Largely unable to rely on drive-thrus, those in the better burger segment continued to lean heavily into digital channels in 2021 as they emphasized a premium product mix. According to the Franchise Times Top 500, total sales for the segment shot up 30.4 percent, to $3.75 billion, a major increase from the 2.7 percent overall bump in 2020.
The Franchise Times Top 500 is an annual ranking of the 500 largest U.S.-based franchise systems by global systemwide sales. Five Guys, the largest company in the better burger segment, grew its sales 22.7 percent in 2021, to $2.8 billion. It finished the year with 1,733 total units, an increase of 3.8 percent.
Habit Burger Grill, which debuted on the ranking last year and jumps to No. 148, grew sales nearly 60 percent, to $588 million, and added 51 restaurants to bring its footprint to 338. CEO Russ Bendel credited the brand’s positioning for setting it up with long-term consumer appeal.
“Fresh, made-to-order, higher quality food is certainly resonating with consumers,” said Bendel, while its acquisition in March 2020 by Yum Brands has enabled Habit Burger to tap into “tremendous scale.”
Russ Bendel, CEO of The Habit Burger Grill since 2008.
Yum, which owns Taco Bell, KFC and Pizza Hut, gave Habit Burger access to a “stable of world-class franchise partners” who, in addition to acquiring smaller packages of existing restaurants, are signing new development agreements. Habit, continued Bendel, will always own a significant number of restaurants—it is 17 percent franchised—because “franchisees like the fact that we’re operators and have a long history as operators.”
“We have always felt one of our biggest strengths is our operating capability. Humbly and respectfully, we out-execute the competition and work very hard at providing a great customer experience,” he said.
Yum’s scale is also proving beneficial when it comes to marketing and supply chain expertise. Bendel called out Restaurant Supply Chain Solutions, Yum’s exclusive supply chain management organization, for helping Habit navigate ongoing supply challenges and ensure its restaurants have the inventory they need. “We’re certainly not immune to inflation,” he pointed out. “In my 40-plus years I’ve never seen the short-term pressures on commodities we’re seeing right now.”
Like others in the segment, Habit Burger implemented off-premises channels such as curbside pickup and third-party delivery, which were a key contributor to sales in 2021. “Today, those sales and those formats have been very sticky with consumers,” said Bendel, with Habit’s digital sales steady at 30 percent. About 60 Habit Burger restaurants have drive-thrus and the company has made a commitment to building more, he said.
BurgerFi President Patrick Renna.
BurgerFi, which went public in December 2020 by merging with Opes Acquisition Corp., likewise “really stepped on the gas bringing in tech,” said President Patrick Renna. The company, ranked No. 285 on the Top 500, grew sales 25.2 percent in 2021, to $166 million.
In addition to delivery and mobile ordering, BurgerFi began introducing self-service kiosks last year in corporate restaurants. “We’ve seen some really good success in driving check average and getting people to explore the menu a little more,” said Renna, who noted BurgerFi is continuing to roll out the kiosks in company stores and is encouraging franchisees to add them.
Other sales growth drivers included the opening of 10 corporate restaurants last year and a “hugely successful rollout” of the Swag burger, a wagyu and brisket burger that brought “a huge increase in sales and traffic,” said Renna.