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Hwy 55 Takes the Road to Expansion

Filed under Burger, Expansion, Q&A, Q&A

Hwy 55 is 25 years old and on the move. Well-established in its home territory of North Carolina, the concept is expanding through the Southeast. Founder and president Kenney Moore just signed a master franchise agreement with two existing Hwy 55 franchisees that calls for 300 of its retro-theme-diner restaurants to open in Texas over the next five years. Hwy 55 continues to feature a menu of Classic burgers that can be topped as diners desire plus Specialty Burgers, chicken cheesesteaks, and more. And then there’s the Five Five Challenge: a 55-oz., seven-patty monster that’s free if you finish it, fries and a 24-oz. drink in less than 30 minutes. BurgerBusiness.com spoke with Kenny Moore about Hwy 55.Hwy 55_Logo3

 

What has changed for Hwy 55 in 25 years?
We have evolved, just organically, through the years. And the “Better Burger” segment has gotten a lot more crowded since 1991. But I still feel we’re uniquely positioned. You have the fast feeders where you got to the counter with your tray, and your casual diners that give more service. We fall in-between. We’re full service in the vast majority of our restaurants and yet our pricing isn’t quite where casual dining is so we give a little more value, even better than the better burger guys who ask you to carry a tray. I don’t see that changing until it makes sense for us to do that.

You get people who jump into the segment but we’ve always believed in fresh, never frozen burgers. We’re not a Johnny come lately. We’ve seen a lot. I think we can keep [prospective franchisees] from stepping the same potholes we have over the years.

I like to think that having other people doing it and bringing attention to the importance of fresh product does nothing but benefit us all.

Have you changed more in marketing or menu?
Marketing wise we’ve started to grasp social media. That’s an exciting area for us. Bringing on some younger people—including my son, Andy—who understand social media better has helped us in that arena. Remember that 25 years ago it was just radio, TV and some mailers, so marketing has changed quite a bit.

On menu, our burger is the same since 1991 and I don’t intend to change that. We’ve always had a fresh product, never frozen and hand-pattied. It’s our burger.

Hwy55_CrinkeFriesOne change we’ve made though, just this month—and it might seem small—is we rolled out crinkle-cut fries. We were straight fries for 25 years. I know that sounds like a little thing.

Not at all. People take their fries seriously!
They sure do. I’ll tell you I had some sleepless nights worrying about how it would be received. We don’t do massive tests for a year in some location. We just kind roll with it. But the response has been very positive.

The downside of social media, of course, is that you’ll hear howling from some people no matter what you do or change.
Bingo. We used to tell managers that if you do a great job they’ll tell two people and if you do a bad job they’ll tell 10. Now that customer might be sitting in your restaurant telling 2,000 people on Facebook what they like or don’t. We’ve been around long enough that this is their store for a lot of people. I know some are going to ask, “Why did you change my fries?”

What’s the answer to that?
To be honest, I think everything on our menu is special. Everything is made fresh. We didn’t necessarily want to go with cutting our own fries but our fries were just OK. I never thought they were great; they were not bad, but not great. I think the product we introduced is great. Much better than what we had, and now I can feel good about our fries, too. It’s that simple.

You’ve also added the “Own It” program where customers are invited to suggest sandwich ideas, for which they get credit if their idea is used. Has that worked well for you?
It has. You’ll always have longtime customers who give you menu suggestion. With “Chopped” and all the other food shows have made people amateur Master Chefs, if you will. They’ll give us ideas.

If you’re trying to run a chain and keep things consistent and keep the menu size manageable, you have to say no. But we came up with the “Own It” program and said, “OK, we’ll put you on the menu for a month and you can tell your friends about it. We’ll promote it and put your picture on the window poster.” The only catch is that they have to use ingredients we have in-house. It’s been fun. We’ve had a couple that have done well [including The Charleston Chop: a fried chicken breast, chopped and smothered in John Boy & Billy’s Grillin’ Sauce and topped with melted provolone and pickles].

Hwy 55_ChalestonChp

It creates a kind of “secret menu” because those items don’t go on our menu full time. People come in and say “Gimme The Moose, and our people know that’s a chicken cheesesteak with bacon and ranch dressing. It gets customers involved, although some day we should do a YouTube video with some of the nutty suggestions we get.

And you still have the Five Five Challenge?
We do an eating contest at the Pickle Festival in Mt. Olive [N.C., where Hwy 55 is headquartered] where we bring pros in [to take the Challenge]. We have four pros, including Molly Schuyler. She’s 5’ 5” and 110 lbs. She’s our record holder. Last year at the Pickle Festival, she ate the 55-oz. burger, 6 oz. of fries and a 24-oz. drink in 2 minutes and 12 seconds [Note: On April 26, 2016, she set a new record of 1 minute and 53 seconds.]

No way.
It’s on YouTube [see the 2016 record here]. It’s freakish.Hwy 55_FiveFive Challenge

What’s next on the menu?
I’m not sure it isn’t too big, honestly. I like the direction we’re going where people can come in and make what they want. So I don’t see any new items coming in soon. We have something for health-conscious customers and something for people who want the biggest thing we have. And we have lots in-between. We’re in a good spot.

Not looking to add breakfast?
We actually gave breakfast a try. Honestly, it’s a low price-point segment, and most of our locations are at strip centers where people have to get out of their car, walk in and have a sit-down breakfast. Really, the drive-thru has killed that [daypart] because everyone’s in such a hurry.

We had a great breakfast menu. We made our biscuits from scratch and all, but there’s just so much you can do with eggs and bacon. It’s tough to differentiate yourself. The other thing is that our operators work hard. To have stress-free mornings before you open means something to them. And me.

How many locations are open now?
About 125. We have 15 more to open this year but that could be 20 or 25 by yearend. We’ve sold rights for more than 1,000 to be developed so next year could be a 50-60-opening year. I feel we’re in a good position to grow. We need to be sure we’re supporting these franchisees and master franchisees as we move forward.

Is the marketplace friendly? Is capital available for expansion?
It’s not where it was. Banks are a little tight; money is a little tight. But I don’t know that I’d want to grow any faster than we are. You can get sloppy and I don’t want that to happen.

How far afield are you franchising?
Well, Denmark and the Middle East and we’ve been in contact with some people in India who are interested as well. In the states we’re still in the Southeast right now, from Texas back to North Carolina.

Do you want to fill in the Southeast before you start popping up in Seattle and Los Angeles?
You have to be smart about expansion. I’d be lying if I told you I wouldn’t listen if someone came in and said he was ready to open 25 stores in California, but I’d have to back off. We have to support our people.

Do you worry about minimum-wage increases?
We hire a whole of 16- to 19-year-olds. My fear is a lot of those jobs will go away if the minimum goes to $15. It may take away some of our full service; we may do a modified version of full, which doesn’t thrill me one bit.

We are testing a couple of things that we could use if it were so drastic as doubling to $15 an hour. We’d have to be able to react quickly and I’ve assured our franchisees and master franchisees that we have plans. I hope a little sanity prevails.

But I’m pleased that it’s happening in a more localized way. It’s in Seattle, San Francisco and New York City and that’s fine because those markets can handle that better than Beulaville, N.C., can. I’d rather it be localized rather than national.