Starting a Burger Joint

The hamburger is a classic part of Americana – the quintessential American meal. Perhaps more importantly than that, it represents a $127 billion industry in the United States,¹ so it's no surprise restaurant operators want in. Opening a burger restaurant can be challenging, but it's also profitable if executed properly. This guide will walk you through the basics of how to start a burger joint, whether you want to establish your own unique concept or take advantage of the branding already established by one of the many burger franchises known across the country.

Burger Joint Business Model
Real Estate Options for Your Burger Business
Licensing and Insurance for Your Burger Restaurant
Burger Restaurant Equipment
Marketing Your Burger Business

Burger Joint Business Model

With more than 49,000 burger restaurants in the U.S.,² it's important to plan ahead to decide what your business model will be and what will set you apart. Take the time to get to know your local competition and consider what you can offer that those eateries don't. For example, if your local fast food market is saturated, you might be successful offering gourmet burgers or focusing on organic or locally sourced ingredients. Writing a detailed business plan for your burger restaurant can help you procure funding and prevent potential problems before they arise.

Taking advantage of a business model that's already been established by franchising is another option. Franchising enables you to partner with an existing concept to open a burger joint with a recognizable name and brand. The corporation typically assists with finding a location, setting up the business, designing the restaurant, securing suppliers, training employees, and advertising in exchange for a franchising fee and ongoing royalty payments, which are usually calculated as a percentage of sales.

Burger Restaurant Franchising Costs
Franchise	Franchising Fee	Royalty Payments	Initial Investment	Franchise Term
McDonald's	$45,000	4%	$1,200,000 - $2,300,000	20 years
Hardee's	$25,000 - $35,000	4%	$1,500,000 - $2,200,000	20 years
Jack in the Box	$50,000	5%	$1,650,000 - $2,630,000	20 years
Culver's	$55,000	4%	$2,400,000 - $5,400,000	15 years
Big Smoke Burger	$35,000	6%	$185,000 - $418,000	10 years
Fuddruckers	$35,000	5%	$500,000 - $1,560,000	20 years

Although there are many benefits to becoming a franchise owner or operator, there are also restrictions. Many franchisors charge additional fees for rent, advertising, technology and software, or other costs. Some franchisors also require franchisees to purchase supplies, ingredients, and equipment from a specific supplier, even if the franchisee can get a lower price elsewhere. There also may be restrictions on when and to whom you can sell your franchise, as well as restrictions on franchise term renewals and renewal fees.

Most franchisors offer this information up front, so always be sure to read all documentation thoroughly and carefully review any franchise contracts prior to signing them.

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Real Estate Options for Your Burger Business

One of the most important aspects of opening a burger restaurant is its location. The building you buy, rent, or build can impact everything from when your busiest hours take place to how many people you're physically able to fit in the space and serve. Here are some aspects you'll need to consider when establishing a budget and business plan:

Brick and mortar or food truck?

The continued popularity of food trucks has given prospective foodservice operators an option beyond the traditional brick-and-mortar store. Unlike a conventional eatery, a food truck can easily be relocated to follow evolving consumer habits and traffic patterns. Starting a food truck can come with lower upfront costs, but sometimes getting the licenses necessary to operate one can be difficult, especially in cities with restrictive laws. A brick-and-mortar location will cost more to open, but the licensing and operating requirements are usually less complicated.

A small location in a strip mall can serve as a convenient, middle-of-the-road option for restaurateurs looking to keep start-up costs low without running afoul of potentially convoluted food truck regulations.

Lease or purchase?

This question may be largely decided by the capital you have to work with as leasing a building or food truck requires a much smaller upfront investment than purchasing one. However, when leasing a location, you will generally be limited in what alterations you can make to the building, property, or truck. Buying a truck or building outright gives you much more flexibility in the changes you can make. Depending on the fluctuations of the real estate market, however, it can leave you with a larger loss if your business flops. If the area's real estate market is booming, on the other hand, selling the property could also help you recoup some of your expenses.³

Where are the people?

In relation to your burger restaurant's potential location, that is. Consider the following questions:

How many people live or work within a reasonable driving distance?
Is the building visible from a busy street?
How is the traffic flow? Will you have ample room for parking?
Does it have a drive through, and, if not, is there space to build one?

The perfect building won't get you very far if the general public can't find or easily access it.

How much space do you need?

Ensure that your front-of-house space can accommodate and serve the number of patrons necessary to turn a profit and that the kitchen has room for all the commercial kitchen equipment you will need to prepare food. According to Total Food Service,⁴ most restaurants should have 40 percent of the building's total area dedicated to the kitchen, storage, and prep areas, while the remaining 60 percent should be used for seating and serving customers.

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Licensing and Insurance for Your Burger Restaurant

Before you can open a burger joint, you'll need to research your local regulatory agencies and what licenses you need. These requirements will vary by location, but contacting the chamber of commerce, small business association, and health department are good ways to figure out how to start a burger business while staying on the right side of the law. You will generally need a business license, which legally allows you to make sales and collect sales tax, and a food handling certification, which may require you to attend a class on food safety.

As far as the facility is concerned, you will need permits for construction and an inspection from the health department before you can serve any food. Some areas also require an inspection by the fire commissioner, who will certify your property for a certain number of occupants. If you'll display signs outside, you may need a sign permit, and if you plan on serving alcohol, get started early on getting your liquor license.

Just as important as licensing is finding the right insurance for your burger business. Property insurance helps protect your building and surrounding property, providing coverage for fire, hail, or accidental damage. This type of policy can also be extended to cover expensive commercial kitchen equipment, so you'll be able to replace pieces damaged under covered circumstances.

Liability insurance is a must-have as it covers legal fees and any damages that may be awarded as a result of a legal action against your business from any accidents or injuries. Worker's compensation insurance can provide peace of mind to both you and your employees because it helps cover medical bills that may arise from employee injuries. Most major insurance companies offer these policies, and each can help tailor an insurance package to meet your specific needs.

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Burger Joint Equipment

Investing in the right commercial kitchen equipment is a vital step when planning how to open a burger joint. How you outfit your kitchen will determine its workflow and production capacity, and certain equipment types will even influence how the food tastes. Below are some of the pieces of equipment you will likely need and some considerations to keep in mind when planning how to open a burger restaurant.

Commercial refrigeration options include reach-in refrigerators, undercounter refrigerators, and walk-in coolers. Commercial freezers are available in the same formats, with the added option of chest freezers. The space you have to work with and the amount of food you'll store at one time will determine the type of refrigeration you need. For assembling burgers, you may also wish to invest in a prep table, which keeps toppings and other ingredients cold until they are needed while providing a surface for assembling sandwiches.

A commercial ice maker enables you to provide your customers with fresh, clean ice to cool their drinks. For self-service, you can choose a soda and ice dispenser, but you may prefer an ice machine head and bin or an undercounter ice maker if your servers will prepare drinks.

Commercial grills include charbroilers, griddles, and outdoor grills. Charbroilers and griddles may be electric or gas powered, and outdoor grills are heated by charcoal or gas. Finding the right fit for your restaurant can help you achieve the flavor and appearance you have in mind for your burgers.

Using a vegetable slicer can make cutting up fresh burger toppings more efficient, and a meat and cheese slicer makes it simple to slice cheese and thick-cut bacon. A french fry cutter is a more specialized cutting tool that will enable you to serve freshly cut french fries in the size and shape you choose.

Find the right commercial fryer to cook french fries, onion rings, and other menu items to crispy perfection. These are available in countertop and floor models that can be powered by electricity or gas.

A commercial dishwasher makes cleaning and sanitizing dishes quick and easy and ensures you can meet all health codes regarding dishwashing, and a three-compartment sink comes in handy for pots and pans. Both these options sanitize dishes using either chemicals or high-temperature water. Tall door-type warewashers are available for high-volume use, and undercounter dishwashers can provide a solution in areas where space is limited.

A hamburger press can make prepping burgers quick and easy. These are available in models that prep patties of varying sizes, and some are adjustable. If you're serving smashed burgers, steak weights help ensure uniform patties with every order. If you grind your own beef, a meat grinder can streamline the process, and of course, you need hamburger turners to flip hot patties and move them from the grill to a bun.

When planning how to start a burger business, it's important to carefully select indoor and outdoor furniture to balance comfort and aesthetics as patrons dine. Restaurant tables are sold either in one piece or with individual table bases and table tops to enable you to create the perfect setup. Select your seating options from bar stools, chairs, and booths, or supply a mix so your customers can choose which they prefer. Also be sure to have some high chairs and booster seats on hand for your younger customers.

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Marketing Your Burger Business

With so many burger franchises and independent restaurants already open, marketing is one of the most important aspects of starting a burger joint. If you decide to open a franchised location, the company will likely assist you with marketing and provide promotional packages and support. However, if you open your own concept, you will have to get the word out on your own. Establishing a brand identity can help your customers remember you, so it's important to have a cohesive look throughout your restaurant and any advertising materials. You may want to consult with a local designer to finalize your theme, decor, and signage.

The internet is a powerful marketing tool, and with so many people searching for restaurants online,⁵ it's one you can't afford to ignore. An optimized website to capture local searches and a strong social media presence can easily boost sales. When you first open a burger joint, you can create a local press release, run grand opening specials to draw in potential customers, and even invite local food bloggers to come try a free meal in exchange for a review. Of course, you need those initial customers to come back for more. Starting a text or email club or creating a loyalty program can enable you to send out coupons and promotions to incentivize your customers to return.

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