The 36-Year Old CEO That Leads Burger King Loves the Whopper and Is Inspired by Amazon
The 36-year-old chief executive officer of private equity-backed Restaurant Brands Int.’l Inc. (QSR) , Daniel Schwartz, has been somewhat of a media mystery since first crashing onto the Wall Street scene in a meaningful way in 2013.
In only his second interview with the press, Schwartz humbly told TheStreet that his personal life is relatively “boring.” That may be an understatement. Schwartz has found himself flying from Germany to France to Canada to the U.S. only weeks apart at times, as he oversees the operations of some 20,000 restaurants in more than 100 countries.
And, rest assured, Schwartz wants more. He said that all of the company’s brands, Burger King, Tim Hortons and now Popeyes Louisiana Kitchen Inc., are under-penetrated in every market and will be expanded.
Schwartz is a former partner at Brazilian private equity equity firm 3G Capital. That is the firm credited for the series of acquisitions that resulted in Anheuser-Busch InBev SA/NV (BUD) . It was also behind the 2010 purchase of Burger King Holdings Inc. – a transaction that was valued at $4 billion. That year, Schwartz, who started at 3G in 2005, was brought to Burger King as chief financial officer and two years later, 3G returned Burger King to public markets in a deal that valued the company at $8.1 billion.
When Burger King then bought Canadian doughnut and coffee eatery chain Tim Hortons in 2014 for $11 billion, the combined companies emerged as Restaurant Brands with Schwartz, then 32, at the helm. Warren Buffett’s Berkshire Hathaway Inc. (BRK.B) , now holding a 3.6% stake in Restaurant Brands, provided $3 billion of Burger King’s $12.5 billion financing commitment.
In February, Restaurant Brands tacked on another chain to its portfolio, Popeyes, which operates 2,600 locations in the U.S. and abroad. The company paid $79 per share, or $1.8 billion for the fast-food chain, known famously for its Southern fried chicken and biscuits.
Schwartz got right down to business, spending time flipping burgers at Burger King and pouring coffee behind the scenes at Tim Hortons. He told TheStreet that he still has to “do my tour of Popeyes.”
With his background at 3G, a private equity firm known for implementing deep cost cuts at companies, Schwartz did just that – reduced costs. When he first took over Burger King, he stripped down the menu and found cost savings at the home office. He then grew BK’s product pipeline, accelerated opening new stores from some 170 in 2010 to 735 per year in 2016.
Still, Schwartz said “this cost cutting is overblown,” as, yes, 3G cuts back when necessary, but the firm’s real advantage is in recruiting talent and franchisee partners. That’s what drives the growth, he said.
Schwartz said Restaurant Brands acquires brands “forever.” The company takes pride in finding strong brands for its portfolio that it can support for the long term, unlike most private equity deals in which companies are purchased, restructured and then sold in roughly two to three years on average.
Here is a condensed and edited version of the rest of TheStreet’s conversation with Schwartz.
