TAKE A BITE
Tuck into a juicy burger business with a big personality on the side and individuality on the menu.
Emerging franchise chains in Australia talk all things burgers.
While the healthy eating trend is not new, it is a constant presence in today’s food industry. Greasy burgers may still a guilty pleasure, but consumers want options – and many of them.
Burger joints now need to offer bread options, a range of non-bread options (such as lettuce wraps) and both premium and fatty meats. But this has not impacted the industry in a bad way, with an IBISWorld report last year saying increased demand for gourmet burgers is expected to drive industry revenue growth.
Consumers are still busy so the demand continues for fast-food options despite the popularity of healthy food and premium meats. This means there is plenty of opportunity in the franchise space for such offerings as gourmet burgers, fast-food burgers and “healthy” burger chains.
IBISWorld says that in the next five years, fast-food restaurants are projected to focus on ambience and experience as a means of attracting customers. Burger shops are also likely to spend more on their image to capture a greater share of the convenience-food market.
The research company also says consumers love burgers because they are convenient, adaptable and relatively inexpensive – they almost sell themselves.
For an inside glimpse into this diverse and exciting space, Inside Franchise Business speaks to burger franchise owners such as Burger Love, Carl’s Jr, Milky Lane and Hello Harry.
MILKY LANE
Milky Lane’s original restaurant came about in 2016 with its first location at Bondi
Beach. The bustling burger chain now has three stores (adding Sydney suburbs Cronulla and Parramatta) but has big plans to franchise across Australia.
The team behind the restaurant was not sure at first if franchising was the way to go to reach its national expansion plans. However, with at least one email a day requesting a franchising opportunity, Milky Lane saw franchising as the best way to expand and still have invested business owners at the helm.
“We’re aiming to open a limited number of Milky Lane restaurants throughout Australia in 2018 in order to ensure the success and support for each of these initial franchisees,” says Pete Haselhurst, managing director.
“We are also looking to develop an express model, which we will then offer alongside the full restaurant as we continue our expansion, and we already have strong interest to take Milky Lane to a number of select destinations globally in 2019.
“[The restaurant in] Bondi has shown that customers will travel from all over Sydney, if not New South Wales and even further. We want to share the
Milky Lane experience with as wide an audience as possible, while at the same time making sure that each restaurant remains a destination in itself without becoming too commonplace.”
Haselhurst says he is looking to grow a network of enthusiastic, like-minded franchisees.
The Cronulla outlet has surpassed expectations, says Haselhurst.
“It’s a great feeling to see the investment we’ve made in our training and systems shown to be replicable, scalable, and most importantly, an overwhelming success,” he says.
Milky Lane’s four partners are an entrepreneur, marketing guru and two top chefs who worked with celebrities.
With top chefs at the helm it’s no surprise that customers line up at the door.
“Our culinary skills and attention to detail when cooking a burger is secondto-none, and undoubtedly why people return week after week for the same mouth-watering taste and memorable experience,” says Haselhurst.
The business prides itself on amazing customer experience, great food, cocktails and desserts, as well as music and street art, and strong social media engagement all that keeps “us one step ahead of our competitors”.
The brand’s ultimate objective is to ensure every franchisee in the network is successful.
The business has sold five new territories and has more than 65 applications in review. It is set to launch its national franchise campaign in March, 2018.
“Our model is designed specifically to be boutique and because of this strategy, we will only have a limited number of territories available,” says Haselhurst.
The target is to open 10 stores by the end of 2018.
BURGER BITE
• Initial franchise fee: $50,000 plus GST • Ongoing franchise fee: 6.5% of gross
sales plus GST
• Marketing levy is 2% of gross sales plus GST, with the franchisee required to spend at least 1% of gross sales on the own local area marketing each quarter.
• Investment: varies from $250,000 to
$640,000 plus GST.
• Franchise term: 5 years
BURGER LOVE
Burger Love is taking its own spin on franchising with a “branchising” model. This is not 100 per cent a franchise and is also not independent. It is somewhere in between.
“We actively take a stake in the businesses and have a franchise system
but not the traditional franchise model, which is very restrictive,” says co-founder and marketing director Steve Agi. He says some of the licensees come from other fast-food franchises but were tired of the traditional franchise system.
“The model is a lot more interactive because obviously there are challenges, but we face them together and licensees find it a lot more reassuring.”
The founder says that with a great brand, a thorough training process and solid systems in place, potential licensees are knocking at the door. The chain was founded in South Melbourne in 2001 with a wide-ranging offering including chicken, cheeseburgers and southern-style comfort food.
After deciding to just focus on burgers, the chain has had three store openings in the past two years with another three set to open in the first half of this year. Also on the drawing board is a food truck.
Meanwhile, with its passion for all things innovative, the chain will become the first fast-food restaurant in Australia to accept the digital currency XEM.
“Cryptocurrencies are the future of trade. It is a fascinating concept that our clientele is already on board with, and we’re ready to stop watching from the sidelines,” says Agi.
“We’re giving our customers the freedom to pay with a currency of their choice, which is indicative of how we like to approach the customer experience at Burger Love.”
Founded by Bill Gates and Leonardo Dicaprio, the vegan company Beyond Meat has chosen Burger Love to launch its product in Australia in late February.
The burgers at Burger Love are artisan style, allowing customers the flexibility to choose their burger
ingredients. “They are all handmade from fresh ingredients. There is nothing frozen,” says Agi.
Ahead, the chain also plans expanding globally with master licensing agreements for three Asian countries and one in Europe. Its endeavours are being supported at official level from Trade Victoria.
BURGER BITES
• Not a typical franchise- rather a
‘branchise’
• Set up costs and fees very flexible and discussed with licensees on a case by case basis
• 3 stores and a food truck currently
operating
HELLO HARRY
When two franchise experts discovered the Hello Harry brand, they knew they had to buy it and be aggressive with franchising. The chain started on Queensland’s Sunshine Coast in 2014, with the first franchised store following the next year. The brand has since expanded across Australia.
Rob McCue says they bought the brand in February last year from the founders. “We could see they weren’t franchise people.”
Hello Harry likes to keep it simple with meats and burger patties made fresh in store and buns exclusively baked for the chain. The chain is also a big fan of shakes and craft beers.
“Unlike most of our competitors, we don’t just have cooks, we have chefs,” says McCue.
Not a fan of the cookie-cutter approach, he says he encourages his franchisees to have more of a say in how their store looks. While the same branding applies across stores, each location can have a different look and feel .
ith a target of openingW 11 stores in the next year, McCue says they will be halfway there by June. Expansion plans mainly focus in New South Wales but also embrace Queensland and South
All you need to be part of the global brand, says the franchisor, is a passion for burgers
and a passion for success.
Australia.
Hello Harry is known for its “Fat Bastard Challenge, which involves customers eating a double Fat Bastard burger with fries. If they can do this in less than eight minutes, their meal is free and they score a free cap. All details from the challenge are recorded and updated on a leaderboard.
“Sports teams come as part of a social exercise and they just love challenging each other. It’s lots of fun,” says McCue.
Hello Harry prides itself on being easy to run, and aims to launch every store for the best possible price. “For example, if Mary is opening a store in Parramatta we will help her obtain the best possible price to build equity and profit,” says McCue.
BURGER BITES
• Set up costs range from $230,000 to about $390,000 including $50,000 initial franchise fee
• Royalty: 6% of net sales
• Marketing levy: 4% of net sales • Franchise agreement terms are in line
with the lease terms
• 7 stores open, 7+ opening this year
CARL’S JR
With the stance that “bacon makes everything better”, Brad Sommers from Californian chain Carl’s Jr is enthusiastic about the quality meat the chain produces, and the healthy options for customers who prefer not to indulge.
“We really cater for everyone,” he says.
The fast-food chain is expanding aggressively in Australia, with locations in Bateau Bay, Brisbane Airport, Kilburn, Mount Barker and Redbank Plains.
“We want to be in every state in Australia. There is plenty of opportunity for potential franchisees,” says Sommers. The chain is actively seeking franchisees to be multi-location owner/operators across multiple territories in Australia. All you need to be part of the global brand, says the franchisor, is a passion for burgers and a passion for success.
The chain has a 75-year history, with Carl Karcher parlaying his hot-dog cart into a global franchise with 3800 restaurants.
Known for its “California cool persona” and handmade American classics, the chain’s promise is affordable premium-quality food.
“Our products are made fresh to order, and we offer chargrilled, premium-quality burgers made with 100 per cent Angus beef,” says Sommers.
Carl’s Jr not only offers drive-through options, but also proper restaurants with table service. Its freshly prepared burgers include classics such as the Portobello Mushroom thickburger and the Guacamole Bacon thickburger. There are also vegetarian options and healthy alternatives such as a lettuce bun.
BURGER BITES
• Investment cost varies according to food court, in-line or free-standing site.
• Franchise fee: territory reservation fee of US$10,000/franchise fee of US$36,300 paid when site approved • Royalty: 5% per month
• Advertising levy: currently a monthly
US$175 fee
• Length of term: typically 20 years for
standard license agreements
• 5 stores in Australia, more than 3,900
worldwide