Starting a Burger Joint
The hamburger is a classic part of Americana, the quintessential American meal. Perhaps more importantly than that, it represents a $73 billion industry in the United States1, so it's no surprise restaurant operators want to get their piece of that. Opening a restaurant can be challenging, but a burger restaurant can be 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 concept or take advantage of the branding already established by one of the many burger franchises known across the country.
Table of Contents
With more than 49,000 burger restaurants in the U.S.2, it is 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 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 allows you to partner with an existing burger concept to open a restaurant with a recognizable name and brand. The corporation usually assists with finding a location, setting up the business, 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|
|McDonald's||$45,000||4%||$989,000 - $2,200,000|
|Hardee's||$25,000 - $35,000||4%||$1,300,000 – $1,800,000|
|Jack in the Box||$50,000||5%||$1,300,000 – $2,400,000|
|Culver's||$55,000||4%||$1,400,000 – $3,700,000|
|Big Smoke Burger||$35,000||6%||$185,000 - $418,000|
|Fuddruckers||$50,000||5%||$740,000 - $1,500,000|
One of the most important aspects of any restaurant is its location. The building you buy, rent, or build can impact everything from how many people know your eatery exists to how many people you are physically able to fit in the space and serve. Some of the questions you may want to consider are:
- Brick and mortar or food truck? The recent rise of food trucks has given prospective foodservice operators an option beyond the traditional brick and mortar store. Start-up costs for a food truck are lower, but getting the licenses necessary to operate one can be next to impossible in some parts of the country. A brick and mortar location costs more to get started, but is usually easier to get licensed. A small location in a food court is another option to consider to help keep start-up costs low.
- 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. 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, but depending on the fluctuations of the real estate market, can leave you with a larger loss if your business flops. If the area's real estate market is booming, selling the property could also help you recoup some of your expenses.3
- Where are the people? In relation to your potential location, that is. How many people live or work within easy driving distance? Is the building easily visible from a busy street? How is the traffic flow? Will you have ample room for parking? The perfect building won't get you very far if the general public can't find it.
- How much space do you need? It is important to consider the space both in the kitchen and out in the dining area. You need to be sure that you can accommodate and serve the number of patrons you will need to turn a profit, and that the kitchen has room for all the commercial kitchen equipment you will need to prepare food in the necessary volume. According to Total Food Service4, most restaurants should have 40 percent of the building's total area dedicated to the kitchen, storage, and prep areas, and the remaining 60 percent used for seating and serving customers.
Licensing and Insurance
Before you can open a restaurant, you will need to research your local regulatory agencies and what licenses you need. These requirements will vary by location, but contacting the chamber of commerce and health department are good ways to figure out how to start a burger joint 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, as well as 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 will 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 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, as it helps cover medical bills that may arise from employee injuries. Most major insurance companies offer these and each can help tailor an insurance package to meet your specific needs.
Investing in the right commercial kitchen equipment is one of the most important parts of opening 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 things to keep in mind when comparing your options.
- Commercial refrigeration options include reach-in refrigerators, undercounter models, 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 will store at a 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, and provides a surface for assembling sandwiches.
- A commercial ice maker allows you to provide your customers with fresh, clean ice to cool their drinks. For self-serve, you can choose an 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 you have in mind for your burgers.
- A vegetable slicer can make cutting up fresh toppings such as tomatoes and onions for your burgers more efficient. A French fry cutter is a more specialized slicer that will enable you to serve freshly-cut French fries in the size and shape you choose.
- Find the right commercial fryer for your burger joint to cook French fries 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. These 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.
- Select your restaurant's dining room furniture carefully to balance comfort and aesthetics. Restaurant tables are sold either in one piece or with individual table bases and table tops to allow you to create the perfect setup. Select your seats from bar stools, chairs, and booths, or supply a mix to allow your customers to choose which they prefer. Also be sure to have some high chairs and booster seats on hand for your younger customers.
With so many burger franchises and independent restaurants already open, marketing is one of the most important aspects of opening 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.
The internet is a powerful marketing tool, and with so many people searching for restaurants online5, it is one you cannot afford to ignore. An optimized website to capture local searches and a strong social media presence can easily boost sales. When you first open, 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 allow you to send out coupons and promotions to incentivize your customers to return.
- "6 Burger Stats That Will Shock You". First We Feast. Accessed May 2016.
- "The State of the Burger Market, 2014". Burger Business. Accessed May 2016.
- "Should You Buy or Lease Your Restaurant Location?". All Business. Accessed May 2016.
- "How to Create a Restaurant Floor Plan". Total Food Service. Accessed May 2016.
- 64 Percent of Mobile Restaurant Searchers Convert. Search Engine Land. Accessed May 2016.