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Better Burger Burnout Coming?

I was browsing a few blogs and surprised at how many “we just make simple great burgers, fries and shakes” restaurant and franchises were popping up.  Some are going all-organic, most aren’t.  McDonald’s new higher-priced Angus beef burger is considered a response to the better burger trend.

Most everyone likes a good burger and are willing to pay up to $5 regularly for good one.  I think the new wave of better burger joints will have some staying power compared to other pure trends like tart frozen yogurt, salad or pita/wrap specialty franchises.

From what I’ve seen already from clients, these aren’t wildly profitable until you reach $1 million or more in sales per location assuming your rent is under 7% of gross sales, and that’s very difficult to do.Let’s look at one city.  

Opening in Austin in the past year were:

Philadelphia Weekly put together this chart to compare the food, atmosphere, and wait times of various burger places.

About Ryan Knoll

Attorney and advisor with an interest in franchising. Feel free to email me comments and questions on the "Contact Us" page.
7 comments
FuwaFuwaUsagi
FuwaFuwaUsagi

Understand I am not making a recommendation, nor have I vetted the concept, nor have I used my quick vet system to analyze Johnny Rockets, nor have I lloked at the FA of FDD, so with those caveats and their associated implications in place I will offer the following commentary: IMNTBMFHO, Johnny Rockets has a brand presence and while you can readily duplicate the experience, the brand does carry weight and has an innate worth when properly located. In an area where the brand is known I believe the brand is strong enough to steer customers in the door, by passing several other concepts that do nto compete in this market. I believe situs is the key to this concept, and you need to very, very careful about where you locate this concept. In contrast if I was going to open on of the concepts listed above (and I would not as a franchisee, but I would readily do so as a roll my own) I would be less cornered with situs and more concerned with the cost of the lease verses what it will deliver. In the case of Johnny Rockets, while the cost for delivery is obviously key, the total demographic package seems very important. Once gain I'll say this phrase, Johnny rocket's IMNTBMFHO, is about the experience. I know a bit of information about this concept, so within the confines of my NDA I'll just say read the preceding paragraph carefully. In my community I would not even entertain opening one. A city over it might prove desirable. I would be very interested in the Pundit's take also. Regards, FuwaFuwaUsagi

AverageJoe
AverageJoe

How about "Johny Rockets"? Do you guys see any value with this kind of a franchise? BTW, FuwaFuwaUsagi and Ryan, I really admire your comments. They are very helpful and un-biased Regards

FuwaFuwaUsagi
FuwaFuwaUsagi

You might want to look at who is running SmashBurger and past associations. If you want to do business with that caliper of individual than you get what you deserve. However SmashBurger is looking for big fish to swim with them, so the assumption is the big fish have attorney's that know how to defend their interests. Why anyone would want to do business with a disreputable character is beyond me.

Ken
Ken

Hey you guys should also check out Smash Burger. It's a new burger franchise which was started by some of the guys who started Quiznos. I know.... I know.... that Quiznos is in a ton of legal hot water now but the Smash Burger brand is one that you are going to see a lot of very soon. I'm pretty sure they signed some fairly large deals with some multi-unit franchisees. Here in Colorado they did an article about them and a fitness franchise on the rise. Their web adresses are www.smashburger.com and www.illuminategym.com Check them out and tell me what you think of Smash Burger...

Ryan Knoll
Ryan Knoll

[quote comment="576065"] Im an avid twitter and facebook user so I've been waiting for Five Guys to come to Huntington Station for a while. All my friends heard about it online before it opened. If some fat old guy like you opened a burger I wouldnt care and never would here about it.[/quote] 1) The power of Twitter and Facebook is more authentically harnessed AFTER opening, through recommendations from real people in your city. A Five Guys may get a little extra pop before opening due to its reputation found by an online search or social network, but these people were likely going to visit anyway; and what's most important is whether they turn into repeat customers....which will be based solely on their in-store experience. In other words, it can help a little but net-net its not going to make that big of a difference even for a Five Guys. 2) Anonymous, you kill your credibility by making antagonistic and stupid comments. You aren't clever or funny, and with your unfocused cocky attitude I'd predict you'd run a burger restaurant into the ground rather quickly.

FuwaFuwaUsagi
FuwaFuwaUsagi

Im an avid twitter and facebook user so I’ve been waiting for Five Guys to come to Huntington Station for a while. All my friends heard about it online before it opened. So if I understand your premise, you believe that because a franchise uses communication technology as part of an advertising campaign that is a reason to become an operator? Has it ever occurred to you that this is a minuscule part of an advertising and marketing campaign that is best outsourced? Yes, it may surprise you but this technology is rather plebian, and boutique firms are springing up that allow you to outsource this function. It is not even practical to consider doing this in house as this has off-shore and automation written all over it. If some fat old guy like you opened a burger I wouldnt care and never would here about it. Your ignorance is only exceeded by your misfounded arrogance. I seriously doubt anyone would ever consider me fat. Masculine, handsome, and debonair I have been called, but fat is not an adjective normally associated with me. I have a rather muscular physique and am in excellent physical condition. And while age is a relative term, I am still considered in my prime with several years of prime ahead of me. Which is to say, you are wrong, yet again. Hey but nice try.

FuwaFuwaUsagi
FuwaFuwaUsagi

This is yet another area where I see little value in a franchise. The better burger market is well understood by consumers and the snob appeal of it lend itself very well to a local enterprise. I fail to see what value any of these franchises will bring to this market vertical. I would much rather be a "hole in the wall" known for outstanding burgers or a independent up against the big guys in this market than part of any franchise in this market segement.