Burger Franchises and the Fast-Casual Sector
The decision to start a business is not one that is made lightly. While owning a business provides entrepreneurs an excellent opportunity for personal, brand, and financial growth, there are many factors to consider before deciding which avenue works best for you. Particularly in the ever-changing landscape of 2020, it is important to acknowledge and understand the pros and cons of various opportunities and how they will affect your business, both short and long-term.
The fast-casual restaurant segment has been a growing and steady market for over two decades now. Restaurants like Chipotle and Panera have been around for years and still manage to maintain their customer loyalty. Fast-casual restaurants appeal to a broad range of customers who are looking for healthier offerings than their typical fast-food counterpoints, at reasonable prices, and the opportunity to have a pleasurable experience, whether dine-in or takeout.
There are various opportunities in the fast-casual dining sector, but burgers seem to fit the niche to perfection. The “better burger” (burgers in the $8–$12 range) wave really hit its stride during the early/mid-2000s, led in no small way by Five Guys, who were at the forefront of the trend. What came after was an onslaught of restaurants that followed a similar model, with various adaptations to make themselves stand apart. These brands include Shake Shack, Umami Burger, The Counter, and so many more. Even though the most successful spots try to break it down — burgers, fries, shakes, as a consumer, the dining options can often feel overwhelming — so how about for a franchisee?
For the purposes of this article, let’s narrow our burger franchise options down to three: Five Guys, Mooyah, and Wayback Burgers.
FIVE GUYS: THE MODEL CITIZEN
Five Guys founder Jerry Murrell has quoted his mother as saying: “If you can give a good haircut or if you can serve a good drink at a bar or if you can serve a good hamburger, you can always make money in America.” What started as a family business took off as a franchise in 2003, with a simple, limited menu and fresh, never frozen (only “cooled”) ingredients.
With a mix of company-owned and franchised locations, Five Guys currently has no markets available for franchising in the United States or Canada. So, if you are looking to start your own Five Guys in North America, you are out of luck.
The initial investment cost plus franchise fee for a Five Guys franchise is comparable or lower than many of its fast-casual and fast-food competitors. And they are careful to remind you that “sales revenue does not equate to income.” They also make clear that this might not be the best move for a new franchisee, particularly as a sole proprietor. The support just isn’t there for you as an Operating Principal.
Five Guys is special in that they have stood the test of time through good times and bad, and have maintained quality products and customer loyalty. But the simplicity in their model is a double-edged sword.
MOOYAH: THE COOL KID
Mooyah is the youngest burger franchise of the bunch. Started in 2007, the Plano, Texas-based brand follows the basic blueprint of many of their predecessors and current competitors: burgers, fries, and shakes. Unlike Five Guys, they have plenty of availability throughout the U.S. and are eager to grow. But with the cache of a younger and buzzed-about brand comes a heftier price tag for investors and new franchisees.
The information on their website about becoming a franchisee offers a lot of positivity, but not a lot of information. The $30,000 initial franchise fee is accompanied by buzzwords like “hot” and “fresh,” and the initial investment of $403K – $564K is the highest of the three brands.
One of the things Mooyah has going for it is its relative newness and youthful image. That can go a long way for a bit. They are still a relatively mid-sized operation, and their youth reflects positively in their apparent commitment to giving back portions of sales to local charities and customers’ social causes. While this is a company worth looking into, their starting costs may be prohibitive to the very franchisees they are trying to attract.
WAYBACK BURGERS: THE COMMUNITY CHAMELEON
Wayback started way… back… in 1991 as a burger stand in Delaware and began franchising in 2008. According to their current Franchise Disclosure Document (FDD), the initial investment for owning a Wayback Burgers is between $209,000 and $524,500. This puts them at a very accessible price point.
Wayback has a stunning new design that gives the new and updated locations a clean, crisp look with a nostalgic feel. But what really sets this burger brand apart is their unwavering commitment to their franchisees, guests, and team members.
Around mid-March 2020, the COVID-19 pandemic brought the restaurant industry to its knees, regardless of location or price points. For some, the devastation was total, but for others — like Wayback — the sudden catastrophe posed an opportunity to adapt and grow. Already known for offering a great deal of support to their franchisees, the Wayback team poured more attention into avenues that would make their products more accessible to guests, through the Wayback app, while also ensuring that their locations were safe for team members and guests alike.
Through persistence and dedication, they were able to manage this shift while still catering to guests. Sign up for their app: they offer great deals and steals during this crazy time, and it is a well-curated experience. Self-serve in-restaurant free drink refills are a thing of the past, but in their place, a guest could approach the counter, and a friendly team member will fill a new cup for you.
Is Now the Right Time?
In a word, yes.
Despite the challenges faced by the restaurant industry since the start of the coronavirus pandemic, fast-casual franchise brands such as Wayback Burgers are thriving, and those forced into unemployment or early retirement have started to consider options that are more appealing than returning to the pressure or monotony of a corporate career. In fact, according to the U.S. Census Bureau, business applications are up by nearly 70 percent this year, compared to the same week the year before.
With significant economic upheaval sweeping the globe, change is coming, and it’s coming fast. For those who wait too long, the opportunity may come and go before you have the chance to take it.