Fransmart Blog

Better Burgers Master Franchise Growth Strategy

Posted by Staff on May 23, 2011
Boardwalk Fresh Burgers & Fries Differentiates with Master Franchise Development Model to Attract Experienced Franchisees

The Better Burger market continues to enjoy explosive growth, and concepts like Boardwalk Fresh Burgers & Fries are offering unique investment opportunities and lucrative financial structures to break out from the “burger pack” and attract higher caliber franchisees.

 

Industry data authority Technomic recently published their 2011 Top 10 Fast Casual Chain Restaurant Report, with findings that fast-casual restaurant growth continues to outperform the rest of the industry. What was the fastest growing menu category for the 2011 Top 100 fast casual chains report? You guessed it. Better Burgers – up 16.1%.

 

Boardwalk, a rising star in the category known for it’s made to order, hand pattied burgers and fresh cut fries, is using the master franchise model as its primary growth vehicle. The Boardwalk master franchise opportunity has been met with wide interest from seasoned developers from brands like Baja Fresh, Dunkin Donuts, and Subway, and from industry vets including the former CEO of Caribou Coffee and former COO of Jersey Mike's.

 

The chain currently has 8 locations open, and over 250 new units in development across the US, many of them in master franchise territories.

 

Said Boardwalk Fresh Burgers & Fries founder Dave DiFerdinando, “We were looking for a way to differentiate our investment opportunity in the thriving Better Burgers segment.”

 

Master franchising is a unique growth strategy, not widely used by larger, more experienced brands. Why, you ask? For one, more master franchising requires that a franchisor share a significant cut of their franchise revenue with a master franchisee. This includes a 50/50 split of franchise fees and ongoing royalties. Larger brands are simply not willing to cut into their franchise profits. In return though, franchisors offering master franchise programs can benefit from partnership with higher caliber operating partners in selected markets. These “chosen few” already possess a proven track record of successful multi-unit ownership in a market, they have cultivated market-specific real estate knowledge, developed ample financial resources, and already have management teams in place.

 

More commonly though, unproven emerging brands will use master franchising as a rapid growth model. These brands are willing to give up franchise revenue and control in order to grow quickly. Oftentimes, these same brands are not adequately selective in their qualification process for master franchisees, overlooking key performance indicators like successful multi-unit development experience, sufficient capital reserves, real estate knowledge, and management expertise.

 

Company founder Dave DiFerdinando went on, “Master franchising can be a risky growth model if you aren’t extremely selective with your franchisee qualification process. The system is working for us, because we are targeting experienced developers. You entrust your brand to a developer covering a massive territory, so you have to be sure you are selecting the right partners.”

 

For franchisors employing a strict qualification process for master franchisees, the end-scenario is a win-win-win for franchisor, master franchisee, and the unit-level sub-franchisees. Unit level sub-franchisees enjoy the best of both the franchisor support resources as well as the resources of the local master development partner. Sub-franchisees receive twice the amount of support for the same fees and royalties of a typical franchise. In essence, the master franchisee is another layer of support helping to drive unit-level sales and success.

 

The Master Franchise Support Model:

 

Master Franchise Business and Support Model Diagram

 

Several now prominent chains have successfully used this growth vehicle in the early days of their development, including Subway, Quizno’s and Domino’s Pizza. As early master franchisees from those brands could tell you, the master franchise model can be quite lucrative. Master franchisees are given the opportunity to get in on the ground floor of a young business or segment. Typically, once a concept matures and develops wide brand recognition, the opportunities for master franchises fade away.

 

Boardwalk Fresh Burgers & Fries made a clear decision early on to employ the master franchise model. Boardwalk Fresh Burgers is the sister brand of Boardwalk Fries, a mature concept with over 30 years of brand recognition.

 

“Unlike emerging brands that use master franchising to gain traction, we already had widespread recognition with the Boardwalk brand, and a proven model for our concept. We wanted to really stand out from our Better Burger competitors with a unique investment opportunity. We wanted to offer experienced, qualified developers the chance to build something big with us and share in the financial rewards,” said DiFerdinando.

 

The master franchise growth model is working for Boardwalk. The chain intends to open over 25 additional new restaurants by the end of the year, and has development deals in place for over 250 units in 13 states with experienced developers.

 

One such ideal master franchise partner is Manu “Mike” Patel. Patel, a seasoned restaurant developer, purchased the master franchise rights for 40+ Boardwalk Fresh Burgers & Fries units in Delaware, New Jersey, and the Philadelphia metro area.

 

Patel, a veteran multi-unit restaurant owner with both Dunkin Donuts and Subway, had this to say, “I’ve been in the multi-unit restaurant business for twenty years, and had the chance to operate with the #1 franchise brand in the world. I currently own 6 Subway restaurants and have an additional 3 in development. For my next venture, I was looking for a stronger ROI than Subway multi-unit franchising could offer. At the end of the day, I was able to secure the master franchise rights for my Boardwalk market for the same cost of opening up a new Subway restaurant.”

 

Patel opened his first flagship Boardwalk location in Dover, DE, and has already sold his first sub-franchise deal. Patel has leases signed for 2 new locations, and plans to have 5 restaurants open in his territory by the end of the year.

 

Michael J. Coles, the former CEO of Caribou Coffee, and Tony Ratliff, an experienced multi-unit franchisee, bought the master franchise rights to develop 50+ Boardwalk Fresh Burgers & Fries in Georgia. The partners currently have 1 restaurant open and 1 under construction with additional developments underway. Boardwalk also has master franchise deals in place for Washington, DC, Virginia, North Carolina, Florida, and Oregon.

 

Lucky Patel, a multi-unit restaurant veteran with Baja Fresh Mexican Grill and Subway, purchased the master franchise rights to open 30 new Boardwalk Fresh Burgers & Fries restaurants in Oregon.

 

Said Lucky Patel, “I’ve been fortunate to grow profitable, multi-unit businesses with Baja Fresh and Subway. My Boardwalk master franchise though affords me the opportunity to take my career to the next level. Master franchising is the ideal wealth building model. It requires low overhead, and my up-front investment is less than if I built an additional restaurant myself. I’ve been in the restaurant industry for a long time, and while I enjoy serving customers every day in my multi-unit operations, I know I’m going enjoy to helping my Boardwalk sub-franchisees build their businesses even more.”

 

Franchise development for Boardwalk Fresh Burgers & Fries is being led by Fransmart, the franchise development company that spearheaded the Better Burger craze nearly a decade ago with a young brand named Five Guys Burgers & Fries.

 

Said Fransmart CEO Dan Rowe, “I’ve been working in and studying the Better Burger model for over a decade now. The numbers don’t lie. Better Burger brands are offering solid unit economics, and consumers can’t get enough. Boardwalk was looking for a way to grow with a select handful of seasoned restaurant developers that could help them grow large markets, versus a large number of individual or multi-unit franchisees. The master franchise growth model is working for Boardwalk, and its working for their franchisees.”

 

Learn more about master franchising on the Fransmart website, including a sample worksheet for the master franchise revenue model.

 

About Boardwalk Fresh Burgers & Fries

Based in Columbia, Maryland, Boardwalk Fresh Burgers and Fries is experiencing unprecedented growth. Boardwalk Fresh Burgers & Fries offers quality products to its customers with made to order, hand formed, fresh ground beef burgers and fresh-cut Boardwalk fries cooked in 100% peanut oil, along with other family favorites such as hot dogs, grilled cheese, grilled chicken sandwiches, salads, and veggie burgers. The New York Times ranked Boardwalk Fries on their baseball stadium culinary scorecard, and AOL Small Business listed Boardwalk Fresh Burgers & Fries in their 2009 “Next Big Chain” report.

 

Paired with its sister company, Boardwalk Fries, Boardwalk Fresh Burgers & Fries has 30 years of brand recognition. Keeping its inspiration of the ocean boardwalk theme, the concept provides a family-friendly atmosphere, and great food at great prices. Learn more about franchising with Boardwalk Fresh Burgers & Fries.

 

Master franchisee Mike Patel's Dover DE Boardwalk Fresh Burgers & Fries opening team is pictured below.

 

Boardwalk Fresh Burgers & Fries Dover Delaware

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