Posted: May 01, 2009
Small biz: Smashburger undaunted by crowded field
200 Smashburger franchises to open in next three to five yearsMike Taylor
Three years ago during an interview for a story on local burger wars, Good Times President and CEO Boyd Hoback described the Front Range to me as “one of the most saturated markets in the country.
He added, ”If you’ve got a really good mousetrap figured out, it’s a great market. If you’re coming in just to compete head-to-head, it’s a real tough market.”
I was reminded of Hoback’s “mousetrap” line recently when I heard an interview with the head of product development at the Victor company, the dominant mousetrap manufacturer for generations. Despite the fact the old spring-trap with the wood base does the job 88 percent of the time, this Victor executive said he receives hundreds of designs for a “better mousetrap,” often with elaborate designs. For example, one trap was designed to lure a mouse onto a dowel suspended over a bucket and drop the animal into a pool of antifreeze. Another featured a trap door that would spring shut when the mouse nibbled on the bait and drop a cyanide pill into a thimble-size pool of water. A gas chamber, essentially.
Clever designs. But not any better or as cheap as the trusty old spring-loaded trap.
I guess the world needs another burger concept about like it needs a better mousetrap. But the comparison only goes so far. I’m a burger lover, and I’m always up for testing a new challenger.
Denver-based Smashburger entered my radar field via a review some time back by Westword food writer Jason Sheehan. He described how smashing a ball of certified Angus beef flat against the grill locks in the juices and carmelizes the edges of the burger to create what he called an irresistible “meat candy.”
The Smashburger treatment
Enough said. Last month we arranged to capture the Smashburger process on video. While Regional Vice President Greg Creighton stood at the grill describing the cooking process to ColoradoBiz Editor Mike Cote, I talked to Smashburger Chairman Dave Prokupek about the fledgling chain, which launched about two years ago and now is up to 11 restaurants – nine in Colorado, one in Wichita and one in Houston.
Smashburger was created by the investment group Consumer Capital Partners, whose principals include Prokupek, Quizno’s co-founder and CEO Rick Schaden and longtime restaurant marketing executive Tom Ryan (Long John Silver’s, McDonald’s, Pizza Hut and Quizno’s). The group sold 200 Smashburger franchises across the country last year. Prokupek said about 17 of those franchisees will open restaurants this year and that a total of 200 will open in the next three to five years.
“We’re kind of on a path to get to 500 or 600 stores in the next five or six years,” Prokupek said. “Our goal is to be the No. 1 better-burger player in the United States.”
In Smashburger’s case, that means making the burgers to order and bringing them out to the table, and offering Haagen-Dazs ice cream shakes along with wine and craft beer.
Along with the beef-smashing cooking process that the chain is hanging its hat on, Prokupek says Smashburger intends to fit in the $8-average-burger price point, between what he said is McDonald’s $6 average and Applebee’s $12 average.
Regarding the impact of the recession, Prokupek, 47, said, “We’ve been pretty bearish on the economy overall. We’re getting about a third of our customers who are trading down from the Red Robins and the Chili’s and the Applebee’s.
“Our typical store does a little over $1.2 million, $1.3 million revenues a year,” he said. “About half of our people come at dinner, a pretty big win for us.”
I’m too much of an indiscriminant burger lover to be a truly effective critic — a good burger is to be savored, not analyzed, I think — but Smashburger’s crispy, carmelized edges and Angus tastiness are for real – up there with the Cherry Cricket in Cherry Creek and Crown Burger on South Colorado Boulevard and Iliff Avenue.
Prokupek says he agrees with Hoback about the competitiveness of the Front Range restaurant market, but he’s done his homework. “We do a burger index across the country,” he said. “We eat a lot of meat here on the Front Range. Denver skews high for burger eating.”
Higher than it skews for a better mousetrap, it’s safe to say.
Mike Taylor is the managing editor of ColoradoBiz. He writes about small-business money issues and how startups are launched. Email him at email@example.com.