very best job industry. I'm going to start my brand commentary with Tim Hortons this morning. I approached the product Innovation and promotions over the last couple of years has led us to disappointing results for the quarter and the year.
There's clearly a sizable Gap.
Between what this brand is capable of and the performance we've delivered and I'm going to spend some time this morning sharing what we were doing now to return the business to the growth track. It should be on given the strength of the assets. We have them are you on your decline incomparable sales of -4.6 in Canada was primarily driven by the investments in our Rewards program. We're making to attract millions of Canadians to join and participate in our Tim's loyalty program which contributed approximately -3 per cent to a reported comparable sales figure our pursuit of a best-in-class loyalty program is focused on increasing the already exceptionally high level of Engagement wage relationship and personalized connectivity with our guests given Tim's existing dominant Market leadership position and brewed coffee. We believe this powerful marketing tool has the ability to not only help us defend off a continue to grow market share over time. We're building a platform that understands what our guests want and engages and rewards our guests for their loyalty with exciting offers and great value for money.
We think this platform will help us deliver continued long-term growth for the brand by driving incremental traffic and increase check average in our restaurant our loyalty Journey involves two important phases off. Our first phase has seen us attract more than seven point five million active loyalty members and for the last ten months they've been receiving a simple and compelling offer that provides a free copy or baked good after 7. It's to a restaurant as we have previously noted. We've attracted far more guests to our loyalty program far more quickly than we had planned and we currently have about 25% of these guests who have registered home and share their contact information with us our second phase of loyalty will encourage much higher levels of registration by making most of the menu accessible for redemptions and adding exciting tailored offers based on a purchase history. We're shifting from a visit to program to a points program for each purchase occasion earns you points that you can redeem for most of our menu items are Central priority in the second phase wage.
to drive digital registration
And unlock powerful tools, like sales intelligence and one-to-one marketing that will use to develop stronger relationships with our guests and drive incremental sales over time.
Our extensive research with guest indicates that a large majority of our guests will register over time to take advantage of our great offers and Fuller menu of Awards. This will in turn allow us to evolve the program into a ninja delivers incremental value two guests while generating incremental sales for the system. Guess who choose not to register will shift from a free reward after seven visits to a free reward after twelve visits.
The timing of the shift to the second phase is now last Friday. We initiated a major shift in our marketing around the program designed to communicate simple ways to register Via Mobile or on the web and always highlight the extra benefits available when you register.
We expect that loyalty will continue to be a drag on sales for the coming several quarters as we convert loyalty guests to registered loyalty guests and start deploying incremental offers at scale.
Will be delivering a more personalized experience to our guests that should bring more benefits and generate incremental sales in the latter part of 2020 and Beyond in addition to the impact of loyalty are comparable sales and q400 also reflected softness and lunch food which contributed approximately -1 per cent to a reported comparable sales figure our weakness in this area is attributable primarily to the sandwich and rap category. We're off this year did not match strong sales from our Crispy Chicken Wrap in 2018 over the past several months. I've made Tim Hortons in Canada my top priority and have examined our performance and processes in detail off the team has spent months this acting every part of the business conducting extensive new research spending considerable time with our restaurant owners identifying the underlying causes of our weak performance package again on the large areas of opportunity to drive sustained long-term improvements in the business.
after several months of hard work
Our team has emerged with a clear view of what we need to do to accelerate growth and profitability for our owners and for the brand. It's useful to start by acknowledging what made Tim Hortons that dominant brand and Mark in Canada. Tim Hortons had five informal founding values that we have spent quite a bit of time thinking about each value has been Key to Our Success in Canada over decades and remains relevant today. I'll be in a refreshed and modernized way when Tim's was founded back in nineteen sixty four these values embodied the ethos of a brand that would grow over decades to become one of Canada's most loved. First off. Tim's is always been obsessed with freshness and quality second. We made things simple for everyone third. We offered great value-for-money 4th. We believed personal relationships matter and fifth. We've always given back to the communities where owners live and work in our review of our tactics going back several years. It's clear we straight from these core values and we must log
adjust our strategy to reconnect
With them with that as a backdrop, I'd like to now summarize our plans for 2020. It starts with reorienting and reinforcing our team under axle Chuan who many of you have not had a chance to meet yet, That's tremendous experience having served as Global CMO of Burger King and more recently as Global CMO of Tim's where he's led the development of our fresh Brewers, welcome twenty20 and The Innovation Cafe axle and working shoulder-to-shoulder focused on building an experience team of Canadians that have deep expertise in the most critical areas of the restaurant business in Canada and North America. We've announced a number of meaningful changes including recently the appointment of a Canadian industry veteran as Chief sales and marketing officer in addition to well-established Canadian experts to lead our development restaurant technology and Communications efforts.
I've been working hard with the full team to put together a road map for 2020 our plan reflects a return to Tim's founding values and is designed to reinforce the core product categories that have made us famous over the years. There's no catchy name to the plan reflecting our mentality to simplify the business as we return to being the best that are Basics and embracing Our Heritage all while infusing some more modern features as we move forward with we focus our efforts around three key principles first elevating the quality of our core categories second innovating for growth from our core categories and third choice to invest in modernizing the brand within this framework. We've identified initiatives to support each of our principals some of which we've already seen progress against during the first quarter of 2020.
Let's go through each one.
Buy one elevating core quality is about reinforcing the most fundamental elements of our menu and raising the standard for products that bring millions of guests in to Tim Hortons every day.
Coffee sits at the very heart of Tim's identity and is one of the most important contributors to sales.
Breakfast food is another huge part of our business and it's been one of our strongest growing categories for the past five years while we already have a market-leading position in both areas. We plan to build on this life by committing ourselves to serve you the absolute best products in Canada in coffee. Tim's has an incredibly Rich history as Canada's local coffee shop and our cup is unambiguously the category Benchmark and the supply side. We truly have some of the best sourcing blending and roasting capabilities in the world resource 100% premium arabica beans which adhere to strict standards for Thursday and taste and have a long-standing in-house team of coffee experts that carefully monitors are roasting and grinding to ensure we meet the highest standard of quality while we've meaningfully differentiate ourselves in this respect. We continue to use decades-old brewing technology while the industry has evolved in ways that both enhance consumer tastes and improve efficiency and restaurants. We're addressing this opportunity head on with the rollout of fresh Brewers and wage.
information systems at every store across
Canada which we began towards the end of 2019 but is accelerating in 2020 compared with the coffee prepared in a traditional glass pots. Our guests have told us that the quality of coffee from our fresh Brewers wage is significantly better and more consistent on multiple Dimensions. The fresh brew system is already in place at over 2000 restaurants. And we expect to complete the accelerator roll out in the first half of this year in. Well, we'll be on air across Canada with TV digital and other marketing that highlights our leadership and coffee quality in a way that the Canadian public hasn't seen or heard for many years taking coffee prep a step further, but we also need to respond to changes in consumers taste preferences over time.
Based on our research a substantial percentage of Canadian consumers prefer skim milk with their coffee and a growing percentage particularly among younger guests prefer. Non-dairy Alternatives like almond milk bath up to this point. We have not offered these options to our guests and have lagged behind competitors. We're working quickly to address this and are launching these alternative Dairy options into the market this spring.
these adjustments May
Basic, but that's the point being the absolute best at the basics that we're already famous for. You've already seen progress around several initiatives to bolster a brewed coffee platform including last year's packaging update and you'll see considerably more progress as we move through 2020.
Improving our Brewing technology in-store enhancing options to customize and putting coffee front and center in our brand messaging are among our most important near-term areas of focus and there's more to come off. Let's talk about breakfast which has been a core strength for us for many years while our research has demonstrated our unequivocal leadership and sweet Foods is also pointed to an opportunity to improve our Savory offerings month and we're moving quickly to execute against it.
In core offerings like our bacon breakfast sandwich, for example, we're working to enhance the taste texture and overall quality of our bacon, which has the headline ingredient must be upstanding similarly. We're moving to significantly improve the bread carriers for our breakfast sandwiches, which are testing has indicated represents a key opportunity to make our Savory breakfast food more satisfying and craveable.
II
Pillar of our plan is innovating for growth in our core categories as I mentioned earlier. It's clear to us that our recent approach to innovation has lacked the focus necessary to resonate with guests.
In 2019. We launched nearly sixty ltos. Three times are Level from 2017 which added complexity to our restaurants cluttered our menu and diluted our marketing Communications some new products over the last two years strayed too far from our core categories that we've always been famous for going forward new launches will be more targeted and we'll build on our core categories off.
Our recently launched Kreme Doughnuts line is a great example of the type of innovation. You will see more of
we first tested this new line of elevated premium Donuts at our Innovation Cafe in Toronto where generated strong and sustained sales at a premium price point of $1.99.
After its success at The Innovation Cafe the line gain momentum and Market tests and from an operational perspective fit seamlessly into our Corvette good assortment. We launched three dream Donuts flavors nationally found so far results have been encouraging and you will continue to see us drive Innovation for growth from our other core categories. For example, alongside our work on brewed coffee. We have an opportunity to enhance our cold beverage category through its to our iced coffee offering in recent years iced coffee has emerged as an increasingly important core growth category. And we believe we're well-positioned to build on top of our already meaningful base wage helps a new method the results in a much more flavorful Brew, which will be rolled out and coming months. We will support the roll-out with a marketing campaign that showcases our leadership and quality and believe this platform will be important source of incremental growth.
The third pillar of like twenty-twenty plan is to continue our investments to modernize the brand we've spoken recently about our growing digital capabilities at RBI, which Josh will discuss later at Tim's. We're moving this month.
Great technology into our most important touch points with guests consider the drive through in the past five years growth in the Drive-Thru has outpaced growth at the front counter. And today we generate more than half of our total sales and Kathy from drive-thru. We believe we're uniquely. Well positioned to capitalize on growth in this channel given our network of over 2,600 drive-thru locations across Canada further. Our research has identified speed and reliability of the drive through as being especially important to our convenience oriented guests, despite the increasing importance of the drive-thru. However, our drive-thru experience hasn't seen a meaningful update in decades a 2020 we're moving forward with an important initiative to modernize our drive-thru experience by deploying outdoor digital menu boards to the majority of our drive-thru locations are current paper-based menu boards cost millions of dollars each year two thousand and update and they require manual changes by team members multiple times per day.
Switching to digital menu boards and the drive-thru will free up time for team members to focus on serving guests while ensuring that the proper information is always on display. These outdoor digital menu boards will also allow us to Taylor offering a spending on location time of day weather and more will be able to offer complimentary products and combos two guests based on the items. They've selected and at a future stage We Believe personalized offers will put up another important way of growth. We've already installed outdoor digital menu boards and several hundred stores and consistent with prior funding structures. The Tim Hortons Canada add fund will invest over a hundred million Canadians to complete the installation across most drive-thru locations over the next twelve to eighteen months where we've installed the outdoor digital menu boards already. We've started to see some benefits to sales even before considering the potential benefits of future tailored offerings.
We've also seen the positive impact to speed of service and we know throughput is very important for sales given the heavy ticket volumes of our business on top of this investment to update our drive-thru experience.
We'll also continue to invest alongside our owners to modernize our restaurant Network through images in recent years. We've contributed to several hundred Renovations per year at locations where we own or subleased the real estate office. We expect to continue investing at a similarly healthy Pace in twenty-twenty. We've shared in the past or belief that cultivating digital relationships with guests will be a critical differentiator going forward and all my initial comments on shifting into the second phase of our Tim's reward loyalty program will sit at the center of our strategy to advance into this new age of digital engagement and personalized interaction with our guests across Canada.
Following the rollout of our new tent Rewards program will also be updating our iconic Roll Up the Rim program when it returns in the coming weeks. This year's program will tie into our focus on digital and will be another valuable tool to help drive digital adoption and guest registration in the Tim's Rewards program will be announcing more details around the program soon in Canada. Tim Hortons continues to have one of the strongest Market positions in all of us are pagli and some of the industry's best unit economics, but we cannot be complacent. We have not performed to expectations and have not properly put the strength of the Tim Hortons brand to work with our recent results. We have a clear plan and believe it's within our control to restore Tim Hortons to growth in Canada to do so, we will embody the brands founding values and execute on each of our principals around elevating core quality innovating for growth and modernizing the brand over the past two weeks. I've traveled to Seven Cities across Canada with the entire Tim Hortons leadership team. We've met with more than a thousand restaurant owners and wage.
Participated in more than 12 hours of collaborative and engaged open format dialogue and Q&A in each session. We've talked at length about their profitability our priorities for 20 28 and our mutual.
It meant to providing guests with a great experience every time they visit Tim Hortons. I also shared my commitment to work closely with our team and community of owners in Canada as we execute against our plan. I'm glad that came out of these Town Hall meetings. We all shared a sense of urgency and have rallied behind the plan to refocus on what made tens famous. I'd like to turn now to Burger King where a global business generated strong results in 2019. But before I do I wanted to quickly comment on the unfolding situation in China, our immediate focus is the health and well-being of our partners in guests and cooperating with local and government officials working to contain the coronavirus for reference in 2019 Burger King China accounted for approximately 2% of our Consolidated system-wide sales while it's too early to say how long the impact on our business there will lag ra monitoring the situation very closely now back to our results at Burger King in 2019 system-wide sales grew over 9% to nearly $23 including comparable sales growth of birth.
3% and net restaurant growth of just under 6% our results for the full year included another very strong contribution from our international business where system-wide sales expanded over 15% off increasing over 1 billion dollars a year over year within that figure International unit growth reached almost 10% and propelled Global unit growth to over a thousand net new restaurants for the third consecutive year off in addition International comfortable sales continue to grow at a strong pace of nearly 5% This growth was broad-based but system-wide sales growth was especially strong in markets like France Spain China Brazil and Mexico as we outlined during our investor day, we believe we have a great deal runway for Burger King around the globe, especially internationally.
in fact
We've seen that as our presence grows in different regions are brand awareness and convenience increase as well powering this virtuous growth cycle.
With system-wide sales of nearly thirteen billion dollars up from 8 billion dollars five years ago our international business now represents a majority of Burger King Global sales and with double-digit growth in each of the last three years across regions. We expect Burger King's International operations will continue to be a powerful engine of growth going forward in the fourth quarter specifically International system-wide sales at Burger King expanded almost 15% with strong growth across several markets in Asia fueled by comparable sales growth increased penetration and digital channels and substantial unit growth in Europe are Partners in Spain and France also offer double digit system-wide sales growth driven by healthy net unit additions and comparable sales performance. I highlight these large and fast-growing markets, but again our growth for the full year and in the fourth quarter was broad-based across regions.
In the US we continue to see healthy.
Momentum in our core offerings and strong performance from The Impossible Whopper doing 2019 are comparable sales increased 1.7% for the full year and we saw solid growth across our menu digital same also continue to increase at a healthy Pace. We now have over 42 stores in the US with delivery integrated directly into the POS and of these the majority offer delivery via multiple aggregators off.
As I mentioned the impossible Whopper was a big highlight of 2019 and continue to be an important sales driver in queue for generating healthy levels of incrementality at a premium price point given the same performance of The Impossible Whopper, we're confident that plant-based food represents a new platform for the brand and one that we can build into new occasions day Parts products and proteins. We know that the premium price point has not had some guests from trying the impossible Whopper. So in January, we added the impossible Whopper toward Core 2 4 6 promotion the product clearly resonates with our guests and we plan to invest behind our leadership in the fast-growing place a segment while we did see a deceleration incomparable sales growth in the US from the third into the fourth quarter our Core Business continues to perform. Well and absolute sales levels remain very healthy.
In the fourth quarter, we didn't run as many.
Twice oriented promotions as compared to last year like dollar nuggets and consequently softer year-over-year growth.
And the first quarter of 2020 were running several compelling offers including our five for four deal and r246 deal with the impossible Whopper that we believe will bolster our value layer.
Turning to development or globalnet unit growth for Burger King was approximately 6% which was driven primarily by our International operations where we grew by nearly 10% and expanded our system by more than a thousand restaurants in nearly 11,500 2020. We will continue working closely with our great network of Partners in markets like Spain Russia, Korea Brazil China and India to build our Pipeline and open new restaurants. It's worth noting that our net restaurant growth of 1042 stores for the year. Also reflected the impact of our us closures program. We discussed at investor day which included about 2 a.m. And closes in 2019 with a similar number expected in 2020.
You may recall that.
We're targeting underperforming restaurants with average sales of about $850,000 foreclosure and replacing them with brand new Burger King Of Tomorrow restaurants, which have averaged over 1.4 million in sales while it's off an uplifting sales. The program is also an important part of the evolution towards Burger King's new image on that front in 2019. We delivered more than eight hundred restaurants in the Burger King Of Tomorrow image slightly ahead Target we shared at investor day.
In short 2019 was another strong year for Burger King distinguished by the continued performance of our large and rapidly growing international business along with strong core sales and the launch of a brand new product platform at home us which has brought many new guests with attractive demographics into our restaurants across the country. Now, let's turn to Popeye's we're in our view 2019 was a pivotal year for the brand globally system-wide Sales Group over 18% for the full year and a remarkable 42% in the fourth quarter as you might expect a good deal of this growth was driven by the launch of a chicken sandwich wage surely ranks among the greatest product launches in the history of us are in the US comparable sales grew 13% in 2019, and nearly 38% in the fourth quarter. Largely Heaven by the relaunch of our chicken sandwich on November 3rd, as we shared in the past. The chicken sandwich has been a great way to introduce many new guests to the brand and our research shows that Popeyes often shoots the dog.
On the list in preference once a guest has tried our products.
While we're very encouraged that the chicken sandwich was an important driver of sales in the fourth quarter. Our other core offerings also performed very well and the vast majority of our guests purchasing the sandwich. We saw that they actually spent money on other products that are the same which itself resulting in very healthy check levels and Incredibly valuable awareness and trial.
Also driving awareness and trial was the amazing reaction to the relaunch on social media during the relaunch. We trended number one on Twitter and became the top search on Google. We also had billions of media Impressions generated earned media worth considerably more than the size of our entire annual us add funds spend on development are healthy unit growth of nearly 7% at Popeye's does not reflect the potential embedded in a economics of Popeye stores in the US following the brand step change in 2019. Nor does it reflect the impact of a recently announced major International agreements in key Asian markets in the US we've seen a significant increase in interest for new Popeyes restaurants following the brands remarkable success in 2019.
as I noted earlier
Recent sales across categories help drive a material Improvement in franchisee profitability and we believe the brands highly attractive unit economics will support a long runway for growth across the u.s. You may recall pipeline for new restaurants follows a longer twelve to eighteen months cycle. So we expect development remix. We put in place last year to begin delivering units this year and next.
In the coming years, we see a huge opportunity for Popeyes to grow from a brand with cult status into a true mainstream player in the US all while maintaining its unique Louisiana Heritage on a national side. We made good progress in 2019 ramping up the Popeyes brand in Southeast Asia particularly in Vietnam, and the Philippines the strong sales performance. We've seen so far tells us that the brand rep in the region.
We also signed a key agreement to bring Popeyes to China this past year with our existing partners for Burger King in the country and spent a great deal of time preparing for the launch which we expect in the coming months.
With a Target to build 1500 restaurants in the next ten years. We believe Popeyes China has massive potential. Our partners have nearly achieved this marked at Burger King in China in just the past eight years and last year's open over 300 Burger Kings in the country. We're confident they are the right Partners to establish Popeyes as a serious player in the world's largest chicken Market in conclusion our results in 2019 were solid Consolidated basis and consistent with a growth algorithm. We presented at our investor day, even with one of our Brands underperforming Tim's remains our key point of focus in 2020, and we're committed to build stronger results. It's been an exciting first year at the helm for me full of learning but also with many accomplishments that we will build on moving forward as a team. We're excited about the outlook for three iconic Brands and our cars that we have all the resources and capabilities needed to realize their potential for growth all around the world.
With that I'll hand it over.
Josh to provide some more color on our technology initiatives
Thanks, Jose and good morning everyone. We haven't had a dedicated section on technology in the past. But we think it's appropriate to share some thoughts with you today given what an important priority technology represents for us off the significant progress. We've achieved we started about two years ago on a New Journey to make technology a core competency at RBI digital adoption in the restaurant space is very advanced in Asia. I'm accelerating now in the US and other parts of the world. It is our view that in order to be successful as our industry evolves. We must offer industry-leading digital experiences integrated with our physical restaurants and technology in order to win with guests going forward today. I'll share a brief update on what we've accomplished so far and where we are going in 2020.
Over these past two years. We have made significant progress to catch up with key competitors in core technology offerings and I'll break down our efforts into four key initiatives.
First we have built a strong team led by our CIO Frank liberio who has over twenty years experience overseeing some of the largest global restaurant technology networks and who joined our team 1019 as well as Teddie Cheryl our CTO who joined in late 2018 after building an educational technology firm, he co-founded and who currently leads software development of our guests facing platform together with Frank and Teddy we have recruited from leading tech companies to build out Miami and toronto-based teams in engineering product and design as well as digital teams within the brand to drive or experience in new digital sales channels.
second we
Have made and continue to make investments in core infrastructure improvements to enable the future of digital ordering and e-commerce the consolidation of the Popeyes POS system from about forty system's down to TJ was a great example of this initiative without which delivery and online ordering would have been impossible. We also launched a new and more modern front-end codebase that replaced many of our mobile apps and websites allowing us to move faster going forward and have end-to-end control over our digital interface with guests particularly in our home markets.
Finally, we integrated delivery into our POS systems across Brands, which has greatly improved in-store order fulfillment and helps accelerate growth.
Many more of these projects related to POS modernization Network upgrades and system's reliability are ongoing third. We enabled digital delivery for guests across all three of our break today. There are more than 4,200 Burger King restaurants offering delivery in the US and over 9,000 globally representing a run rate business of over 1 billion dollars on an annualized basis Popeyes has also ramped up delivery significantly in the US to over 1,600 restaurants and drove it strong increase in sales this year. Especially following are highly successful promotion today delivery of Popeyes in the US represents about a 250 million dollar business on an annualized basis.
fourth we have used the
Every our mobile apps new websites loyalty programs kiosks and other channels to drive digital engagement and digital sales at the end of 2019 digital sales at BK and Popeyes. We're in the high single digits as a percentage of system-wide sales in the US and at Tim's they represent more than 10% of sales and Canada.
Looking ahead to 2020. There are four core priorities that our teams will be focused on all of which are centered on guest experienced. The first is driving amazing end-to-end guest experience and our proprietor of digital channels. We now have mobile apps web ordering and white label delivery services with these white label delivery services now allowing our guests to order food directly through our app with delivery element from one of our aggregator Partners. We've made many other digital experiences available to our guests as well. And we are quickly bringing focus on refining both the software experience and integration with our restaurants so that we are confident that we are able to deliver a reliable and pleasant experience every time the second Initiative for 2020 is to revolutionize the drive-thru experience at Burger King and Tim Hortons truck roll out of outdoor digital menu boards on an expedited basis this year. We plan to complete the rollout to approximately half of Burger King locations in the US and the majority of the Tim Hortons dead.
in Canada our teams
Are already running tests with Dynamic content to offer guests more location or situationally appropriate menu suggestions as well as personalized offers.
We expect to deploy this layer of Technology as we complete the hardware rollout. Third. We plan to deploy an intelligence platform behind each of our digital guest experiences allows us to capitalize on the system. We've built over the past two years. We now have the backbone of customized and algorithm based offers and in 2020, we expect to rollout personalized one-to-one marketing across all brands and touch points as Jose mentioned. This is especially relevant for Tim Hortons. As we transition to the second phase of the Thames Rewards program in the coming weeks all of these initiatives ladder up to our big priority, which is to drive the penetration of digital sales across each of Our Brands. It's our view that future success in our space will be increasingly dependent on digital capabilities and platform. So it's critical to establish Our Brands as leaders in their segments particularly with younger guests as we navigate the digital transformation of qsr are
This list is just a subset of many projects that we're making progress on but I think it provides useful context around what we are working hard to achieve and Technology. I look forward to share.
And more developments in the future and I'd now like to turn the call over to Matt. Thanks Josh, as you may recall during our investor day. We set up a simple historical growth algorithm that laid out the key components of how our business grows in the algorithm. We shared our historical template of two to 3% Consolidated comparable sales growth combined with approximately 5% Global unit growth has historically produced system-wide sales grew up about 7% and after normalizing for the impact of Acquisitions, this sales growth has translated into mid to high single-digit organic ebitda growth.
This year even despite seeing some softness in our sales at Tim Hortons. We were able to deliver results very much in line with this framework in 2019 are system-wide sales growth of 8.5% led to Consolidated adjusted ebitda of 2304000000 dollars up 6.5% organically year-over-year and in the fourth quarter Consolidated adjusted ebitda Crown Point eight percent on an organic basis representing our highest growth rate in eight quarters dating back to 2017 primarily attributable to healthy year of your sales growth at Burger King and Popeyes.
in our view
It's both the underlying strength and consistency of our business model as well as the added benefit from diversification that we get from having a multi-brand model with significant operations in all regions around the world.
At the segment level Tim Hortons 2019 adjusted ebitda was 1122000000 dollars which represents a 1.5% organic increase year-over-year this growth wage primarily by an increase in supply chain sales the biggest drivers of which were shifts in product mix growth in our retail business and growth and equipment sales. In addition are even also reflected lower segment G&A expenses year-over-year.
In the fourth quarter Tim Hortons adjusted ebitda was $297 representing a decrease of 0.2% year-over-year. This variation was driven primarily by a decrease in comparable sales, which was partially offset by the same factor as I just mentioned for the full year.
At Burger King 2019 adjusted ebitda was $994 which represents a double digit organic increase of over 10% year-over-year. This increase was driven primarily by strong system-wide sales growth of over nine percent with continued momentum in globalnet restaurant growth of nearly 6% including almost 10% internationally in global comparable sales growth of 3.5% in the fourth quarter Burger King adjusted ebitda with $266 representing an increase of over 9% year-over-year. This increase was driven primarily by global system-wide sales growth of 8.4% including comparable sales growth of nearly 3% and net restaurant growth of nearly 6% Finally at Popeye's 2019 adjusted ebitda was 188 million dollars which represents an organic increase of over 20% year-over-year.
This increase was driven primary.
Levi strong system-wide sales growth of over 18% among the brand strongest growth rates in the past few decades. The system-wide sales growth included net restaurant growth of nearly 7% and Global comparable sales growth of over 12% in the fourth quarter Popeyes adjusted ebitda was $59 representing an organic increase of nearly 63% year-over-year. This increase was driven primarily by global system-wide sales growth of over 42% including comparable sales growth of nearly 35% and net restaurant group of almost 7%
Our full-year adjusted net income was approximately 1.27 dollars which compares to Prior results of one point four billion dollars.
This year-over-year increase of 3% was driven primarily by adjusted ebitda growth in an additional benefit from the reduction to interest expense from our refinancing transactions, which was partially offset wage increase in stock based compensation in a sizable impact from unfavorable FX movements in addition our adjusted effective tax rate with slightly higher year-over-year at nearly 20% off. I came in a bit better than the low 20% range. We shared at the beginning of last year which we believe Remains the appropriate expectation for 2020. Our full-year adjusted diluted EPS was $2.72 compared to $2.63 in the prior-year representing growth of 4% just increase includes a significant headwind from unfavorable foreign exchange rate movements, which reduce adjusted EPS growth rate by approximately three percentage points.
Now let's discuss.
Star cast generation and capital allocation for the year. We generated over 1.4 billion dollars of free cash flow in 2019 calculated is the sum of cash flows from operating activities less payments for property and equipment.
In 2019. We also paid a total of over $900 in, dividends and partnership exchangeable unit distributions. In addition to this. We continue to make progress on key in vain projects including the expansion of our Tim Hortons supply chain Network in Canada as well as our previously announced remodel programs at both two morons and Burger Kings in 2020. We will continue to invest in support of these initiatives which we believe reinforce the long-term health and growth potential of our business.
After making considerable progress on the build-out of our Canadian distribution centres last year, we expect to finish the project in the second half of this year.
Once the project is complete our distribution coverage will increase from about 75% to nearly 90% of total delivered cases, which we believe will help us meaningfully improve service levels two owners owned by reducing complexity through few deliveries per week and improving delivery times in terms of restaurant reimaging we expect to maintain a similar path of investment as 2019 month in which we contributed to several hundred Burger King of tomorrow and Tim Hortons welcome Renovations. As soon as I mentioned earlier over the next twelve to eighteen months. Our owners will also invest over 100 million Canadian dollars to revolutionize the drive-thru experience through the deployment of outdoor digital menu board technology at Tim Hortons drive-thru locations across Canada.
This investment will be funded by.
At Tim Hortons Canada advertising fund similar to how are indoor digital menu board initiative was funded several years ago. Now turning to the capital structure as of December 31st, 2019 off. Our total debt outstanding was twelve point three billion dollars our net debt calculated as total debt less cash and cash equivalents of one point five billion dollars was ten point eight billion dollars off and our net debt to adjusted ebitda leverage ratio decreased further to 4.7 times.
In October, we took advantage of favorable market conditions to execute our second refinancing of the Year through which we reduce the size of our $6 Term Loan be to 5.4 billion extended or maturity by over two years to 2026 and reduced our interest rate from Libor plus two hundred twenty five basis points to Libor plus 175 basis points on a refunding the transaction by issuing 750 million dollars of secondly notes due 2028, which priced tightly behind our recent first-lien Bond issuance at an interest rate, a 4.375%
additionally
We were able to extend our floating to fixed interest rate Hedges locking in favorable rates through 2026.
Through these transactions, we generated significant interest savings extended our maturities and further improved our flexibility going forward all together these fourth-quarter transactions off spected to generate approximately $25 million dollars of run rate interest savings and when combined with our third quarter refinancing initiatives add up to approximately fifty million dollars of estimated run-rate benefit from some of which we started to see flow through our results in the fourth quarter.
In addition, we were also pleased to receive upgrades on our corporate credit rating from both S&P and Moody's to bb&b a 3 on account of continued improvement in our business leverage profile and free cash flow generation 2019 also represented the continuation of a strong multi-year period of capital allocation and ongoing reduction of Leverage driven by our highly doubt fishing growth model over the past five years. We've generated almost nine billion dollars in total unlevered free cash flow allowing for a considerable reduction in our net leverage from 7.5 * 24.7 times adjusted ebitda. Along with continued and meaningful reinvestment in key business initiatives such as remodels alongside our restaurant owners and the page out of our digital capabilities.
we've also
Unable to deploy our cash flow to return over $3 in cash, and dividends invest over 1 billion dollars in cash for share repurchases and acquire another iconic brand in Popeyes for one point eight billion dollars in cash as we shared in the past. We will maintain a balanced approach to Capital allocation allocating excess Capital where we believe that will create the most incremental long-term hold their value currently our capital structure of Ford's a significant financial flexibility and optionality to drive meaningful long-term shareholder value creation this morning. We also announced RBI board of directors declared a dividend of $0.52 per common share and partnership exchangeable unit of RBI LTE payable on April 3rd, 2020 and a target of $2.08 in total dividends to be declared in 2020.
This announcement represents a 4% year-on-year increase in declared cash dividends in our eighth consecutive annual dividend increase.
Since we first paid a dividend 2012, our quarterly dividend has increased by Thirteen times. Its original level reflecting our commitment to maintaining a balanced approach to Capital allocation as we've said, thank you everyone for joining us on the call this morning and for the continued support and now like to open the call for questions operator. Thank you. We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the keys to withdraw your question, please press star then we please ask that you limit yourself to one question.
The first question today comes from Dennis Geiger with UBS, please go ahead morning. Thank you Jose. Thanks for all the the insights and the Tim Hortons. Just wondering if you could talk a bit more about the changes made to the to the Loyalty programme specifically, maybe if you could highlight, you know different customer behaviors the that you met that you may be able to affect the financial impact from the adjustments off, you know, focus on App download and utilization is clear, but maybe just anything that that you look for from the tiered loyalty system benefits there or across day Parts whether the the recent drag that you've seen from the program changes and anything else on on your research and and and testing of the program. Thank you.
Hey, Dennis. Thanks for the question. I'm going to have Josh walk you through.
Of those details. Yeah, it's good morning and and things a lot. So we've done with a lot of work thinking about where we where we take the Loyalty program next month and we're very excited about the the changes that are coming up here just in a few weeks actually and I think if you if you go back we were really pleased with with the initial adoption loyalty program as we've talked about Thursday lunch. We saw a huge reaction from from Marcus. I think they were really pleased with the rewards that we were able to bring to them. And and now I think we're ready to take our our next steps with with loyalty in in the New Year here. We did a lot of research together with both of our guests and with some of of the best experts across the oil industry and spend a lot of time looking at some of our peers both here in Canada at the end wage in other geographies in the US to Think Through where we just take the program next really with a big focus on our guests and how how we take the business for in the best win in the long run. I think some of the exciting things off.
Some of the key features about where we're going to take loyalty are one. We're going to be able to open up the menu and bring bring rewards across a number of additional menu items. That was one of the big pieces of feedback heard is that we have many
Guess who want to be able to be rewarded across many other categories in our menu, and one of the great features of the new program is that will be able to offer rewards in terms of food items and in terms of donuts in terms of ice cap, so we're really be able to broaden their wards that we can we can give I'd say the other really big feature that we're going to that we're going to enable with with the new version of rewards is that it took to become a much more digital program. So we're going to strongly encourage our our guests to register with the program and we're going to provide a lot of encouragement to guess to interact with us on on the mobile app. And I think that's going to allow us to better understand how our guests interact with with our brand and use our brand and I think also allow us to provide even better benefits as we understand how our guests International brand and provide more personalised benefits to those guests. So I think those are some of the most exciting things for us in terms of what we're going to change if you think about the underlying birth
Mechanics of it and not allowing rewards. It's not really going to change very much. We're going to keep the underlying benefits to to our guests pretty similar.
Um for for the most part, it's really evolving to allow more options to the guests and to make the program more digital and I think it is you think about it as we go kind of further into this year, especially with the back half. Uh, that's where we see a big opportunity for the program if we can make the the program a lot better for our guests open up more of the menu and be able to bring more personalized offers to our game over over time. That's where we see the big opportunity to really bring a big business benefit from the from Tim's rewards probably later into this year and and as we go on our future years
The next question comes from Nicole Miller with Piper Sandler, please. Go ahead. Good morning. And thanks for the update. I want to ask about Tim Hortons and a couple of things. First. How is Canada overall? As a region? How's the Pure Performance there? Even if you know, it's it's better the same or Worse context would be helpful second. I want to simplify the dollars back into the plan. So the $100 or excuse me, a hundred million of the add funds does that reduce other aspects of advertising? I just want to understand that or other financial needs to support the plan and then just third and I'm sorry. It's a little harsh. So I apologize but I was trying to compare and contrast these comments back to the analysts day and and you know, there was commentary at the end of the prepared remarks today about things generally being the same from that plan. But if that's the case, I mean why now on 10th this is going to work. I'm assuming there's going to be some elements that are being reprioritize.
then just essentially
Saying what do you want us to expect? It's okay, you know if you're going to buy through loyalty this way to get the data, but then we should be understanding that maybe this quarter is about family in terms of seems to our sales. Thank you very much.
Hey Nicole. Thanks for the question. I think I'll start with with kind of the third and fourth questions around around the Tim's the third and fourth sub-questions on Tim's plan of what we shared in in May and as I mentioned I've spent probably sixty seventy percent of my time in Canada since since October working closely with with axle on the team to to address some of the gaps that we have in in the plan. And and in the team we've we've hired a lot a number of strong leaders Canadians with expertise in in key areas of business including marketing loyalty and rewards real estate and development restaurant technology as well as a Communications and a few other areas. We've also over the last 60 days conducted the biggest consumer research study that that that Tim's is done in nearly two decades which has helped us understand better how Canadians are deciding where to spend their money or where to go where they go when they want wage.
All of your specialty coffee or where they where they go.
When they want to breakfast sandwich versus a a sweet baked good and what's important about this? And and when we're this is creating an important pivot for us from a from a strategic standpoint wage is is that the research confirmed first and foremost Canadians absolutely loved him Hortons and and additionally it's helped us sharpen the lens and and focus on a plan with the heavy heavy emphasis on the core being great at the things that that made Tim's be incredible branded is today. I think it's a bit different or quite different from where we were a few months ago. I think I mentioned in my prepared remarks that that the brand and and the business in Canada has has spent quite a bit of energy on on limited-time offers. We've introduced a more than 60 limited-time offers in in the in the year 2019, which is nearly 3x what we've done in the past. I'm not sure what the right number of of el Tio's is but we know God
with certainty that that what we need to be doing is focusing on the fundamentals at
That created this this amazing brand and business in in Canada. And what I touched on in my prepared remarks is what we're focused on today and and we'll be focused on going forward elevating for Quality innovating for growth and and modernizing the brand. So for us this this pivot as an important one as a leadership team and it's important one that we've shared and along with our owners across Canada. I spent along with the team. I spent the last two weeks visiting Seven Cities and talking to more than a thousand owners about the plans about the direction of the business and about our focus on on what made Tim Hortons famous in Canada, and there's a lot of excitement a lot of work to do for sure. But but we feel confident that if we put all of our energy resources behind this plan, we're going to we're going to get the business in this great brand back on track from a growth standpoint. I think you touched on you asked about that Canadian.
Pure Performance, we we don't comment on on on others in in
These or any other discussions but but obviously the the market we feel very good about the market and the long-term prospects of of growth in Canada. And we continue to to focus all of our office is on on driving growth here for the long term as it relates to Capital and kind of the the uses of add fun to to help Drive the the initiatives and drive-thru. I don't have that answer that question. Yeah and Nikolas Matt here in terms of the capital investment. I think you know, as soon as I mentioned we think this is important part of the overall plan at Tim's to drive home for the long term and the right place to invest our resources. And so with the 100 million Canadian dollar investment that will be made over time over the next five to six years. And as a result of that I think we'll also see some pretty significant savings within the ad fund saving millions of dollars per year on menu printing wage.
Delivery so overall we we don't really expect.
A material impact on add funds spending and just to come back to your final question on on performance. We as you know, we don't provide guidance, but that said we met you know, there's been no material change initiatives or performance q1 to date versus Q4, the things we've talked about our structural changes and Investments. We're making around coffee breakfast in a row drive thru outdoor digital menu boards coffee communication all the time and these initiatives are aimed at providing layers of of sales growth over time throughout the years and Beyond and we're confident that these will have an impact on on the top line in the coming the coming years. Thank you so much.
Next question comes from Jeffrey Bernstein with Barclays, please go ahead great. Thank you very much another question on on Tim's Jose. I'm just whether you could talk about, you know franchise relations. It sounds like you've met with like you said a thousand plus owners in recent weeks. So I'm just wondering how you describe that today and whether or not the recent comp head winds wage and like you said the profitability down this year has kind of overrode the prior successful efforts. It seemed like in improving relations with franchisees and on the base of that. Just can you provide us with is in terms of the percentage of the system that like you said invest to modernize but where the system is in terms of remodeling the entire units and whether the franchisees in your discussions, or are Keen to invest on that page or you know, whether they be a little bit more hesitant to do so ahead of their required remodel cycle. Thank you.
Great. Thanks Jeff. Yeah, despite our our recent performance relationships with our owners continue to improve.
And we're communicating with them more than ever. And as I mentioned just last week. I finished traveling the country. I was in Vancouver Calgary to Toronto London Ottawa Montreal and and I went all the way to to Halifax and we shared our plan with with over a thousand owners at these Town Hall meetings that we hosted are Tim's owners. They're they're super passionate about their amazing temp Brandenburg, not surprisingly they have and as they should they have high expectations of us as leaders of the Thames brand and business and that's what I love about our owners. They Community engagement off simplification and fewer more impactful new products sharper brand Communications, and of course restaurant profitability, these are top-of-mind and our priorities for our owners in Canada. I'll tell you they they voiced support for the plan to refocus our efforts on the core and to reconnect hymns with its roots with what made Tim's famous and they also share our sense of urgency and and we look forward to wage.
Closely with them throughout the year as we Implement our plan in 2020. We have confidence that if we as I said earlier in response to Nicole's question, if we
Focused on these core elements of the business the basics the things that made Tim Hortons famous and made it the brand it is today and we're confident that that our owners are going to be successful and our guests are going to be happy to continue to grow this great grand in in Canada as it relates to to Renovations or remodels in in Canada. We we made some progress with with the evolution of our welcome image. We had a we were in 2018 twenty nine versions of it. And now we've evolved to a 2020 image welcome image package which takes forward some of the ideas offered innovations that we saw at the Innovation Cafe. It has it's got a sharper image and and really a modern look and feel we've opened the first one in in the west coast of Canada and we've seen some some good results and and some encouraging feedback from our owners. We we feel good about the the the potential of this image package and and there's dead.
Engagement and support from the owners around continued investment remodeled. So we we don't expect any any shifts or changes in in the progress. We're making on renovating the the fleet office much. The next question comes from from Patricia Baker with Scotiabank, please go ahead and thank you very much. Good morning. Everyone not surprisingly may also going to ask a question on Tim's and you may have partially answered it, but I'm still going to ask it I really appreciate the all the color you provided on what your plan is for 2020 try and close the gap, you know on tips current performance. And where do you think it will go to in 2018 you launch the winning together plan. I'm just curious, you know looking back. It would be obvious. I think that we're Tim's is performing now is not worth a thought. It would be when you launch the Winnie together plan. So, can you talk about the winning together plan? What worked what didn't work and when you kind of Take a Look Backwards, you know, should you should yep?
included more
That that focused on the core when you did the Winnie together plan.
Thanks for Tricia. Yeah, I think I touched on on our strategy and our game plan going forward and some of the reflections after a few months of assessment of our current performance in our in our history over the last several years. I think I've touched on on the things that we kind of identified as opportunities and and how we're going to move forward. I think the the key for us is that we're we're a famous incredibly well penetrated Brandon in Canada people love this brand. They love the experiences. They have there and and and considerate a second home many cases. And and I think what we didn't do well in the past in the recent past is that we spent too much time trying to to to create initiatives on the fringes that wage not initiatives, um, or limited-time offers or innovations that that supported the core of our business around coffee the kind of expanding definition of what coffee is dead.
around breakfast in a
And baked goods and so, you know, we we feel that the initiatives and the planet we have around elevating our core focusing on innovating for growth in our core and modernizing and brand with our loyalty 2.0 as well as enhancing the the drive-thru experience, which is a big and growing part of our business, which really hasn't been touched in in decades. We think the the initiatives that we have in in in in in our sights and that we're focused on and and, you know, removing everything else from the periphery is going to allow us to to drive growth in this great grand for for years to come. Thank you.
The next question comes from David Palmer with evercore is I please go ahead. Thanks, good morning, and thanks for for that commentary on Tim's question on that brand as long as you reposition the Loyalty program. How confident are you in the testing of that phase two loyalty? And how are you doing that differently than the previous version and relatedly, I would assume that the Loyalty shift will help franchisees or gain some loss margin from phase one, but is it also fair to say there'll be some sales sacrifices initially as you push consumers to mobile relationships. Just some of these consumers will be less Keen to make the leap to the phone and then lastly as you think about that three point drag from Phase One Rewards. Do you think that could become a Tailwind off by the second half the year maybe making positive comps more likely in that second half. Thank you.
Hey Dave, it's it's Josh. Thanks for
For the questions, so as we noted a little bit earlier, we think that that loyalty is contributing right now about negative 3% to to our Ross and as we think about about what's going to happen with the next phase of loyalty the the goal is really about driving the about two things. As I said earlier right wage is being able to open up the menu and and give more options and the other thing is is about moving more into a a digital form of of a program. So we have done a lot of research. I mentioned earlier we've done research both with our guests and worked a lot with with experts in the industry. So we think we've done kind of as as much research as long as we can do is trying to make sure that we have the right form of of the program going forward that our guests are going to respond well to and that we have a pretty good understanding of how our guests are likely to wage.
Gone to the the program.
Either that there's always uncertainty with with these programs about how exactly they'll they'll respond. You know, I'd say we don't we don't expect to see a material change as I mentioned earlier in terms of the the or overall investment in rewards as as we move forward into the next phase of of the program not the intent and and that's not our our expectation. Um, but as you think about how the about how the the impact of the program is is likely to evolve As you move through through the rest of the year off obviously in in q1 of the year, you know, nothing will have changed too much but as we move into Q2, you'll be laughing the the prior year when we had we had an existing version of the program in place, but we had a bit of a traffic benefit due to the initial excitement in in Q2 of 2019. So I said it was more sales neutral and we think that as you age
into the second half of two
2019 as we're lapping that as we got farther into the the second half of 2019. We think some of that incremental traffic has it faded away some of the excitement came off. So as we get into the second half of two thousand and twenty, we think that some of the year on your investment could it farther into the second half of twenty twenty-five become somewhat less of a headwind and we hope that some of our initiatives around personalization and trying to make the program more incremental to start to become more of a of a benefit. So hopefully that helps it to think and how we think about the program and how it could evolve as we move through as we move through 2020.
The next question comes from Sarah Senator with Bernstein, please go ahead. Good morning. This is actually larger for Sarah. So I just had a quick one on BK. I think you mentioned that the impossible offers stay strong also that you saw strength across Court menu, but the cops are still soft as it seems like that lived from The Impossibles, you know quickly dissipated. Can you just talk about that? And then also the competitive environment in general? Thanks. Yeah. Thanks a lot. Our sales levels in Q4 Burger King in the US were we're very healthy and in line with what with what we saw in in Q3 off until you to do well in the premium segment. However, we were laughing as I mentioned in my prepared remarks that we were lapping strong traffic from the same. In 2018 driven by by Dollar nuggets King box and also $0.89 pancake promotion. We we feel really good about our our plan at Burger King in the long-term. We have a a strong core birth.
the the
Of impossible Whopper to the two four six platform gives us an opportunity to address one of the points of feedback received from from many guests, which is the price point was a little high for Thursday for the SR consumer. So having having it available in the two four six platform gives folks more access to it which is which is really exciting and and we're seeing that that's important point for consumers a long-term. We also have initiatives around breakfast. We have initiatives around value long-term. So we feel good about the business plan for 4 B Que in and look forward to keeping you posted on progress in in the coming quarters.
Next question comes from Brian Bittner with Oppenheimer, please go ahead.
Thanks. Good morning for Popeyes. I think this is the first time ever that Popeyes is opened over a hundred units in a single quarter and you talk to your prepared remarks off that you know, the backlog is really going to start unlocking maybe this year next year in the year after you know, how do you want to thinking about Popeyes unit growth in 2020? And what portion of the openings is going to come from the US versus the international over the next couple of years.
Hey.
Thanks, Ryan. We we don't break out on a go-forward basis where where the developments going to come from. But obviously the the performance in the US of of the Popeye's business office as we shared for for Q4 for the full year has created a lot of excitement with our existing franchise Partners here in the US as well as with new prospective investors are very interested in being part of this the system which is quickly becoming one of the more exciting franchise business models in in all of us are in the US. So we we think long-term there is a lot of room for growth for for Popeyes in the US obviously internationally. We think there's a tremendous opportunity for growth. Clearly. Asia is a is a is a place where Fried Chicken and chicken and general does quite well and we think we can be a really compelling second offer in in the in the region. We have a huge size Gap where penetration Gap versus the the wage.
A leader in in Asia and we think we have a a really compelling offer from a product standpoint to to do some some.
Important growth there in the nearest to come and but it's not just Asia and the us we think Europe is a is an exciting and growing market. We've opened in Spain we have other markets as well in in Europe that that have potential for growth Latin America is a market where Fried Chicken does quite well and and we've we've opened in Brazil and had a really dead exciting growth rate in 2019. I think it's just the beginning of of growth for the Popeyes brand. In America in Europe and Asia and especially in the US, so we're excited about the prospects and we're working hard to build our teams capabilities from a from a development standpoint and working with our partners to to ramp up the growth over time. Thank you so much.
The next question comes from Peter sklar with BMO Capital markets, please. Go ahead.
You're late this year in terms of calendar the roll up to win promotion at Tim Hortons you indicated in your commentary that you will be proceeding with it. Just wondering why you're late June and especially in the context when your principal competitors, I believe started with their dollar coffee promotion today. So the concern would be that you're going to lose some momentum this quarter cuz you are late with the program.
Hey Peter, it's it's Josh Nore and thank you for the question. So the the phasing of of Roll Up is is mostly due to to making sure that we have the right timing with respect to the next phase of Tim's rewards and then bringing in roll up after that. So we'll have news on on roll up to come I think in the the quite near future and we just want to make sure that that we give time for I guess to to have things in a a proper order and kind of understand each of each of those new pieces of of news.
Next question comes from David Tarantino with bared please. Go ahead.
Hi, good morning, Mike. My question is on Popeye's and it's just wondering if you could help us understand that very impressive performance that you had in the fourth quarter. And how much of that was was maybe trial around the relaunch of the chicken sandwich versus maybe a sustainable Improvement and and and traffic or or or accounts and I'm just asking in the nature of sort of level setting what we what we should be assuming going forward and in terms of sustainability.
Thanks, David, you know as they say a rising tide lifts all boats. Well in Q4. We saw The Tide Rises at at Popeye's quite a bit and the traffic driven by the demand of of the Popeye's chicken sandwiches help Drive growth in our entire menu in the quarter just to give you an idea about that following the launch of the of the chicken sandwich in November only about 50% of total tickets at Popeye's and Q4 contained a purchase of the of the chicken sandwich, which means a lot of the growth came from growth in other categories in in our menu, which is quite exciting and we're also encouraged by the fact that on on a significant majority of the tickets with that include a chicken sandwich guess spent more than on sandwich items than on the chicken sandwich itself, which led obviously two very healthy levels and and growth across the menu. We're super excited and and super encourage with the the levels that we saw from the the gross gross sales and levels of volume that we saw from the the chicken sandwich and Q 4 Dead.
and throughout the quarter we
Yeah, we think long-term. This is obviously a a platform that's going to give us an opportunity to engage more guests with Popeyes. We've mentioned several times in in past calls and and and other suggestions that when people try that when guests try the the Popeye's product whether it's bone-in chicken or boneless or even the sandwich that our rankings shoot up in terms of preference amongst all players in in the chicken qsrs space and the chicken sandwich launch a relaunch into for gave us an opportunity to engage more guests and and we saw the reaction was very positive. It's just the beginning. We we think this is a a great opportunity for us to continue to introduce the the brand to too many consumers in the sand and across the globe and look forward to to continue to share with you our progress on the on the brand. Thanks so much for the question and and thanks everyone overall as as mentioned. We had a strong 2019 with more than 8% system-wide sales growth wage.
custody of about 6 and 1/2
Percent while we have a lot of work to do at Tim's. We saw the benefit of of our Diversified Global business model with strong performance from DK and an amazing Q4 and 2019 from Popeyes. We're excited for 2020 and look forward to sharing the progress of each of our economy Brands over the coming quarters. Thanks again to all of you for joining us this morning and thank you again for your support have a great day off. This conference is not concluded. Thank you for attending today's presentation. You may now disconnect.