BurgerFi makes leap from Florida to Puerto Rico
Phillip Faigenblat’s restaurants are built to withstand high-speed winds, each is braced for power outages with generators on standby and, he notes, “We keep a stock of three to four weeks of supplies so if we were to miss a shipment because of a port closure we can stay open.”
It’s the type of preparedness that comes with the territory—specifically the unincorporated organized U.S. territory of Puerto Rico, where Faigenblat operates 14 Denny’s restaurants and where tropical storms and hurricanes are just part of the deal. “If you’re not prepared, you fail,” says Faigenblat simply, noting his restaurants have ridden out numerous storms, including Hurricane Maria, which hit the island in 2017.
While Puerto Rico’s infrastructure and economy are still recovering from Maria, Faigenblat, who has 30 years of island restaurant experience to his name, is poised to launch his second franchise brand, signing a six-unit deal with Florida-based BurgerFi. His first location of the fast casual burger concept is on track to open in late 2019 in the capital of San Juan, with two more sites in simultaneous development. Those swift openings are part of Faigenblat’s strategy to “be first to market and execute correctly.”
Charlie Guzzetta, BurgerFi’s director of brand development, says outdoor dining is a key element of the brand. Case in point: Its Pinecrest Place location in Miami, top photo, has a thoughtfully designed patio.
“There’s nobody in that field in Puerto Rico, there’s no BurgerFi competitors here,” says Faigenblat of the island’s dearth of better burger restaurants specifically and fast casual concepts in general. “There’s only QSRs right now in the burger segment and consumers are looking for quality and we also liked that they have a vegan option” with the Beyond Burger.
Faigenblat, who is also the director of Puerto Rico-based real estate development firm Interplan, was born on the island and splits time between San Juan and South Florida, where he and his family were BurgerFi regulars. “There’s a lot of travel between Puerto Rico and Florida” among Puerto Rico residents, Faigenblat points out, meaning there’s high awareness of the BurgerFi brand and demand from consumers who want more options on the island.
The first three BurgerFi locations will open in high-end demographic areas of the San Juan metro before Faigenblat expands to additional markets where he notes there are still the income and population levels necessary to support the brand. “We’re seeking middle-to-high-class areas where they’re less price sensitive,” he says. “It’s the customer who wants that quality and wouldn’t go to QSR.”
While quality food is at the forefront, another feature of BurgerFi that Faigenblat found attractive was its emphasis on outdoor dining, an essential element for restaurants in the tropical locale.
“The Puerto Rican consumer likes to go out and have a good time. It’s a happy place,” says Faigenblat. “We really want to emphasize that indoor/outdoor element with BurgerFi.”
“That’s a focal point of the restaurant, not just an afterthought,” says Charlie Guzzetta of BurgerFi’s thoughtfully designed patios that extend the look and feel of the modern restaurant to the outdoors. Guzzetta, BurgerFi’s director of brand development, says the company also continues to develop its draft beer program, something diners in Puerto Rico want. Menu adaptations will be minimal, “maybe sides such as root vegetables, hand cut yuca fries, batatas,” notes Faigenblat of two island staples.
Phillip Faigenblat plans to make BurgerFi Puerto Rico’s go-to spot for better burgers.
Collaboration with the franchisee is exactly what BurgerFi knew it needed if it was going to successfully expand beyond the mainland. While the brand does have locations operating in Mexico, “we have a lot to learn when it comes to international,” says Guzzetta, which is why it sought an experienced operator.
“We have segmented some support functions” to support growth outside the U.S., continues Guzzetta, but Faigenblat’s ability to begin development right away without intense reliance on the corporate office made him an ideal partner. “He blew us away right from the jump,” says Guzzetta. “We want high capacity operating individuals.”
While Puerto Rico is of course part of the United States and businesses are subject to the same rules and regulations, operating a franchise there brings with it challenges akin to expanding internationally. Case in point: the supply chain.
“One of the hardest endeavors to export is your foodservice supply chain,” says Faigenblat. “We’ve developed our own distribution channels, we get container shipments weekly.”
Puerto Rico also had its own political challenges this summer when Ricardo Rosselló resigned as governor following protests related to a text message scandal and allegations of corruption.
“The governor and his team realized that they committed some errors,” says Faigenblat, noting there were “one or two weeks of uncertainty,” but new governor Wanda Vázquez has made a smooth transition.
The island’s recovery from Hurricane Maria, meanwhile, is still underway. There’s lots of new construction, notes Faigenblat, and he’s optimistic about the future of his businesses.
“People are timid about what’s happening with the economy, but we haven’t seen it,” he says of the slowdown. “We’re up double digits in sales” at Denny’s restaurants, “and we expect the same from BurgerFi.”