The Business Model (How They Make Money)

Restaurant Brands International Inc. (QSR) operates as a global fast-food giant, but they mostly make their money by letting other people run their restaurants. Think of it like this: QSR owns the famous brand names and the secret recipes, and then they license those rights to independent business owners, called franchisees, all around the world.

Their main brands are household names: Tim Hortons (known for coffee and baked goods), Burger King (famous for flame-grilled burgers), Popeyes Louisiana Kitchen (specializing in fried chicken), and Firehouse Subs (offering hot specialty sandwiches).

QSR's core economic engine is built on a "capital-light" franchising model, meaning they don't own most of the actual restaurants. As of December 31, 2025, over 96% of their restaurants were run by franchisees.

They generate revenue primarily through a few key streams:

• Royalties: This is their biggest money-maker. Franchisees pay QSR a percentage of their sales for the right to use the brand name and system.
• Franchise Fees: They collect upfront fees when a new restaurant opens or when a franchise agreement is renewed.
• Property Income: QSR also earns money by leasing or subleasing properties to some of its franchisees.
• Supply Chain Sales: For brands like Tim Hortons in Canada, QSR sells coffee and other goods directly to its franchisees.
• Company-Owned Restaurant Sales: While most restaurants are franchised, QSR does own and operate a small percentage of restaurants, primarily through its Restaurant Holdings segment, which includes recent acquisitions.

For the full year ended December 31, 2025, Restaurant Brands International reported total revenues of $9,434 million. In the first quarter of 2026, the company generated $2.26 billion in revenue.

The Metrics That Matter Most

For a company like Restaurant Brands International, which primarily relies on a franchised business model, here are the most important numbers to watch:

1. Revenue: This number tells you the total amount of money the company brings in from all its sources, like royalties, franchise fees, and supply chain sales. For QSR, it's a crucial indicator of how well their brands are performing globally and how much their system is growing. If revenue is consistently increasing, it suggests that more people are eating at their restaurants, and their franchisees are doing well, which in turn means more money for QSR. For the full year 2025, QSR's total revenues were $9,434 million.

2. Net Income: This is the company's bottom-line profit – the money left over after all expenses, including taxes, have been paid. For QSR, a healthy and growing net income shows that they are not only bringing in a lot of money but also managing their costs effectively. It's the ultimate measure of how profitable the business truly is. In 2025, QSR reported a net income of $1,075 million. For the first quarter of 2026, their reported net income was $338 million.

3. Operating Cash Flow: This metric shows how much cash the company's core business activities are generating. For a franchised model like QSR's, strong operating cash flow is vital because it indicates that the recurring royalty and fee payments are consistently flowing in. This cash can then be used for things like paying down debt, investing in the business, or returning money to shareholders.

4. Dividends: Since QSR is a mature company with established brands, it often returns a portion of its profits to shareholders in the form of dividends. This metric tells you how much cash per share the company is paying out to its investors. For many investors, a consistent and growing dividend is a key reason to own shares in a company like QSR, as it provides a regular income stream. In 2025, QSR returned approximately $1.1 billion of capital to shareholders.

5. CapEx (Capital Expenditures): Even though most restaurants are franchised, QSR still invests in its brands and system. CapEx represents the money the company spends on things like improving existing restaurants, developing new technology for franchisees, or investing in its supply chain. For example, QSR plans to invest up to $700 million through 2028 in its "Reclaim the Flame" plan, which includes restaurant remodels and equipment upgrades. Monitoring CapEx helps you understand how much QSR is investing back into its business to support future growth and maintain the quality of its brands. The company anticipates capital expenditures of around $400 million in 2026.

How to Value This Company

The ONE most relevant valuation metric for Restaurant Brands International is the P/E Ratio (Price-to-Earnings Ratio).

The P/E ratio is a straightforward way to figure out if a stock is cheap or expensive compared to how much profit the company makes. You calculate it by taking the current stock price and dividing it by the company's earnings per share (EPS).

For QSR, the P/E ratio is particularly useful because it's a well-established, profitable company with consistent earnings. When you look at QSR's P/E ratio, you're essentially seeing how much investors are willing to pay for each dollar of profit the company generates.

Here's how to think about it:

• A higher P/E ratio might suggest that investors expect the company's earnings to grow faster in the future, or that it's a very stable and reliable business.
• A lower P/E ratio could mean that the stock is undervalued, or that investors expect slower growth, or that there are some risks involved.

To use it, you would compare QSR's current P/E ratio to its historical P/E ratios, as well as to the P/E ratios of similar fast-food companies. If QSR's P/E is lower than its historical average or its competitors, it might be considered "cheap." If it's higher, it might be considered "expensive." As of May 15, 2026, Restaurant Brands International had a trailing price-to-earnings ratio of 26.91.