Quick Flip: QSR burger restaurants
Culver’s, a classic Midwest-based burger concept, grows slow and strong by design.
Finalists: Wendy’s, Carl’s Jr., Freddy’s Frozen Custard & Steakburgers
There are a lot of franchises for folks who want to make a good hamburger, but Culver’s stands out as a steadfast concept with core differentiators that keep the brand growing strong.
In a lot of ways, Culver’s exemplifies its Sauk City, Wisconsin, heritage. It might not be the flashiest concept, but with a little Midwestern work ethic it’s exceptionally solid. In Franchise Times’ research, Culver’s came out on top in return on investment, even as its initial investment range of $1.9 million to $4.7 million was also on the high side. Financial performance, namely the $2.3 million average unit volume seen in 2018 and the low rate of closures, also got top marks.
Culver’s isn’t, however, the fastest growing brand out there, but its pace is a critical feature for the company. It didn’t race to the 727 locations it has today because it’s not easy to earn a second location—and it’s impossible to get a big development deal.
“In my mind, it’s brand protection. Culver’s isn’t like, ‘We need to open 100 restaurants in the next six months and anyone that wants to do it is welcome,’” said Carissa Rose, a franchisee with two locations in Arizona. “You have to do so well on your visits, our guest surveys are very important. Really, month in, month out, it’s a question of do you show up to market meetings? How do you run the restaurant? Are you involved in your restaurant? If not, you’re not going to get another one.”
That means slower growth, but because the “people pipeline” is never unduly stretched and nobody gets so large that operations can suffer, the company has very few closures each year and the AUVs keep rising.
It also keeps service levels high, said Rose. Her parents are franchisees, too, and she took advantage of an in-house mentorship program as a path to her own restaurants. That, coupled with the charismatic founder, keep the brand feeling homey.
“It truly is, first and foremost, a family business. My family business was No. 111, mine was No. 465, and now as we’re approaching 750 restaurants, it hasn’t really lost that family touch,” said Rose. “I don’t think there are many brands with a Craig Culver. I guarantee you that he remembers every franchisee; I think that’s very unique.”
Baron Waller, a four-location franchisee in the Chicago area, said that feeling is what got him to leave a nice but stressful job at IBM to jump into the burger business.
“I didn’t know anything about Culver’s at all. But I went in and someone opened the door for us. We walked in and ordered our food and they said, ‘Oh no, go sit down, we’ll bring it to you.’ Wow. So, we sit down and someone brought a chair for my son for his car seat. I was like, ‘Wow, this is great,’” said Waller.
He said he went directly to his wife with a plan to own a Culver’s, and five years and plenty of prep work later made the call.
“We looked at everything. I actually had an attorney look at the FDD and give me feedback. They gave me some areas of concern, and pretty much those were some of the strengths, the standards that Culver’s has in the FDD, that you have to adhere to all these things,” said Waller.
He said coming in from the outside was made easier by an exceptional amount of training around those tight criteria for operations.
+ A lot of support for franchisees, including an emphasis on initial training.
+ Especially high operations and service standards.
- Limited unit growth is by design but can prove frustrating for franchisees.
High standards can be a blessing and a curse, but at QSR brand Culver’s it’s as important to the concept as fresh beef and high-touch service. Based in Sauk City, Wisconsin, Culver’s doesn’t sign big multi-unit deals and instead requires franchisees to proven themselves with one restaurant before adding a second.
“Their operations are fantastic; they provide all that you need in order to be successful. They show you how, though your training, you work at every single station, you master every single station. Then after you master the stations, you spend time learning to manage the restaurant. Their operations and the system they provide really prepare you for success,” said Waller. “We have guests that come in and say, ‘Wow, we’re getting great service.’ That’s because of those standards.”
Of course, when the training team leaves franchisees still get a dose of reality.
“That’s not to say there weren’t learning curves within it as well. After the first four to five weeks, it’s you there really learning,” said Waller. “There are a lot of things that happen in a restaurant.”
He said his only complaint also stemmed from those high standards, which have impacted his ability to expand.
“It took me two and a half years to open my second. I felt like that was longer than it should have been. I have an MBA from Michigan, and I understand how things work financially,” said Waller. “But Culver’s haven’t failed. They have tough standards, but I understand them because we see franchises fail all the time, it’s a tough industry.”
He said with the limit of five fully owned locations per franchisee, he plans to expand by developing mentees and investing with them—the only way franchisees can go beyond the five-location mark. Two of his mentees are soon heading off to training.
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