FDD Talk: The Burger 21 Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Burger 21 franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Burger 21 franchise, based on Item 7 of the company’s 2015 FDD

• Section III – Presentation and analysis of Burger 21’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:

• 2014 average gross sales, weekly gross sales, cost of goods sold, gross profit, sales per guest, and hourly labor cost for the 4 company-owned and 6 franchised Burger 21 Restaurants that were in operation for a full 12 months in the 2014 Year

• 2013 average gross sales, weekly gross sales, cost of goods sold, gross profit, sales per guest, and hourly labor cost for the 4 company-owned and 1 franchised Burger 21 Restaurants that were in operation for a full 12 months in the 2013 Year

• 2012 average gross sales, weekly gross sales, cost of goods sold, gross profit, sales per guest, and hourly labor cost for the 2 company-owned Burger 21 Restaurants that were in operation for a full 12 months in the 2012 Year

Section I – Background Information

Burger 21 is the latest fast-casual better burger concept with a menu featuring 21 chef-inspired burgers, hand-spun shakes, salads, and more.

It was November 2009 when the owners of the fondue chain The Melting Pot Restaurants were bitten by the better burger bug. But this is not an easy segment to break into. After creating and testing literally dozens of different burger concepts, the first Burger 21 was opened in the Westchase area of Tampa, Florida, in November 2010, to show what it means to go beyond the better burger.

With 20 locations in eight states open and another half-dozen slated as coming soon or under construction, here’s how Burger 21 gets its grill on in the highly competitive better burger segment:

Fun, Hip, Family Atmosphere

It’s hip and modern, but also family oriented, which means it’s not uncommon to see families of three generations enjoying the unique creations at Burger 21.

Each location prominently displays many B-isms such as B-saucy, B-different, B-comfortable, and B-involved in hipster fonts and graphic designs on the back of the menu and painted on the walls. They represent both the brand’s values and what customers can expect from the food and service.

Community Connections

Burger 21 takes its community involvement quite seriously. Each restaurant donates 10% of each day’s sales to a local charity or school on the 21^st of each month. Thus far, Burger 21 has provided more than $127,000 in contributions to local charities and schools.

Creative Menu

Burger 21’s offerings range from hand-crafted, freshly ground Certified Angus Beef to chicken, turkey, vegetarian, shrimp, and tuna burgers; fresh salads; all-beef hot dogs; chicken tenders; and an extensive shake bar, including hand-crafted shakes, floats, and sundaes.

Just the names of some of these burgers are quite intriguing, including Ahi Tuna, Tex-Mex Haystack, The Skinny (turkey burger), Cinco Burger, The Greek (vegetarian), and The OMG! The chain’s signature shakes also rise to the occasion, including such flavors as Bananas Foster, Key Lime Pie, Ybor City Double Espresso, and Crème Brûlée.

Early Accolades

Burger 21 has been named one of Fast Casual’s Top 100 Movers and Shakers for three years running, most recently clocking in at the #5 slot. The chain’s president, Mark Johnston, was acknowledged as one of the Top 25 People of 2014 by Fast Casual for his strategic leadership in the growth and development of the chain’s brand. QSR named it among the Best Franchise Deals of 2014.

New Head Chef

The chain recently promoted Mike Remes to be the chain’s first dedicated corporate chef in charge of all aspects of the brand’s menu development, including its monthly feature burgers and shakes. His first creations: The Bayou Burger, a play on New Orleans-style gumbo; a fried green tomato burger; and the Turducken – fresh-ground chicken and rosemary, inside honey sage duck, inside chive and Dijon ground turkey, with brie and cherry cranberry chutney. And if that doesn’t pique your interest, nothing will!

Section II – Estimated Costs

• Please click here for detailed estimates of Burger 21 franchise costs, based on Item 7 of the company’s 2015 FDD.

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis