A whopper of a burger battle
Watch your back, Ronald McDonald. Somebody might be gaining on you.
A vanguard of new fast-food chains is testing the Bay State’s appetite for burger alternatives.
While the industry’s big three of McDonald’s, Burger King and Wendy’s continue to dominate the fast-food burger segment, entrepreneurs see potential for start-up hamburger chains to take business both from the industry leaders and the struggling casual dining segment.
“People enjoy a really good burger, especially right now with everything being so expensive,” said Sean Olson, who has an agreement to open 11 Five Guys Burgers and Fries outlets in Norfolk County.
Fast-growing Five Guys arrives in Massachusetts next week with the opening of Olson’s first restaurant in Dedham, with locations in Foxboro and Dartmouth to follow.
Colorado-based chain Red Robin Gourmet Burgers opened its fifth Bay State restaurant last month at Patriot Place in Foxboro as part of a 43-store nationwide expansion this year.
Wild Willy’s Burgers opened its sixth New England location, in Needham, last month, and start-up UBurger will open its second Boston restaurant in September.
The big three comprised 73.3 percent of the nation’s fast-service burger segment in 2007, up from 70 percent the previous year, according to Chicago-based restaurant consultancy Technomic.
Although McDonald’s enjoyed a turnaround in 2007, fueled partially by its new salads and healthier menu items, the big three have limited potential for domestic growth, said Darren Tristano, an executive vice president at Technomic.
“The opportunity (in the U.S.) is in the gourmet burger segment with different flavors, and the miniburger trend that has evolved in full-service restaurants,” Tristano said.
Many of the next-generation chains embrace simplicity, putting burgers at the center of the menu.
A visit to an In-N-Out Burger in California was a revelation to Spiro Kouvlis and Nick Kesaris, former owners of the Clam Box in Quincy.
In-N-Out’s back-to-basics menu of never-frozen burgers and hand-cut fries provided the template for the UBurger restaurant they opened late in 2006 in Kenmore Square.
“We thought something like this is a dream menu: just burgers and fries,” Kouvlis said. “It’s easy to keep it consistent.”
The response in the neighborhood near Boston University has exceeded the pair’s expectations, with sales averaging $20,000 a week during the summer and up to $40,000 when school is in session.
Encouraged by the original location’s performance, the pair will open a second UBurger in September at 1022 Commonwealth Ave.
Five Guys Burgers and Fries makes its Massachusetts debut on Monday when its first local restaurant opens at the Dedham Mall.
Sean Olson and his brother Nels have an agreement to open 11 stores in Norfolk County, including the next location in September at Patriot Place in Foxboro.
“People say the only thing they compare it to is the In-N-Out Burger,” said Olson, who also owns Natick catering company Uptown Gourmet.
Lorton, Va.-based Five Guys has experienced explosive growth in recent years through franchising, going from seven stores in 2003 to nearly 250 today.
Like UBurger, Five Guys’ menu features hand-cut fries and never-frozen burgers. Employees hand out boxes of peanuts to customers waiting in line. Burgers are made out of 80-percent lean chuck, which is ground twice for a more tender patty. Fifteen toppings, most of them free, let diners customize their orders.
Burgers cost about $4, with average meal tickets approaching $10. It’s a niche that could appeal to diners shying away from casual dining chains in the economic downturn.
“People want to find something that’s good but not expensive, and a good burger fits perfectly there,” Olson said.
Another Five Guys franchisee, Richard Valarioti, will open a 60-seat restaurant in October in Dartmouth.
Valarioti, who has the Plymouth and Bristol County franchise agreement, also is scouting sites in Easton, Hingham, New Bedford and Plymouth with the goal of opening a second restaurant before the end of the year and a third location next spring.
Wild Willie’s Burgers opened its second Massachusetts location two weeks ago in Needham. Lesley Seder, one of the owners, said the 118-seat restaurant strives for a family atmosphere. Restaurants have a Wild West-themed interior, and the Needham location does not serve alcohol. The restaurant operates under a licensing agreement with the parent company in York, Maine.
“People just seem to be into burgers now,” Seder said. “We have chicken and fish, but everybody is beginning to reach out to meat a little bit and everybody loves burgers.”
The biggest player to enter the market recently is publicly-traded Red Robin Gourmet Burgers Inc., which had revenues of $763.4 million in 2007. Greenwood Village, Colo.-based Red Robin opened its newest Massachusetts location last month at Patriot Place in Foxboro. It also has restaurants in Plymouth’s Colony Place, Wareham Crossing and Millbury.
A step up in price, Red Robin offers a dozen burger entrees priced at about $10, with toppings such as balsamic-marinated tomatoes, guacamole and grilled pineapple.
Red Robin falls into the casual dining segment with table service and a full drink menu, Tristano said. But it distinguishes itself from competitors with family-friendly elements including birthday parties and prize giveaways, Tristano said.
“That is a very different environment than an Applebee’s or Chili’s,” he said.
During a May 20 conference call, Red Robin executives said they will open up to 32 company-owned restaurants and 11 franchised locations during 2008. The company does not provide market-by-market breakdowns of its development plans, a spokeswoman said, and no other Massachusetts locations have been announced.
One high-profile national chain is holding off on a Massachusetts expansion – for now.
Oklahoma City-based Sonic Drive-In has been creeping into the Northeast with two stores open in New Jersey and negotiations under way with franchisees in New York and Connecticut.
“We don’t have plans to develop in (the rest of) New England, but we’re eventually getting there,” spokeswoman Tracey Beeker said.
Steve Adams may be reached email@example.com.
Founded: 1969 in Seattle
Headquarters: Greenwood Village, Colo.
Mass. locations: Patriot Place, Foxboro; Holyoke; Millbury; Colony Place, Plymouth; Wareham Crossing
Founded: 2006 in Boston
Locations: 636 Beacon St., Kenmore Square; 1022 Commonwealth Ave. (opens September)
Five Guys Burgers & Fries
Founded: 1986 in Alexandria, Va.
Headquarters: Lorton, Va.
Mass. locations: Dedham Mall; Patriot Place, Foxboro (opens Sept.); Dartmouth (late 2008)
Wild Willy's Burgers
Founded: 2001 in York, Maine
Headquarters: York, Maine
Mass. locations: Needham; Watertown; Worcester