The New York Times reported over the weekend about how BurgerFuel, a New Zealand fast food chain, "is undertaking an ambitious expansion plan in the crowded American market through a partnership with Subway restaurants, an industry giant … BurgerFuel hopes to use Subway’s scale in the United States by signing up some of its franchisees to open BurgerFuel stores. The company has already been taking registrations from interested Subway franchise owners."
BurgerFuel is reported to be a very small company, in comparison to Subway: it generated just $10 million (US) in revenue last year, compared to Subway's more than $12 billion. But it is thinking big, having already seen some success in franchising its format in the Middle East.
According to the story, "In January, BurgerFuel signed a partnership with Franchise Brands, based in Connecticut, a company set up by the Subway founders Frederick A. DeLuca and Peter Buck to support small and midsize companies. Franchise Brands is aiming to support BurgerFuel’s expansion efforts in the United States with business mentoring and legal advice. Franchise Brands has also bought a 10 percent stake in the New Zealand company for 8.05 million New Zealand dollars, with the option to expand its holdings to 50 percent over the next eight years."
BurgerFuel is reported to be a very small company, in comparison to Subway: it generated just $10 million (US) in revenue last year, compared to Subway's more than $12 billion. But it is thinking big, having already seen some success in franchising its format in the Middle East.
According to the story, "In January, BurgerFuel signed a partnership with Franchise Brands, based in Connecticut, a company set up by the Subway founders Frederick A. DeLuca and Peter Buck to support small and midsize companies. Franchise Brands is aiming to support BurgerFuel’s expansion efforts in the United States with business mentoring and legal advice. Franchise Brands has also bought a 10 percent stake in the New Zealand company for 8.05 million New Zealand dollars, with the option to expand its holdings to 50 percent over the next eight years."
- KC's View:
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I'm a burger guy, so I'd probably be willing to try BurgerFuel, and I'm intrigued by the notion that, as the Times writes, "burgers are marketed as having high-quality ingredients, including fresh vegetables and aioli sauce, New Zealand beef from grass-fed cows and vegetarian options. Recently the company announced it would use only free-range chicken in its New Zealand restaurants," though it has not committed to maintaining these same standards in the US.
The company says it offers an adult fast food experience, with a slightly more expensive burger, as opposed to a "kiddie" oriented experience. Which also works for me. But no matter what all the financial permutations happen to be, I'd have to say that BurgerFuel is going to need something else to be successful, or at least worth going to. And that's terrific, and differentiated, food.
