Burger Franchise Review with Juicy Burger

Introduction

Patrick: Hey, you have Patrick Findaro here, co-founder at Vetted Biz. At Vetted Biz, we help you find, vet, and buy a franchise or a business for sale across the United States. Really excited to have on Nick Walpert. Nick is an accomplished entrepreneur. He’s worked at many of the largest food franchise brands. He developed Juicy Burger, which he’s the founder and CEO of, over 40 years ago. Nick is going to talk all about the food and beverage space, how Juicy Burgers is uniquely positioned in the food and beverage arena compared to other franchises, how Juicy Burgers has adapted given the current environment we are in with COVID-19, as well as talk about second-generation opportunities.

So basically a second-generation store would be a franchise location that already had some other type of business there. Maybe it was another pizza brand or another hamburger brand, and now there’s an opportunity to…it’s closed and there’s an opportunity to take over the space. And with minimal work, just really the signage, equipment, some tables and chairs, you could open up a franchise such as Juicy Burgers at nearly half the cost.

So again, really excited to have on Nick Walpert. He’s the CEO and founder of Juicy Burgers. Juicy Burgers has been operating for over 40 years. That was when it was founded. And there’s all sorts of franchisees and licensees operating across the United States. So I’m going to go ahead and add on Nick. And if you have any questions during this live stream, just please enter it into the comment box and we’ll try to respond during this live stream. If you’re enjoying the live stream, share it, like it, and subscribe to our YouTube channel at Vetted Biz. Nick, you’re on. Thanks so much for joining today.

Juicy Burger’s story

Nick: Thank you, Patrick. It’s my pleasure to be here. I’m very happy to talk about Juicy Burgers, the brand, and our exciting journey, as you mentioned, over the last 40 years. I started the company back in 1978 and there was a need for premium quality burgers, wings, and we also serve beer and wine. But the idea was that it’s a simple concept, people are always going to eat burgers. It’s the number one food here in America for takeout. And we have a concept that just has a great value.

We use Angus premium quality beef. Our burgers are third-pound, half-pound size, and so they’re larger. And you can make the burger many different ways, it’s a custom build too. Customers get to order what they like on those. And we have multiple toppings, premium toppings as well as free toppings. We have a very good size appetizer menu of cheese curds, French fries, all kinds of unique items, pickle spears, fried, etc. And then we have a little bit of dessert and, of course, beer and wine.

The atmosphere in the Juicy Burgers is really casual and relaxed. It’s catered to families and really anybody, from 3 to 80, basically.

Everyone loves our food. And that’s one of the things that has really carried us over the decades is the great quality food, consistent execution and great service. We have TVs in the store and the restaurants so people can watch information and also games and things like that. So it’s kind of a fun place to come to. And so even though the concept is 40 years-plus, I only began franchising it a few years ago, back in 2017. And so that’s why we have a combination of licensed and franchise locations. Right now, we’re just strictly focused on franchising. And my personal background, 20 years ago, I was the franchise for Dunkin Donuts, Las Vegas. I opened the market.

Patrick: That’s right. you mentioned that.

Nick: Yes. We opened over 46 locations. I’m happy to say that in that time I broke all the records in the history of Dunkin Donuts. We did over $200,000 in sales in one day of donuts and coffee, which is unbelievable. And so we ended up opening locations all over Las Vegas and then sold the business in 2002 and Juicy Burgers still, you know, wasn’t being franchised until 6 years later when I got to 2017. But before that, I’ve had career success in casual and quick-serve. I was a regional vice president for Denny’s Restaurants for the Western U.S., which is the Pacific Rim to Hawaii, and that was really exciting.

Prior to that, I was a regional director for Haagen-Dazs Ice Cream, North America. And also I had donut experience before. My earlier…Denny’s actually owned Winchell’s Donuts. And I was running Winchell’s Donuts Corporation, which is primarily based in the West, of course. And I’m from Southern California, from San Diego specifically. So I pretty much spent most of my time in the Western states, but I’ve traveled the world and the country promoting Juicy Burgers. And I’m very happy to bring it to the table.

Patrick: There was a company…was it a beer type concept that you were an executive? I believe it was like a publicly-traded company, right, pretty…

Nick: Yeah. I’m a co-founder of Pyramid Beer out of Seattle, Washington. That was in the late ’90s, and we essentially acquired that company. Its original name was Hart Brewing. Acquired the company and found out that the number one selling beer was Pyramid hefeweizen. And so we changed the name of the company to Pyramid, and went public. It was about a $50 million company, very successful. I ended up opening about 18 casual dining restaurants with…you know, seats were 500 to 800 seats, big locations, you know, 10,000, 12,000-square-foot restaurants. So very successful.

And then we ended up selling the company to North American Brewing, which is the largest beer company in the world. And of course, they wanted our brand and our shelves, channels in the grocery stores. We sold bottled beers in the stores. We had over 20 styles of beer, and we’re the original craft beer company. And of course, you know, you see what’s happened with craft beer in general. So that’s the reason I brought craft beer into Juicy Burgers because I have a passion for the beer as well. Although we don’t manufacture the beer, in my old company, Pyramid, we made the beer on-premises in the restaurant. So it was pretty exciting.

The burger is the cornerstone in the United States

Patrick: So, you know, you have so much experience, donuts, beer, and now back to burgers. Why burgers again?

Nick: Well, burgers is the number one food. Really, people love two things in America, burgers and pizza. And if you’ve got a great burger like Juicy Burgers and we’ve got, I call it a premium gourmet burger, it’s just got that great family home-style cooking taste, very flavorful. The idea is that the customer can make it their way. And so we have the standard juicy burger. You know, we have unique burgers like bacon avocado, hangover burger, New Mexico burger, Santa Fe chicken sandwich.

We have different things that people like, their favorites, but we keep the menu limited. We don’t want it too big because, in a quick-serve or QSR environment, you want the customers to make decisions a little faster to move the queue and help serve more customers during the peak periods for lunch and dinner.

So basically, people love burgers.

Patrick: Yeah. Burgers, beer, wings.

Nick: There you go.

Patrick: What good American doesn’t like those three?

Nick: Exactly, exactly. And our wings have really been picking up traction. People love our Juicy Burgers wings and, you know, they come back. It’s something a little different. Of course, you’re not going to eat hamburgers every day. You can come back to Juicy Burgers and have wings and have other things. And in addition to our appetizers, we have quite a bit of a variety in appetizers as well.

Why is it better to franchise Juicy Burger?

Patrick: And tell me, like, how is it simpler to run a Juicy Burger compared to other food franchises? How do you keep it simple for the franchisee?

Nick: Well, that’s one of the beauties behind the franchise is that I wanted to create a concept that anybody could own and operate. Keep it simple. Everything comes through a national distributor. It’s all been specked. It’s all prior proprietary products and everything comes made. The only thing you have to do in the back is really cut tomatoes. The lettuce comes pre-washed and pre-cut. The pickles are precut.

All the produce that you would have for toppings, onions, avocados come in fresh, everything is ready to go. So you just kind of put it on the line and build the burger as the customer requests it. There’s not a lot of prep, that eliminates labor in the back to create, you know, the product, and really, everything is on the line. So on the cooks’ line, you have everything there. You’re grilling the burgers from the grill and everything is stocked, ready to go, without a lot of prep.

And then the system itself, operationally speaking, we use a POS system that is very simple and very user-friendly, intuitive. We can train employees literally in 10 minutes to use the register. It’s very visual. So you just touch buttons and order. The transaction process is streamlined and we’re able to, you know, serve those customers in literally about five minutes so they get their order and it’s fast and efficient. So the systems and operation flows behind the counter is well established and set up to be very simple for anybody to run.

Patrick: And how flexible is it because…I mean, obviously, cuisine is a little different in the Pacific Northwest compared to Miami where it’s basically 60%, 70% Latino population. How flexible is it in terms of the menu items? And does the franchisee have feedback in terms of what items they could include?

Nick: Yes, absolutely. We do allow that. We allow our franchisees to bring ideas to the table related to the concept of products. Now, we have a core menu of items, which of course, I’ve mentioned is the burgers and wings and appetizers, but we’re very open and flexible to allow franchisees to bring in a product that might be specific to the region.

We’ve done this in other markets. We’re adding a Euro burger or a Hispanic burger or anything unique that might be a very popular sell. So we call that a featured product or featured menu item. We allow the franchisee to try it out and if the sales are there, then we’re going to back you. And if the product is something that is in high demand, what we’ll do is add it to the menu as a regular core menu item if it’s something that customers want.

How scalable is Juicy Burger

Patrick: That’s great. And tell me, like, how scalable is a business? Like, do you have franchisees that have multiple locations?

Nick: Yes, we do. We have both single and multi-unit owners. Currently, I have an owner in Miami who has a five-unit deal. We’ve got two stores that have been built, one’s open and the next one’s opening next month.

Patrick: Yeah. I saw the Doral location. It’s beautiful.

Nick: Yeah, Doral is doing very good. And the second one will be in West Kendall. And the Florida market is a great market in general. We’re looking to grow that state actually in many ways, Central and even Northern Florida. But it’s very scalable as a concept. It doesn’t require, you know, a million dollars to get into like a lot of franchises do. The timing right now is a little advantageous in terms of second-generation spaces because, unfortunately, there are other concepts that couldn’t make it through the hard part of the COVID-19 period. And so real estate has become available, which when we say second-generation space, we’re talking about a store that already has a hood, you know, has a grease trap.

Patrick: For those that are not familiar with hood, grease trap, or even really a food restaurant, like, could you just explain a little bit about the items and why it’s pretty costly to get one installed and inspected and all that?

Nick: Yes, absolutely. So one of the significant costs when getting a restaurant is the hood system, which is the exhaust above the cooking equipment that exhausts and vents the air out of the kitchen. So that hood system is sitting on the roof. And then in the restaurant, there is a…usually, it’s an 8-foot or 10-foot hood system. It’s all stainless steel. That is one of the key components of the business, as well as a fire Ansul system that’s connected to the hood system. And so this is your exhaust mechanism in the restaurant.

The grease trap is important as well because, because we are cooking, all health departments and counties will want a filtration concept, which we refer to as a grease trap. And it essentially traps the grease before it goes into the sewer line. And that’s an underground grease trap that goes in. So those two components are a major cost to the restaurant. So if you can get a second-generation space that already has those two things, you’ve saved yourself thousands of dollars. For instance, a grease trap by itself could cost you up to $50,000. A hood system can cost you up to $100,000. So you’ve already saved $150,000 roughly right there if you already have a restaurant that’s built out.

The key to the best space for your franchise

Patrick: That’s huge. And how do you know about finding space? Does the prospective franchisee have to come to you, Nick, “Hey, you know, I’m thinking about Juicy Burger for this location,” or do you help them find a space? How does that process work?

Nick: Sure. Well, we work with the franchisee in every way to identify the location. We have a partnership with CBRE Commercial, nationally.

 Patrick: Oh, yeah. I used them.

Nick: Yes. And they represent Juicy Burgers from coast to coast. They are one of the largest, if not the largest commercial real estate brokers in the country. And they bring us information on locations even before they’re even built or developed. So we’re always on top of what are the best locations.

Then we have a matrix of parameters that we look for when we are identifying a potential Juicy Burger location. We’re looking for proper signage, parking, access for vehicles, pedestrians. Also, what the demographics are in the area in terms of financially, economically, and who are the co-tenants, and what are the activities in that area that will bring the customer counts to Juicy Burger? So we have a multiple list of things that we look for and to approve that location. Then with the franchisee, we’ll sit down and talk about, hey, here’s the top three locations, and we’ll go visit them and collaborate and decide what is the best location for that franchisee.

Patrick: And I know you’re very hands-on. Like, when we first met by the Doral location in Florida, not so far from our office here in Miami Beach…I think you’ve gone out a few times, right, to Florida to help to support the franchisee?

Nick: Oh yeah. Well, I’ve gone out probably dozens of times. I am very hands-on. And the reason is, is that I love this brand. I love Juicy Burgers. I like to be very involved to be successful for my owners and myself as the brand. And I just enjoy the interaction with the public, and people love our concept and our food, and I really enjoy being out there and being hands-on and involved with each location as much as possible.

The type of franchisee who is most successful with Juicy Burgers

Patrick: What’s your ideal franchisee? What are you looking for and what is the type of franchisee that has the most success with the Juicy Burgers?

Nick: That’s a great question. So one of the things I’m looking for in a franchisee…and by the way, you don’t need restaurant experience to be in this concept. Because as I mentioned earlier, it is such a simple operation and simple operation in terms of how we do everything.

And we train everyone and we help you hire employees and train them, and we stay there to help you execute and make it run smoothly.

But what we’re looking for in a franchisee is someone who has the enthusiasm and the excitement, someone that obviously can get excited about our channel in the food market, which is the burger channel. Our niche is very good. We don’t compete with companies like Burger King, McDonald’s, and Wendy’s. They are really a fast food concept and the food quality is good, but it’s not great. And so I tell people, you know, they take their kids to McDonald’s, but the food quality is of a higher grade with Angus beef and a three-eighths-inch French fries and higher quality food.

Patrick: You definitely have high quality.

Nick: Yeah. High quality. And the fact that the customer gets it fresh and they get it the way they order it custom, custom and fresh. So really, the franchisee, we just want someone that’s excited about this, is really committed to growing, and wants to be in a fun, profitable business like Juicy Burgers.

Patrick: If they’re going to go into a second-generation location, including all the franchise costs such as the franchise fee, what would be like a total budget, more or less, to open up a Juicy Burgers?

Nick: So aside from the franchise fee, it would be up to $100,000. And I can tell you, for instance, just as an example, when we opened in Houston, Texas, we took over a closed-down Pei Wei Asian fusion concept. It was already built out. The hood was there, the grease trap was there, the building, the plumbing, electrical, everything was done. So all we did was put the signage up, put the equipment and furniture in and bring in our product. And it even had an existing walk-in, by the way. So a lot of these second-generation spaces also have a walk-in.

And I can tell you that the owner opened with $65,000, and he opened up doing over 80,000 a month in sales. So that’s probably the best version. Now, if it’s an existing second-generation space like that one, it really doesn’t take much because you’ve got to put your deposit in the rent for the landlord. Then it’s just signage and we call it FF&E, furniture, fixtures, equipment. That whole package can be done as a brand new package at around $65,000 to $75,000. But you’re also able to get used equipment or equipment at auction that could cut that in half. And what we…

Patrick: And do you help with that?

Nick: We do.

Patrick: Do you sell directly the equipment, or do you connect them with the sellers for the equipment?

Nick: Yeah, we have third-party vendors that we work with, auction companies, and third-party equipment vendors. And we can help them coordinate to get that equipment at literally, you know, less than half of what they would pay for it if it was brand new. That saves them a lot.

Juicy Burgers and COVID

Patrick: How have you guys adapted due to COVID-19? You know, we talked about Miami where all restaurants are open and there’s no restrictions compared to San Diego County, L.A. County, where there’s a lot of restrictions. How have you adapted with the different Juicy Burgers locations?

Nick: Well, that’s one thing about Juicy Burgers is we have adapted over the years to anything economically that’s come up. Now, 2020 has been a very unique year. No one expected COVID-19 to happen, but we have adapted. For instance, you know, in Southern California, Los Angeles, San Diego, it’s really just take-out or delivery. There’s no seating allowed outside, inside, at all. And so that’s a little bit of a challenge because it is just take-out or delivery versus Florida where it’s open and you can actually come inside the restaurants and sit down and order a meal and have it there.

And so we just take it, you know, district by district to determine, you know, how to best execute our concept. We do have delivery through Uber Eats, GrubHub, and you know, multiple home delivery systems that are available, that helps a little bit. And so we just try to support the franchisees in their day-to-day business and try to get more exposure with customer opportunities. We do a lot more catering. We’ve done a lot of corporate lunches where we have a corporate program, $10 a box, and includes the burger, drink, and a dessert of some type. And that seems to do pretty good. We have a lot of hospitals and businesses that have employees that want to order food. So we’re able to take care of that need.

Patrick: Great. So you adapted pretty well it looks like.

Nick: Yeah, we have, we have.

Nick: Exactly, exactly. The nice thing about our product too is it does hold well. It’s easy to transport. And the other nice thing about this business is that you don’t have to have a huge inventory in the back. You know, it’s the condiments, the produce, the bread, and the meat. That’s really, you know, simplifying your inventory investment, basically.

Opening Borders via Juicy Burger

Patrick: And where besides Florida are you most interested in expanding?

Nick: Well, we’re interested in both coasts from Florida, you know, up the coast all the way to Massachusetts. We are also in the West pretty much from, you know, Washington down to California. Nevada, Arizona are two opportunity states right now. We did have a couple of locations in Las Vegas. Unfortunately, those two had to be closed because the economy in Las Vegas was closed down earlier in the year. We’re working on a location on the strip next to Coca-Cola and M&M store, which is the Showcase Mall. And so, but those are opportunities, Arizona, Nevada, and Southern California. So we’re so close to the border, even though we’d love to go across into Mexico, into Tijuana, further destinations down there. So we were looking for someone who is interested in that.

Patrick: And it’s a great brand and logo.

Nick: Yes. Thank you.

Patrick: And yeah, tell me a little bit about your current franchisees, licensees. How many franchisees and licensees do you currently have and what would you be able to support over the coming years?

Nick: So what we’re able to support as we grow, we can grow our support systems. We have, you know, over 40 licensees that have been around for a really long time. And some of those locations have had multiple sales. They’ve been sold over the years. For instance, we had one in San Jose that opened in 1991, and it’s been sold 3 times, doing very well in Northern California. Franchisees, we have multiple franchisees now in several states. And we’re trying to build on the franchisee component because with franchising, we wanted to have a standard brand look and feel.

Under the licensing earlier in the years, as I was doing some of the other career elements of my career growth, I kind of put Juicy Burgers on the back burner for a little bit as a licensed concept. And so, really got serious in 2017 when I said, let’s start franchising and putting out stores that are franchise standard. So that’s the other thing the franchisee doesn’t have to worry about is, you know, the look and feel, design layout, what type of furniture, what type of equipment, it’s all been thought out for you. So it’s very simple to just execute.

Capital to franchise with us

Patrick: Do you have any restrictions in terms of capital required that they invest in a Juicy Burgers or overall net worth of a prospective franchisee?

Nick: Well, we like the franchisee to have at least $150,000 in net worth. And we would like them to have a liquidity of at least $65,000. The franchise fee is $50,000, but they can get financing. The Juicy Burgers is an SBA-approved franchise. So if you go to the SBA website, you can find us there as a pre-approved SBA franchise that you can get an SBA loan for. And so really it’s just working with the franchisee and their budget to try and help them get the restaurant opened most economically as possible.

So as we mentioned earlier a few times about second-generation space, there are opportunities out there where restaurants have already been built, and that saves hundreds of thousands, it saves a lot of money. So then you’re just putting in your FF&E, your furniture, fixtures, equipment, signage, and getting open. We help you with that. We’ve got operations manuals, training manuals, cooking manuals, marketing manuals. So we train the franchisee and their manager and employees on the proper way to execute the concept and deliver great service to our customers.

Patrick: That’s exciting. I like the simplicity of your model. And there’s a lot of food concepts that they have a very expansive menu and you’re dealing with all different types of suppliers, but from what I understand, working with Juicy Burgers, there’s pretty much one major supplier that they’re dealing with.

Nick: Yes, that’s correct. Yeah, we work with Cisco Foods nationally. They’ve been our partner now for, Oh my gosh, over 10 years. They’re a fantastic company. Sysco Foods is one of the leaders in food distribution. They also have test kitchens in the Sysco Foods offices where we go with their chefs and experiment and do some R&D to find out what might be possible menu items for Juicy Burgers. And they’ve been a great partner of ours over the years, and we look forward to continuing working with them.

Also, Coca-Cola. We have been exclusively a partner with Coca-Cola for 40 years, so we’ve never carried anything but Coca-Cola products. We think Coke is number one. And so those are two of our great partners on the food product line as well. And we’re proud to say that we work with them exclusively, and we get special deals for our franchisees through them as well. There’s rebates and…

Patrick: I was going to say, so Juicy Burgers corporate keeps those rebates or you pass the savings on to the franchisees? How does that work?

Nick: Yeah, we allow the franchisees to get those rebates directly from those vendors. We try to help the franchisee be as successful as possible. You know, especially when you first open, you need that cash flow to reinvest in marketing and training and sales building. And so we would rather have the franchisee benefit from those rebates and put it back into their business to build it.

Patrick: So really, the royalties you get back. I mean, you’re paying an ongoing royalty of what, 7%, but then they’re getting savings and rebates from the suppliers, right?

Nick: Absolutely. Yes. So there’s a 7% operations royalty and a 2% national branding royalty. But the franchisee does get a lot of that back in terms of rebates and other discounts from the suppliers.

Patrick: That’s great. Well, Nick, I really appreciate having you on. Is there any other, kind of, takeaways you’d like to get out there to a prospective franchisee of Juicy Burgers?

Nick: Yes. I think just to summarize, to get into the burger business, we can produce a business with Juicy Burgers that can generate $800,000, $1 million a year for an investment that could be as little as $100,000 versus competitor franchises that would require you to put in $500,000, $600,000, $1 million to build out. I can tell you when I was the franchise for Dunkin Donuts, and this is going back 10 years ago, one franchise location cost us about $800,000 to build. We were required to procure the equipment. And even after we opened, Dunkin Brands required us to have a certain labor schedule that was higher than normal labor. So the cost of operations was much higher. And so I’ve taken that away in the Juicy Burger concept to make sure that the owner can operate with the best lean operation…

Patrick: Yeah. Like, how many people do you have working, like, a typical shift? And then how about just on payroll?

Nick: So in total, when the restaurant opens, we try to hire about 20 employees depending on the location. Now, they’re not all full-time. About half of them are full-time. And then on a shift, you know, we have a very special labor guide that we use in terms of, we call it hour by hour management to manage your sales with your labor. We want the franchisees to have a direct labor cost of about 22%, 21.5%.

Patrick: That’s all? That’s good.

Nick: Which is lower…yeah. And if you have a manager, it’s another 5% with the manager’s salary. So you’re talking about 25% payroll in total. And so on a daily shift, you might have, you know, 6 to 8 employees, as many as 10, depending on the volume, but if you’re doing $1,000 an hour, you know, we schedule the employees accordingly for the business. But in the off-peak periods, you might only have two, three, or four employees. And so it really depends on the sales forecasting for the day. And we teach how to do that. So your two costs of labor and food to manage, those are real areas that have to be managed to maximize your profits.

Patrick: So when you add up labor and food, what’s like the target percentage that you look for, and what’s like a percentage where, you know, the franchisee could be in trouble?

Nick: Well, in total, you want that to…your food cost is usually around 27.5%, maybe 28%. So when you add in the labor, direct labor, let’s say roughly 21.5% or 22%, you’re just under 50% cost there in total. So that 50% will, you know, be your biggest cost areas. Then, of course, you’ve got fixed costs like your overhead, which is your rent. You’ve got a little bit of a controllable, which is your electrical costs and other costs, but you should be able to manage all your costs.

And this is what we teach our franchisees is how to manage that to get, you know, a double-digit profit out of your business. We try to get them 22%, 24% net profit. And it can be anywhere from 18% to 24%. It depends on how it’s being managed. It also depends whether the franchisee is owner-operator or absentee owner, whether you have a manager or just employees. So there’s some variables according to how your profitability will be impacted based on your staffing.

Patrick: Great. And I did send to everyone in the comment box a link to our website, and you can see all different types of metrics on Juicy Burgers. And if you’re interested in scheduling a call with Nick, you just fill out the form here. First name, last name, email, phone, cash available to invest, the time frame, and the state of interest. And Nick will reach back out to you to schedule an introductory call. As Nick mentioned, it is eligible for SBA financing. It’s in the SBA franchise loan directory.

Many franchisors do not qualify for SBA financing. And I mentioned to Nick before the call, there’s more and more banks that are open to lending to new franchise locations, as well as business acquisition. However, the major banks, think of Chase, Wells Fargo, it’s been difficult to get funding from them and the fintechs, but stay tuned because Vetted Biz is going to be creating a directory of different banks that are willing to lend money to Juicy Burgers franchises, other franchises at generally an investment of 30% down, and now they’re 70% financing. So stay tuned. But that will definitely help you if you decide to open up a Juicy Burger. I sent a link that you can access. And in the comment box, again, Juicy Burgers, fill out the questionnaire, and you’ll be able to arrange a call or video conference with Nick.

Nick: Absolutely. We’re available anytime the interested parties are available, even on the weekend.

Patrick: Awesome, Nick. Well, I really appreciate having you on, and thanks for all the guests that participated, and everyone have a great weekend.

Nick: Thank you. It’s been my pleasure.