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

• Section I – Background information on the BGR – Burgers Grilled Right franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a BGR – Burgers Grilled Right 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 BGR – Burgers Grilled Right franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned BGR – Burgers Grilled Right 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 BGR – Burgers Grilled Right’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average and median net sales for the 8 affiliate-owned, 8 franchised, and all 16 BGR Restaurants (affiliate-owned and franchised) that were open and operating during the entire 2018 calendar year and were open as of the Issue Date of the 2019 Disclosure Document

• 2018 average and median net sales, cost of goods sold, labor costs, estimated royalty, and estimated local advertising spend for the 8 affiliate-owned BGR Restaurants that were open and operating during the entire 2018 calendar year and were open as of the Issue Date of the 2019 Disclosure Document

Section I – Background Information

11 Things You Need to Know About the BGR – Burgers Grilled Right Franchise

Parent Company Announces All Its Burger Brands Will Be Serving Beyond Meat

1.  At the end of June 2019, Chanticleer Holdings, Inc. announced that Beyond Meat burgers will be available starting July 1 at its multiple better burger brands’ locations, offering consumers a 100 percent plant-based Beyond Burger patty. Participating brands include BGR – Burgers Grilled Right, Little Big Burger, and American Burger Co.

2.  Each brand has designed its own unique burger build using fresh local ingredients. The Beyond Burger patty is free from GMOs, gluten, and soy and has lower saturated fat than regular beef, but still delivers flame-broiled flavor and 20g of plant-based protein.

3.  Fred Glick, president of Chanticleer Holdings, stated, “With roughly one-third of consumers identifying as flexitarians, we’re excited to now officially have our menus offer consumers burgers which provide a plant-based alternative to our current menu offerings. We also understand that consumers are more conscious than ever about making responsible food choices that are not only healthy, but that also take sustainability and ethical considerations into account. The desire for an alternative like this was one of the most repeated requests made by our own customers in our recently completed consumer study.”

4.  On a final note, Glick added, “With recent notable traffic increases cited by brands like Del Taco and Burger King who too have launched plant-based alternatives in their menus, we are cautiously optimistic we have the potential to see similar results as this new offering replaces our previous already popular veggie burger offerings.”

Parent Company Signs Exclusive Partnership Deal with DoorDash to Offer Delivery for All Its Brands

5.  In early April 2019, Chanticleer Holdings, Inc., parent company of BGR – Burgers Grilled Right, announced that it had entered into an exclusive partnership with DoorDash to offer delivery services across all of the company’s brands.

6.  According to Fred Glick, president of Chanticleer Holdings, “We are pleased to announce the signing of an exclusive agreement with DoorDash. This partnership is expected to help minimize costs associated with delivery while creating an entirely new revenue vertical for our brands. I personally view this initiative as an extension of our internal marketing efforts that will allow new guests to try our products through their platform. It will be our focus to transfer those guests to our own loyalty platform to maintain our critical consumer information and further reduce our expenses to deliver our product.”

7.  Glick continued, “Delivery is just one component of our strategy as we get closer to launching loyalty and multi-channel, personalized marketing for our customers later this year. We will add new mobile applications featuring rewards, VIP tiers, and in-app ordering. This all-in-one customer engagement platform will help us leap forward with targeted email marketing and integrated customer feedback tools without buying and implementing multiple different technologies.”

Company History

8.  BGR The Burger Joint, now BGR – Burgers Grilled Right, was founded in 2008 by Mark Bucher in Bethesda, Maryland. Bucher wanted BGR to sell elevated burgers in a casual dining setting. To make the best burger possible, Bucher worked with Danny Alahouzos, co-owner of Prime Foods in Hyattsville.

9.  Initially, the BGR burger was made with prime cuts of brisket, short ribs, and sirloin sourced from grass-fed, grain-finished Pennsylvania cattle. While these burgers were a hit with customers, they became too expensive to make as BGR grew. Eventually, BGR stopped working with Prime Foods and turned to a large beef-grinding facility in New York. Although BGR no longer uses ingredients that are quite as premium as when it first started, the brand still strives to produce high-quality burgers.

10.  Over the years, BGR has grown slowly and in 2015, Bucher sold the company to Chanticleer Holdings, Inc., the parent company of Hooters, Just Fresh, American Burger Co., and Little Big Burger. In recent years, Chanticleer Holdings has been re-branding BGR The Burger Joint as BGR – Burgers Grilled Right. All new BGR Restaurants will open under the name BGR – Burgers Grilled Right while existing BGR stores will be remodeled to reflect the new branding efforts.

Entrepreneur’s Franchise 500

11.  BGR – Burgers Grilled Right did not rank on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of BGR – Burgers Grilled Right 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 BGR – Burgers Grilled Right’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

Franchised

2016

• Outlets at the Start of the Year:  9
• Outlets at the End of the Year:  10
• Net Change:  +1

2017

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  11
• Net Change:  +1

2018

• Outlets at the Start of the Year:  11
• Outlets at the End of the Year:  10
• Net Change:  -1

Company-Owned

2016

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  10
• Net Change:  0

2017

• Outlets at the Start of the Year:  10
• Outlets at the End of the Year:  8
• Net Change:  -2

2018

• Outlets at the Start of the Year:  8
• Outlets at the End of the Year:  11
• Net Change:  +3

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

• This Item sets forth historical revenue and certain operating expense information for the 16 Restaurants that:

• (i) operate utilizing the Proprietary Marks and System in connection with a business that is substantially similar to the business being offered in the Disclosure Document;
• (ii) were open and operating during the entire 2018 calendar year (the “Measurement Period”); and
• (iii) were open as of the Issue Date of the Disclosure Document (collectively, the “Representative Restaurants”).

• Of these 16 Representative Restaurants that were open during the entire Measurement Period, please note that 8 of these locations are owned and operated by affiliates (each, an “Affiliate-owned Restaurant”) and 8 of these locations are owned by BGR’s franchisees (each, a “Franchised Restaurant”) as of the Issue Date of the Disclosure Document.

• As of December 31, 2018, there were 11 Affiliate-owned Restaurants and 10 Franchised Restaurants. One Affiliate-owned Restaurant was excluded because it was not open during the entire Measurement Period, and 2 Affiliate-owned Restaurants were excluded because they were acquired by an Affiliate during the Measurement Period and therefore did not operate as Affiliate-owned Restaurants during the entire Measurement Period.

• BGR has excluded the information of 2 Franchised Restaurants that commenced operating during the Measurement Period.

• BGR has not audited this information, nor independently verified this information.

Part 1 – Average Net Sales (2018)

• Part 1 contains the Average Net Sales for the Affiliate-owned Restaurants and Franchised Restaurants, as well as the Average Net Sales for the Representative Restaurants as a whole.

Franchised Restaurants