Restaurantdata’s 2017 Top 300 Burger Segment Report

Restaurantdata’s 2017 Top 300 Burger Segment Report

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In 2017, Restaurantdata.com (RD) created our first Top 250 list of major US concepts.  Of the entire Top 250, the top 50 account for over $200 Billion in annual volume.

In the Top 50, there are 9 burger concepts with almost $70 Billion in volume.  We have a special report on these burger concepts available.

We also have a special report on the 23 burger concepts in our Top 250.  The expanded list includes several fast growers.

Our RULC tracks concepts with 20 or more locations.  Chains are added and removed over time as their unit counts change.

Since 2012, there have been four chains added to our list of concepts with 20 or more locations.  Shake Shack, which went public, is the best known.  The other concepts are Burgerfi, Burgerville and Bareburger.

Jake’s Wayback Burgers has reorganized and is now called Wayback Burgers.

Champp’s, Cheeseburger in Paradise, Schoop’s Hamburgers and Twisters Burgers & Burritos have lost units and are no longer in our list of concepts with 20 or more locations.

Back Yard Burgers declined over 50% in the 5 year period.  Other major decliners included Cheeburger Cheeburger, Steak Escape and Good Times Burgers & Frozen Custard.

 

FAST GROWING CONCEPTS

We took a closer look at 3 fast growing burger concepts – Shake Shack, Freddy’s Frozen Custard & Steakburgers and Five Guys Burgers & Fries.  Each of these companies is in a different stage of growth.  Shake Shack jumped from 14 to 92 stores – a 557% five year growth rate.

Shake Shack

The Shake Shack grew by 557% in our 5 year review.  They now have 92 domestic stores open vs. 14 in 2012.  Shake Shack is a public company selling at a high multiple.  The stock market expects future growth will continue at a fast pace.

Shake Shack does not offer franchises in the US market and has no plans to franchise in the future.

Shake Shack has 33 locations in the Tri-State area of New York, Connecticut and New Jersey.  They have 12 locations in the DC/MD/VA area in Baltimore, Washington and suburbs.  All 8 Texas locations were opened since 2012.

 

Shake Shack has targeted larger metro areas for the most part.  They started in densely populated New York with very high average unit volumes.  As they expand into new markets, their AUV numbers have dropped steadily.  We estimate their current average unit volume is above $3,000,000.

 

Freddy’s Frozen Custard & Steakburgers

Another rapid growth concept in the Burger segment is Freddy’s Frozen Custard & Steakburgers.  Freddy’s has grown by 236% in the five year period from 2012 to 2017.  Their store count went from 74 to 249 during this period.

Freddy’s opened in Wichita in 2002 and began offering franchises in 2004.

Texas has the most Freddy’s locations.  Freddy’s nearly tripled their Texas locations growing from 15 to 43.  They rarely close a location.  In Texas, 41 of 43 stores are still in operation.

Freddy’s now has 28 stores in Kansas and 24 in Oklahoma vs. 2012 counts of 17 and 10 respectively.  More rapid growth was experienced in Arizona, Colorado, Missouri, North Carolina and Nebraska.  In these 5 states, they increased from 16 to 55 locations.

Freddy’s has entered into 16 new states since 2012.  These new territories account for 46 new stores.

 

Five Guys Burgers and Fries

Five Guys continue to growth at an above average rate.  They now have stores in every state except Alaska.  They have expanded in the California market growing from 59 locations to 134, in Florida growing from 100 to 121 locations and in New York growing from 64 to 86 locations.

Five Guys works with area developers (franchisee organizations) to maintain their fast growth.  This activity accounts for far less than 100 locations per year.  In the three year period from 2013 to 2015, Five Guys franchisees added 23 net new stores (from 851 year end 2012 to 874 year end 2015).  Company owned stores increased by 147 stores in the same period as Five Guys acquired 125 units from franchisees.  They opened 44 new company owned stores while closing 21 stores.  They sold one location to a franchisee.

Five Guys has over 400 company owned stores and they have been adding company owned stores over the past 5 years.  They have acquired many of the locations from franchises.

TOP300_BURGERS_PDF

 

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