For budget-conscious consumers, Burger King has long been a go-to fast food chain known for its wallet-friendly prices. A Whopper sandwich, fries and drink at Burger King can cost several dollars less than a comparable meal at McDonald‘s or Wendy‘s. This raises the question: how is Burger King able to sell its food so cheaply while still turning a profit?
As it turns out, Burger King‘s ability to offer some of the lowest prices in the fast food industry is driven by a combination of factors, including its business model, supplier relationships, ingredients, operations, and marketing strategies. Let‘s take a closer look at the top 10 reasons Burger King is able to be the king of cheap fast food.
1. A Business Model Built on Value
At its core, Burger King‘s business strategy is all about delivering perceived value to customers. The chain explicitly targets deal-seeking, budget-conscious consumers and aims to attract them with low prices and a strong value proposition relative to other fast food options.
"Burger King has always had a strong focus on delivering great-tasting food at affordable prices," said Tom Curtis, President of Burger King North America, in a press release. "We know our guests are looking for restaurant experiences that won‘t break the bank, and we‘re proud to offer a wide range of crave-worthy menu items at exceptionally low prices."
Burger King‘s value-centric approach influences every aspect of the company, from the ingredients it sources to how it prepares and markets its food. By making value a priority, Burger King has been able to cement its position as the leading low-cost fast food brand.
2. Bulk Buying Power
One of the main ways Burger King keeps its prices low is by leveraging the massive scale and purchasing power of its parent company, Restaurant Brands International (RBI). RBI is one of the world‘s largest quick service restaurant companies, with over 27,000 restaurants across its brands which include Burger King, Tim Hortons, and Popeyes.
This scale allows RBI to obtain significant volume discounts when purchasing ingredients, packaging, equipment and other supplies on behalf of its restaurant brands. RBI‘s procurement team is able to negotiate favorable contracts with suppliers, distributors and manufacturers to get the lowest possible prices, which in turn allows Burger King to keep its food costs down.
For example, Burger King likely pays significantly less per pound for the ground beef used in its burgers compared to a smaller chain or independent restaurant, simply because it is purchasing beef in such large quantities through RBI. The same principle applies for other key ingredients like chicken, potatoes, cooking oil, and more.
3. Cheaper Ingredients and Processes
In addition to securing low prices through bulk purchasing, Burger King also keeps costs down by using ingredients and food preparation methods that are cheaper than many of its competitors.
For instance, while chains like McDonald‘s and Wendy‘s have shifted to using fresh, never-frozen beef patties in recent years, Burger King continues to use frozen patties that are thawed and cooked on-site. Frozen beef is less expensive than fresh, both in terms of the ingredient cost and the simplified storage and handling processes.
Burger King also tends to use lower-cost components and toppings on its burgers and sandwiches compared to other chains. A good example is Burger King‘s standard sesame seed bun, which is a relatively cheap, no-frills bun compared to the fancier brioche and potato buns some competitors use.
These cost-cutting ingredient choices add up to major savings at Burger King‘s scale, savings which are then passed along to customers in the form of lower menu prices. While Burger King‘s ingredients may not always match the quality of pricier chains, they allow Burger King to deliver good-enough food at great prices.
4. Streamlined, Efficient Operations
Burger King restaurants are designed for efficiency. The chain‘s menu is purposefully limited compared to many sit-down restaurants and even some of its fast food competitors. A smaller menu reduces ingredient costs, prep time, and ultimately overhead.
The chain also utilizes a "cook-to-order" system, where meals are only prepared after being ordered instead of being made ahead of time and held under heat lamps. While this means slightly longer wait times for customers, it cuts down on food waste and ensures hotter, fresher food.
Operationally, Burger King restaurants run a very tight ship to keep costs in check. Detailed protocols, specialized kitchen equipment, and extensive employee training allow restaurants to churn out food quickly and consistently while minimizing waste and mistakes. It‘s an approach designed to maximize output while keeping overhead as lean as possible.
5. Franchising Model
Like most major fast food chains, Burger King leverages a franchising model, in which the majority of its restaurants are owned and operated by independent franchisees rather than the company itself. Over 90% of Burger King‘s 18,000+ restaurants worldwide are franchised.
Franchising is an asset-light, high-margin business for Burger King. The company collects fees and royalties from franchisees while avoiding the capital investment and operational complexities that come with running its own restaurants.
This model allows Burger King to rapidly scale up its store footprint while maintaining a lean corporate structure with low overhead. In turn, these corporate cost savings trickle down to the store level, allowing Burger King and its franchise operators to offer some of the cheapest fast food prices out there.
6. Frequent Promotions and Deals
If you‘ve ever seen a Burger King commercial or billboard, you know that limited-time deals and promotions are a core part of the chain‘s marketing strategy. At any given time, Burger King is likely advertising multiple discounts and special offers to drive traffic to its restaurants.
Common promotions include steep discounts on popular menu items, mix-and-match deals, free food with purchase, app-exclusive coupons, and more. These offers are carefully crafted to give customers the perception that they‘re getting a great deal or taking advantage of limited-time savings.
In reality, Burger King often uses promotions to steer customers towards cheaper-to-produce items with higher profit margins. The chain also prices promotions just low enough to drive an uptick in sales that more than offsets the per-item revenue loss.
For budget-conscious fast food fans, Burger King‘s nonstop barrage of promotions reinforces its position as the value leader and cheapest option out there. Tactics like the "5 for $4" deal, $1 menu items, and free Whopper offers have been very successful in getting deal-seekers in the door.
7. Taking Advantage of Surpluses
Burger King‘s ability to offer dirt-cheap fast food also gets an occasional assist from larger economic trends and events that create temporary surpluses of key ingredients.
For instance, in recent years, the fast food industry has at times benefitted from an oversupply of cheap chicken due to strong poultry production, lower grain prices and other economic factors. Burger King and other chains were able to take advantage by offering deep discounts and promotions on chicken sandwiches, chicken nuggets and other poultry-based menu items.
Similarly, Burger King is always ready to pounce when its suppliers have excess inventory they need to offload quickly and cheaply. The chain will snap up surplus buns, burger patties, potatoes and more when the price is right and pass the savings along to customers.
8. Cutting Costs Wherever Possible
From energy efficient appliances to waste-reduction protocols to water-saving fixtures in restrooms, Burger King is always looking for ways to shave costs throughout its restaurants.
While these measures are primarily driven by a desire to boost profitability, every bit of savings eventually makes its way to customers in the form of lower prices. When your business model depends on being the cheapest option, no potential area for cost reduction is too small to overlook.
Burger King also saves money with its no-frills restaurant designs. Unlike fast casual chains that invest in lounges, fireplaces and free WiFi, Burger King knows its customers prioritize cheap prices over creature comforts. Spartan dining rooms with basic furniture and décor may not win any ambiance awards, but they keep overhead down.
9. Catering to Value-Seeking Customers
Through its menu, prices and marketing, Burger King has cultivated a strong appeal to the most budget-conscious subset of fast food customers. Value is the primary driver for Burger King customers, and the chain has built its brand around being their go-to option for cheap, quick, decent-enough burgers and fries.
Burger King isn‘t focused on competing with fast casual chains like Five Guys or Smashburger on quality, or even with McDonald‘s and Wendy‘s across every menu category. Instead, the chain goes after the deal-seekers and dollar-stretchers by offering the outright cheapest prices on burgers, sides, and combos.
This approach of catering to value-above-all customers is a key reason Burger King is able to make its food so cheap. By making affordability the core attribute of its brand, Burger King attracts the customers who care more about price than premium ingredients or fancy preparations. This allows the chain to focus on cutting costs and passing the savings along to its deal-loving customer base.
10. Sticking to its Value Roots
Finally, Burger King is able to keep its food cheap because offering strong value has been woven into the company‘s DNA for decades. While some of its competitors have moved upmarket at times with more expensive menu items and trendier offerings, Burger King has never strayed too far from its roots as a value-focused chain.
Sure, Burger King has premium and limited-time items that cost a bit more, such as the Texas Double Whopper and Impossible Whopper. But at its core, the chain has always positioned itself as the home of the cheap burger combo, and it continues to lean into that identity today.
Burger King isn‘t trying to be all things to all people. It knows its lane is value, and it stays in that lane. By remaining laser-focused on delivering the cheapest burgers and fries in the business year after year, Burger King has been able to build a strong reputation as the king of cheap fast food.
From strategic supplier relationships to a ruthless focus on cost reduction to savvy promotional tactics, Burger King pulls a lot of levers to keep its food prices as low as possible.
The chain‘s relentless commitment to value has served it well over the years, as Burger King has been able to carve out a strong niche with budget-conscious fast food customers. For folks looking to scratch their burger itch on the cheap, Burger King consistently delivers the most bang for the buck.
Of course, Burger King‘s low-cost approach has its trade-offs. The company isn‘t known as an industry leader in ingredient quality, and its cost-cutting measures can negatively impact franchisees, suppliers and workers at times. There‘s an argument to be made that Burger King‘s prices are only made possible through aggressive, bordering-on-unsustainable measures.
Still, it‘s hard to argue with the results. Burger King has built a fast food empire by democratizing access to cheap burgers, and its effective business model has kept it near the top of the fast food pecking order for decades. As consumers continue to look for value in every aspect of their lives, expect Burger King to keep its foot on the cheap food gas pedal for years to come.
