In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the BurgerFi franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a BurgerFi franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a BurgerFi franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned BurgerFi outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of BurgerFi’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average, median, highest, and lowest net sales for the 24 franchised and affiliate-owned BurgerFi Restaurants open and in operation for at least 60 months as of December 31, 2018
- 2018 average, median, highest, and lowest net sales for the 47 franchised and affiliate-owned BurgerFi Restaurants open and in operation for at least 48 months as of December 31, 2018
- 2018 average, median, highest, and lowest net sales for the 60 franchised and affiliate-owned BurgerFi Restaurants open and in operation for at least 36 months as of December 31, 2018
- 2018 average, median, highest, and lowest net sales for the 86 franchised and affiliate-owned BurgerFi Restaurants open and in operation for at least 12 months as of December 31, 2018
- 2018 average cost of goods sold and labor costs for the 16 affiliate-owned BurgerFi Restaurants open and operating for all of 2018
Section I – Background Information
27 Things You Need to Know About the BurgerFi Franchise
Earns an “A” from Major Consumer and Environmental Groups
1. In October 2018, BurgerFi was named one of the top two brands in the burger industry to serve beef raised without the use of antibiotics, in the fourth annual burger edition of the Chain Reaction report and scorecard, produced jointly by U.S. PIRG Education Fund, Center for Food Safety, Consumer Reports, Food Animal Concerns Trust, Friends of the Earth, and Natural Resources Defense.
2. BurgerFi earned an “A” on the scorecard, while 22 of the 25 largest burger chains received an “F” for failing to source beef raised without routine use of antibiotics.
3. BurgerFi’s mission is to serve the top 1% of best-tasting certified, American Black Angus beef from the finest ranches across the country. Known for delivering the all-natural burger experience, BurgerFi has a company-wide commitment to quality food that ensures no steroids, antibiotics, growth hormones, chemicals, or additives are ever used.
4. Corey Winograd, CEO of BurgerFi, said, “The results from the fourth annual 2018 Chain Reaction Report came as no surprise to us. BurgerFi’s brand ethos from the beginning has always been that of being naturally better with authentic ingredients for everyone.”
5. The Chain Reaction scorecard spotlights antibiotics policies and practices in the beef industry, the largest buyer of medically-important antibiotics among food animal sectors. Public health experts warn that the widespread use of antibiotics for meat production is rendering these medications less effective by contributing to the creation and spread of drug-resistant superbugs.
6. BurgerFi has taken a leadership role in addressing antibiotic overuse. Its recent “BURGERS for Every 1” campaign was inspired by the fact that only about 1% of the beef produced in the United States meets the strict BurgerFi standards of quality.
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7. Winogard added, “We offer an experience that is for every unique individual who deserves to be rewarded with something better. Our approach to every aspect of the BurgerFi experience – from the friendliness of our team to our sustainability efforts and fresh better burgers – is for guests to see and taste the difference and we encourage other brands to follow our lead.”
Targets Florida and Georgia for Expansion
8. At the end of January 2019, BurgerFi announced that the brand is expanding in Florida, with new locations planned for Clearwater-St. Petersburg and Stuart, and the Atlanta-metro area. With over 100 restaurants at the time of the announcement, BurgerFi is continuing to expand with another 25-30 restaurants planned in 2019.
9. Charles Guzzetta, franchise development manager of BurgerFi, said, “We are thrilled that BurgerFi restaurants will be in these key regions as we continue our national expansion. They join our mission to serve the top 1% of best-tasting certified, American Black Angus beef and improve guest experience across all platforms: in-store, delivery and online.”
10. Restaurant industry veteran Nick Quarantillo will be opening three locations in Clearwater-St. Petersburg, Florida, reflecting the Tampa metro area’s continued economic development. The timing and growth potential for BurgerFi was a key driver for his entry into this category.
11. As a restaurateur in South Florida where BurgerFi has a large presence, Quarantillo has long recognized the brand’s commitment to the environment, corporate citizenship, and their drive to be better than other burger franchises.
12. Quarantillo said, “Americans are looking for a fresh, better burger that has the same quality every time they come in. Families especially are looking for an elevated dining room experience – from the friendliness of the team to sustainability efforts.”
13. Longtime friends and BurgerFi aficionados Greg Gatto and Scott Hodes of The Burger Bunch, LLC are opening the first BurgerFi in Martin County, Florida. Gatto and Hodes have known each other nearly a decade and chose Stuart because the coastal community has a mix of residential and high-traffic areas.
14. According to Hodes, “We’ve spoken to residents who are known to drive nearly 45 minutes to go to the nearest BurgerFi. We believe that many families share the diverse eating habits that our own have, and we love the BurgerFi concept because it’s a place vegans, vegetarians and meat-lovers can all enjoy.”
15. Dhruv Patel and his three partners in SAINI, LLC bring over a decade of experience in the operation of multiple gas stations, convenience stores, hotels, and quick-serve restaurants. The group explored many opportunities with the goal of diversifying their business, and discovered BurgerFi. They chose Atlanta because it is both a major city and a new hot spot for millennials who appreciate better burgers.
16. Patel added, “I came upon BurgerFi next door to a business meeting I had in Tallahassee, and told my partners how much I loved the food. We started speaking to the BurgerFi team who showed us operations in other locations, and my partners also fell in love with the product – as has my entire family.”
Announces Plans to Expand in Puerto Rico
17. Near the end of June 2019, BurgerFi announced that it was bringing the fast-casual, high-quality food concept to Puerto Rico for the first time. Over the course of the next five years, BurgerFi will open six new stores across the island and create hundreds of much needed jobs.
18. The six Puerto Rico locations will be owned and operated by franchisee Phillip Faigenblat, an experienced entrepreneur who owns 14 Denny’s franchises in the territory. Faigenblat recognized the need for a fast-casual restaurant chain on the island and was drawn to BurgerFi because of its reputation for fresh, healthy, high-quality food.
19. Faigenblat added, “There’s surging interest in healthy dining in Puerto Rico, as people become more conscious of what they are eating. Puerto Ricans are also digitally savvy, and looking for alternatives to both fast food and sit-down family dining. BurgerFi’s quick service combined with quality food that can be ordered online fits perfectly with these needs and is bound to be a hit in Puerto Rico.”
20. The first Puerto Rico location is slated to open in the greater San Juan area by the end of 2019, while the other five stores are expected to open over the course of the next five years. The six stores will employ over 200 people and help provide livelihoods for those who have been affected by Puerto Rico’s recent economic and weather-related problems.
21. All six Puerto Rico stores will offer BurgerFi’s signature cooked-to-order menu items, including burgers made from the top 1% of certified Angus beef, vegetarian and chicken burgers, Wagyu hot dogs, hand-cut fries, onion rings, creamy shakes and custards, and craft beers.
22. The interiors of each of the six new restaurants will average at 3,000 square feet and will feature various eco-friendly elements such as wood-paneled walls made from Number 2 southern pine lumber (the world’s most renewable timber), 10-foot fans that consume 88% less energy, and 100% energy-efficient LED lighting.
23. The outdoor seating areas, which are perfect for Puerto Rico’s warm, sunny climate, will feature picnic and four-top tables each made from over 700,000 upcycled milk jugs and industrial-style red and gray chairs, each made from 111 upcycled Coca Cola bottles. Menu items can either be consumed onsite or delivered to a residence or office.
24. BurgerFi was founded in 2011 by John Rosatti in Lauderdale-by-the-Sea, Florida inside of a former Burger King. The brand focuses on using high-quality ingredients and making all-natural burgers. In fact, BurgerFi was one of the first restaurant chains to offer the Beyond Meat Burger, which is a completely plant-based burger that mimics real meat.
25. Additionally, BurgerFi focuses on eco-friendly and sustainable restaurant components like chairs made from upcycled Coca-Cola bottles, tables created from more than 700,000 upcycled milk jugs, wood-panel walls designed from No. 2 Southern Pine Lumber – renowned for its renewable nature, ten-foot fans that consume 66 percent less energy, and counter tops made from 100 percent compressed recycled paper.
26. Rosatti began franchising the BurgerFi concept from the beginning and the brand has grown fairly quickly in less than a decade. Today, there are BurgerFi locations in over 20 U.S. states and in countries such as Panama, Mexico, and Kuwait.
Entrepreneur’s Franchise 500
27. BurgerFi ranked No. 439 on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of BurgerFi franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on BurgerFi’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 63
- Outlets at the End of the Year: 72
- Net Change: +9
- Outlets at the Start of the Year: 72
- Outlets at the End of the Year: 79
- Net Change: +7
- Outlets at the Start of the Year: 79
- Outlets at the End of the Year: 85
- Net Change: +6
- Outlets at the Start of the Year: 14
- Outlets at the End of the Year: 16
- Net Change: +2
- Outlets at the Start of the Year: 16
- Outlets at the End of the Year: 16
- Net Change: 0
- Outlets at the Start of the Year: 16
- Outlets at the End of the Year: 19
- Net Change: +3
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
- All of the data disclosed below is as of December 31, 2018. This data is not audited, and is derived from information provided by franchisees as well as from affiliate-owned Restaurants.
Part 1 – Net Sales of Restaurants Open for at Least 60 Months as of December 31, 2018
- BurgerFi had 24 franchised and affiliate-owned Restaurants open and in operation for at least 60 months as of December 31, 2018.