Bubbakoo’s is king of conversions, in The Urbane Franchisor
Photo by Nicholas Upton
There is something inherently pleasurable about getting away with something, as long as it’s on the right side of humanity. In the fast-casual burrito space, Bubbakoo’s Burritos is making a killing converting failed restaurants into new locations, saving a fortune compared to building new and learning a lot about what items are truly must-haves versus nice-to-haves. Full-scale renovations are not for the faint of heart, and this action sports-themed restaurant has proven itself up for the adventure.
With 24 open units—all within New Jersey—and an additional eight under construction, Bubbakoo’s has taken a flexible approach to its ideal store template, willing to bob and weave more than many of its contemporary brands to save money on the all-in purchase price, reuse perfectly good used equipment like vent hoods and give each location a truly unique look and feel.
Bubbakoo’s co-owners Paul Altero (left) and Bill Hart.
CEO and co-founder Paul Altero admits his real estate strategy can be more labor-intensive than building new on vacant suburban lots, but said his fixer-upper, penny-pinching ways have allowed the brand to scale up sooner than would have been possible with fewer, more expensive locations.
“We wanted to franchise sooner.” After locations three or four “we were itchy to start to franchise, but we thought it was important to discipline ourselves and continue company growth to really make sure all the kinks were worked out before we officially franchised,” he said. “In retrospect, I think that was a great decision for so many reasons.”
Altero knew his food was unique enough to build a customer following, with hibachi-style proteins, ghost pepper chicken and eight add-on flavors among other innovations, but it was also important to stand out to potential franchisees with attractive average unit volumes and dramatically lower construction costs than a certain mega burrito chain that must not be named.
Referencing the gristly years of the Great Recession, he said the conversion strategy first appeared when he started to notice an increasing number of failed restaurants around town. The first that caught his eye was a 1,300-square-foot former restaurant that shared a large dining room with a Jersey Mike’s in Point Pleasant, New Jersey. It was an unusual layout by any definition, but he pulled the trigger anyway. Today, the conjoined restaurants still share a dining room, but Altero said “I can proudly say 10 years later it boasts sales north of $1.3 million out of a very small space—it’s like a factory.”
Crafting a mental vacation
Out of those 24 Bubbakoo’s locations, footprints range from a low of 1,300 square feet to as large as 3,500 square feet. With higher costs in the Northeast’s urban areas, the company hopes that flexibility is a boon to developers looking to bring the concept into new markets, including Manhattan and Philadelphia, which Altero listed as two primary targets for the near future.
Bubbakoo’s Burritos has replaced several defunct franchise chains in its home turf in and around New Jersey.
Once inside, guests are hit with a bright avocado-green wall that’s become part of the brand identity, including reclaimed wood and huge TVs playing things like the X Games, Red Bull events, skydiving, BMX and skateboarding competitions, along with a lot of surfing.
“They are mesmerizing, that’s part of the experience,” he added about the screen fare. “You’ll see people just stuck to the TV because there’s some daring escapade or some high-energy sport playing.”
While admitting that his own music tastes fall into the ‘80s and ‘90s alt-rock, Altero’s business partner and Bubbakoo’s co-owner Bill Hart has put a similar amount of attention into the music to complement the high-octane sports, which they refer to as a “mental vacation” for guests.
All told, the first 10 company-owned Bubbakoo’s went into failed restaurant spaces. That has included a defunct yogurt shop, several mom-and-pop Mexican restaurants, Burger Kings, a Steak ‘n Shake, Subway and Smashburger.
“I’m referring to us on LinkedIn as the kings of conversion, because we’re really good at looking into a space and saying, ‘Hey, we can make this thing work,’” Altero added.
Unlike a “vanilla box build,” his nickname for new construction, conversions have ranged from $100,000 up to a high of $150,000, which is a huge savings compared to an estimated $250,000 or more to start from scratch. He was careful to note there are other expenses like franchise fees that add to the total cost, as listed in the Item 7 of its franchise disclosure document.
Reusing the flooring is just one of several money saving items to look for in a site.
Chasing the stone pony
When evaluating a vacant restaurant space, the Bubbakoo’s team looks for things that can be repurposed, especially big-ticket items like vent hoods, flooring, bathrooms, utility connections and sinks that he collectively views as “good bones.”
Altero, Hart and a designer they’ve worked with for a decade handle interior design in-house. The brand’s architecture is outsourced to two firms with a history of building Jersey Mike’s locations. Contracting is also outsourced, with the capability to build several restaurants at the same time, although franchisees are free to use their own general contractor if desired.
“The bottom line is, we’re taking a store that was doing $250,000 in yogurt sales, and we’re converting it for less than $100,000 with everything, and our AUV is north of $800,000 so that’s a good equation,” Altero added.
Even as shuttered restaurants become fewer and farther between, Bubbakoo’s is proud that it hasn’t completed the circle of life by closing any of its own restaurants in the brand’s 11 years in business.
In the coming months, Bubbakoo’s will continue looking for attractive non-traditional locations like its location at The Stone Pony music venue in New Jersey, while also looking to bring its adrenaline fueled burritos to the major metro areas along the East Coast.
Tom Kaiser, pictured on previous page, is senior editor of Franchise Times and writes about urban tales in franchising in each issue. Send story ideas to email@example.com