When Carl Bachmann was named CEO of BurgerFi in July 2023, moving over from being CEO of Smashburger, it was like the manager of the New York Yankees shifting to the New York Mets or vice-versa. But Bachmann will have his hands filled trying to raise the stock price of BurgerFi (BFI), which has been hovering at 1 and hasn’t budged recently.
BurgerFi consists of two restaurant franchises: BurgerFi, which operates 112 restaurants, and Anthony’s Coal Fired Pizza, which it acquired in November 2021, with 59 locations. BurgerFi has expanded mostly through franchising since it has 83 franchises and 29 company-owned. It is spread among 22 states and Puerto Rico though many of its outlets are concentrated in Florida, where Fort Lauderdale is its headquarters.
Bachmann sees connections between the history of both brands, BurgerFi and Anthony’s, despite their being so different in types of cuisine served. “Both were chef created, and had unique founders that created the chain, and had excellent quality food, taste and quality,” he said.
At Anthony’s Coal Fire Pizza, franchising hasn’t intruded yet since all are company-owned, but that’s about to change. Bachmann said it’s introducing dual-branded franchised locations of BurgerFi and Anthony’s Coal Fired Pizza in Kissimmee, Fl. later in 2023, a place which attracts many tourists to help spread the word, with a second dual-brand slated for 2024 at the New World Center in Miami.
Anthony’s will be stepping up its franchising efforts, now that it has its model nailed down, Bachmann said, in traditional formats and untraditional ones like airports.
Raised in Pelham, N.Y., a suburb just north of New York City, Bachmann calls himself a “New York pizza snob” and thinks that the brand’s tasty pizza will resonate across the country, where “there’s a great white space for a pizza, wings, and pasta chain, and the margins are great and sales volume strong.”
Enterprising Bachmann is trying to raise BurgerFi’s stock price, which has been languishing at 1, by boosting the revenue of both of its brands.
When BurgerFi bought Anthony’s Coal Fired Pizza in November 2021, Anthony’s was in the midst of turmoil, having closed several underperforming restaurants and being saddled by a sizable debt.
According to BurgerFi’s 2023 annual report, most BurgerFi locations, open for two years or more, generate about $1.7 million to $1.9 million each and Anthony’s generate about $2.1 million each. Most BurgerFi locations average about 2,200 to 2,400 square feet and Anthony’s are larger at 3,200 square feet.
In one-quarter of 2023, BurgerFi faced declining same-store sales of 4%. Candid Bachmann attributed that decline to “poor decisions that were made including cost-cutting, and we may not have had a great plan for bouncing back from Covid.” Turning the negative into a positive, he envisions “lots of opportunities out there” to get it back on track.
Even its languishing stock price at 1, Bachmann refers to as a “great buy. There’s value in it at a $1 a stock.”
Bachmann sees signs in later 2023 that sales are beginning to spark and rise. “We’re executing at a high level, listening to guest feedback, which indicates we’re moving in the right direction to drive long-term sales growth,” he says.
Asked specifically, what new strategies he has introduced to boost sales, he replies, “Focusing on taste, quality and innovation.” For example, he notes that 36% of guest feedback criticized its French fries, which taste-loss was due to cost-cutting procedures. He said it changed its processes, prepared the fries in a crisper way, and showed a bounce back in taste satisfaction.
BurgerFi is continuing to expand, having opened two so far this year, with 6 more on the way by the end of the year, and has 9 new eateries confirmed for 2024.
Compared to McDonald’s, Burger King and Wendy’s, BurgerFi brands itself as the premium burger using 100% American Angus Beef with no steroids, antibiotics, growth hormones, chemicals or additives. It also prides itself as being one of the first burger chains to partner with Beyond Meat, the plant-based burger known for its high protein and low-cholesterol.
True to his New York City roots, Bachmann is reviving a BurgerFi that had been open on the Upper East Side on Second Avenue that closed in 2021 but will be reopening in December 2023. It will also include the Better Burger Lab, starting in December, which highlights limited edition specials.
Bachmann noted, “There’s no better market for us than New York City. It’s the epicenter of food, entertainment, fashion and culture, and having a flagship restaurant there” is good for the brand.
When Bachmann was named CEO of BurgerFi, he introduced a 5-point growth plan, which mirrored much of what he did at Smashburger, and emphasized reorganizing the leadership team, reshuffling its real estate portfolio, reintroducing high quality food products, introducing a new marketing team, and emphasizing food safety, service and cleanliness.
He calls the target audience attracted to BurgerFi as a “higher-income family that has multiple children, enjoys eating out and delivery, and customers that crave a higher-quality product.” Most of its locations are in cities or nearby suburbs.
Since many consumers are hard-pressed to have enough money to dine out because of rising rents and interest rates, he said BurgerFi was well-positioned for any economic downturns. It offers a $10 to $12 burger, fries and beverage special, at Anthony’s, occasional $10 pizza nights, and a $30 special that includes a large pizza pie, 10 chicken wings and 6 garlic knots, enough to feed a family of four.
He embraces technology but he also sees a pent-up demand for dining in with friends and family, which goes against the grain of most fast-casual chains emphasizing speed and take-out, which, of course, it also does.
Bachmann describes the three keys to raising the stock price of BurgerFi as, 1) Unit growth in both company-owned and franchised locations, 2) Delivering high-quality, innovative products, 3) Sustaining processes that deliver high margins.
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