BurgerFi — the emerging premium burger chain takes on Shake Shack
Drive-thrus, digital ordering and ghost kitchens — where only food for delivery are cooked — were restaurants’ recipe for survival during the pandemic.
And one emerging burger chain — whose patties aren’t made with sand — is embracing digital in its expansion plans…
Growing with ghost kitchens
BurgerFi, which recently went public in Dec 2020, is a fast-casual premium burger chain focusing on natural ingredients — popular for its wagyu burger.
- Currently has 125 restaurants across 23 states — with a strong presence in eastern US (popular in Florida)
- Plans to open 25-30 restaurants and 15-20 ghost kitchens in 2021.
BurgerFi is using ghost kitchens — which are much cheaper to set up — to test new markets and grow its brand awareness.
New management, who dis
BurgerFi is busy on the hiring front — bringing in an experienced management team with decades of fast-food experience. In the past year, BFI:
- Added Julio Ramirez, the ex-COO of Burger King (26 tenure at BK), as its new CEO.
- Brought in a new CFO, CMO, COO — notably Jim Esposito (COO), also with 12 years at BK— and added Martha Stewart to its board.
Armed with cash from going public and a new management team, BurgerFi is getting ready for some aggressive expansion plans. And luckily for BurgerFi, lower rent prices from COVID could help it grow faster.
Getting speculative: Fast food chains have a history of being acquired by large restaurant groups. With several ex-BK execs, could BurgerFi be a potential acquisition target for BK’s parent company — Restaurant Brands International?
Investors: The king of better burgers, Shake Shack
When it comes to the better-burger category, Shake Shack (NYSE:SHAK) is near the top. So how does BurgerFi compare to Shake Shack at the time of IPO?
- Shake Shack’s stock had a measly return of 83% despite growing its sales by more than 6x since going public over 6 years ago.
- Why so low? IPO hype and pre-IPO investors drove up its stock price — leading to a higher valuation upon going public.
At a $175m market cap, BurgerFi’s stock trades at a cheaper valuation than shake Shack when it went public — giving BFI more potential upside.
Fast food biz: Sweetgreen, the popular salad chain, confidentially filed for an IPO and is expected to go public in 2021.