Forbes Magazine just released their inaugural list of America’s 100 Most Promising Companies, where Smashburger, the fast casual “better burger” franchise, ranked #1.
The Methodology
Forbes’ search began with a free online survey. Entrepreneurs could nominate their own companies or be nominated by those familiar with their businesses (lawyers, accountants, p.r. professionals). Contenders had to be privately held, for-profit, stand-alone businesses.
Forbes teamed up with CB Insights, a New York City-based data firm that tracks investment in high-growth private companies. CB Insights has developed a complex software called Mosaic to help lenders and investors dole out capital more efficiently. Mosaic mines data from 30,000 sources (from press releases and social networks to job boards and court filings) to come up with one score that measures a company’s potential.
Using the Mosaic score as a preliminary ranking, Forbes refined the list by gathering additional data via a second, more detailed survey. Forbes asked for annual revenue and the number of employees for 2008 and 2010, and estimates for 2011.
Forbes also considered the size of the addressable market, the strength of major competitors, the experience of the management team, any significant customers and strategic partnerships, the amount of outside capital raised and how much of the founders’ own money was on the line (the more the better). Then, Forbes spoke with representatives of each company to confirm the information and gain additional insights on their operations.
Why Smashburger?
What makes Smashburger the Most Promising Company in America in the eyes of Forbes Magazine?
1. Growth
“In the midst of a severe recession, this Denver company will have grown to 143 locations (half company-owned, half franchised) and $54 million in annual revenue by the end of 2011. Another 450 franchise agreements are already on the books.”
2. Food
“It begins with a ball of raw Angus beef, which a grill cook ‘smashes’ with a handheld steel mold onto a butter-brushed grill for ten seconds, giving the patty a caramelized sear to lock in the juices. Then come unconventional toppings like avocado, fried eggs and garlic mushrooms, as well 11 sauces, including chipotle mayo and spicy brown mustard. Buns? Everything from multi-grain to a pretzel roll.”
3. Service
“Baby boomers, guys like me, really value good service and a good experience,” says Scott Hume, editor of Burgerbusiness.com. “I think they understand that.”
4. Employee Incentives
“New employees at company-owned stores make $9 an hour (minimum wage is $7.25) and earn bonus ‘Smash Cash’ for various achievements. If a line cook fills orders in under six minutes on average, he gets an extra 50 cents per hour. Store managers can earn monthly bonuses — up to 30% of their base salary — based on monthly revenues and customer reviews. Franchisees aren’t required to use this model, but many do.”
5. Strong Management
HUMAN Healthy Vending, a company that sells healthy vending machines, made the list at #37. HUMAN had $1.4 million in revenues (during the latest fiscal year) and 7 employees. No other reason was given for their inclusion.
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