Recently, B&B Franchise Group in Boca Raton, Fla., operator of the seven-unit Burger & Beer Joint chain announced that CEO Bill Herman and private equity firm Larsen MacColl Partners had acquired control. Plans are in place to open 15 locations over the four years, in the U.S. and internationally. BurgerBusiness.com spoke with Herman about the brand and its future.
How did you come to the burger business?
I’ve been in the restaurant business since 1991. I started with Shula’s Restaurant Group. I joined Burger & Beer Joint in 2013 and was brought on to expand the company and I recently became managing partner. Our equity partner and I purchased the company in January.
Tell me about the concept.
Burger & Beer Joint is different. Burgers aren’t unique in this country, especially quick-serve burgers: Five Guys, Smashburger and so on. We’re not quick service; we’re a full-service restaurant with a bar. That’s one difference. We’re rock ‘n roll themed and a sports restaurant. All our burgers are named after rock n’roll songs, for example the Hotel California, Mustang Sally, etc.. Everything has a theme to it.
And we have a “back in the day” image. We use pin-up girls for a bit of an old garage feel; we’ve got old gas station signage and motorcycles, so there’s a little bit of a hard rock feel to it.
I’m of an age to remember “Hotel California” well, but is yours a concept that also resonates with younger people, millennials?
It does. And we have a new design that will launch in our Washington, D.C., store that will open in the first quarter of 2017. That design will lend itself more to the new generation and the music will be different. Right now we have mostly classic rock music. We’ll still have that during the day and early evening, but then you’ll see more of mashup of old-school and new-school rock, where they remix older songs. Younger people love that. You’ll see more of a happy hour and late-night crowd.
Is that the format you’ll go with in future openings?
Yes. You’ll see that in other markets. Where we can do it, you’ll see an elevated stage behind the bar and there will be live music Thursday, Friday and Saturday. Some of our restaurants do live music now but it’s in a corner or on a patio or tucked in somewhere else. The new look has a true stage.
We’re a restaurant first, but you’ll see us be more bar focused and with a more energetic vibe. But don’t get me wrong: We still will appeal to families on weekdays and early weekends.
And you’ll stay with burgers as your menu focus?
Absolutely. That’s how we were born in 2009. We continue to grow the variety because not everyone wants a burger. So we have chicken and salads and fish, like ahi tuna tacos. If you have an office party of six people and one person doesn’t want a burger, we have to have a variety. We don’t want to lose a reservation for six because one person eats salads. As we’ve evolved we’ve realized we need to appeal to more health conscious eaters, so we have a veggie burger, a turkey burger and so forth.
On the other hand we continue to offer the [$125], 10-lb. “Motherburger” (above). Could someone really finish that? Not likely. No one ever has. It’s gigantic: it’s a 10-lb. beef patty but it’s really 15 pounds when you factor in the bread and the toppings. We have to cut it with a hacksaw at the table. So really it’s meant for a large group and it’s just a fun, cool thing. When one comes out of the kitchen, the kitchen staff come out banging on pans.
You’re expanding but real estate costs can be a challenge in many markets. How are you handling that?
You want to have a strong location but a lot of people make the mistake of looking for a low-rent spot. Most times you get what you pay for and end up with a B or a C site and you wonder why sales aren’t strong.
For us, our philosophy is to find strong locations. If we have to pay to be in a location, we do have to pay. Certainly we won’t do something so out of the realm financially, but it’s important to us to find strong locations. If you can shoot for a rent factor of 8% to 10% or less, you’re in good shape. When we sign a lease we’re cognizant of the sales we’ll need to hit to that number.
There are a lot of operations looking for good locations.
Correct. There’s a lot of competition; you have to move fast. We’re privately held so it’s easy for us to say yes or no quickly. We’ve shot down locations we didn’t feel were strong enough. But the problem is you’ve got to have patience. As you say, there are a lot of people looking, but you have to be careful not to lose your patience and settle for something less. It’s easy to do when you’re trying to expand.
What about other fixed costs: food costs, labor costs? How are you meeting those challenges?
We have really strong vendor contracts with our broadline distributors and we’re aggressive about keeping food costs in line. But it starts with having strong relationships with vendors. They want to grow with you.
We have really good operations people who are going to stores and looking for waste and all. You need a strong kitchen manager and strong operations people to keep things in check. And it’s the same for labor costs.
You’re seeing different wage mandates in various markets. How much does that complicate expansion?
It obviously does make it a little more complex, but we have to make sure we never let it affect our level of service. It’s all about watching your costs. But you can’t be a growing brand and then cut back on your service because of higher wages.
We’re going to save where we can save, and the best way to do that is to monitor our sales on an hourly basis, know when peak and off-peak hours are, and schedule accordingly.
How much expansion will via franchised agreements?
The majority will be franchised stores, but we’ll open a few corporate stores over the next couple of years. That’s important. We’re a South Florida-based company so we want our company stores to be in Florida. We’re aggressively looking for opportunities here.
Where else are you looking?
We have new [development] partner that we’ll announce soon. But most of our substantial growth in coming years will be in the Northeast and Southeast. That doesn’t mean we won’t be on the West Coast, but there would have to be enough restaurants to have a good infrastructure there. We wouldn’t do a one-off just to be in Los Angeles.
Many burger chains are reporting a softness in the marketplace, with consumers spending less. Have you seen it, and does it concern you?
In some markets, yes, we have. But for us, we’re not concerned. The saturation is coming from quick service; we don’t see it in full service. For us, if we find a great location, we believe in our brand and believe people will continue to support us. We think sales will be strong as long as we execute.