Burger Business?

My guestion is what do you guys think about burger business?


After starting and running a high volume pizzeria I sold it for a good profit. Pizza business is always option to me but now I like “burger business” better than pizza.
Why?
Better food cost.
Better labor cost.
Unlike pizzeria no need for additional insurances.

My favorite burger business is “Five Guys” They only sell burgers, fries and hot dogs and it seem like they average about $20K weekly for each location. I assume “Five Guys” running less than 45% food % labor combined.

Burger business is getting hotter than ever.

You said...

"Better Food Cost"...that depends on the type of burger you use and the quality of ingredients vs. the price you charge. You can use a cheap burger and price it high and have a great food cost, but that doesn't mean anything if you can't sell it. Better food cost is realtive.

"Better Labor Cost"...again that depends on the product served. Generally, Burgers are more labor intensive than pizza if you want to serve a quality product.

"Unlike pizzeria no need for additional insurances"...this would depend on your local codes and what is required for pizza vs hood & ansul systems for grills and fryers. In our area only ventilation is required for pizza, while a full blow fire suppressant system is required for grills and fryers, these require 6-month inspections and higher insurance premiums.

I'm not fimiliar with Five Guys, so I cannot comment about their operation. As for mine, 2 burger places and a pizza delivery operation, I would only dream of a 45% combined food & labor cost. But again, that is realative to what type of product vs the retail price and the amount of volume done.

But the burger business is just like any other, a good quality product at a fair price will keep the bills paid.

HB

If by additional insurance you mean delivery drivers I think your backing up... IMHO every food establishment should deliver. If your knowledgeable about restaurant operations why even consider being locked into a chain? GO BOLDopen Tony's Tremendous Burgers Fries and Shakes! Even if you have to start small its better than dancing to a corporate overlord pulling strings

Burgerman what is your L&F cost in Pizzeria business vs. Burger business?

If burger place is only selling burgers, hot dogs, fresh cut fries and drink there will be less Labor cost then a pizzeria since most pizzerias also use grill & fryer besides the oven. That makes a huge difference on Labor.

Also food cost will be less because burger place is using fresh cut fries and fresh burger.


Never mind the simplicity of running a business when you have only few items on your menu.

By the way “Five Guys” is in a hot fast casual concept. They require 1500sq to 2200sq space and use very simple design. It cost less to build Five Guys than the other burger businesses yet they average 30K a week in overall stores not 20K as I stated earlier.

They currently have over 58 stores. They are planning to open 300 stores by the next 5 years.

I am not interested to franchise Five Guys. I only like their simple operation with higher profit margins.
I will have my own burger place.

I forget to thank those who will contribute any response.

Thank you Burgerman,Dreampainter

Excluding paper & chems, combined food costs on burger operation should run 50 to 52%, on the pizza operation 45% to 49%.

Again, a lot of it depends on the quality of the product, that will effect both labor and food costs dramatically.

Another thought, the more narrow your menu focus, the more customers you must have to support sales. What you may trade-off in labor costs will be used by higher occupancy costs.

But I agree with what you are saying, less is more. I would define what your burger is going to be, same for hotdogs and fries. Define your USP and then start searching for the correct location. If you want to talk more indepth, e-mail me at hblack100@birch.net and we'll set up telephone time.

HB

For simple "food cost" pizza is a hell of a lot better. Cheese being your biggest cost, is a commodity and changes weekly, so does beef. A large pizza with 3 veggie toppings will cost you AROUND 2.00. I say around because quality and price of canned toms and cheese vary greatly. A three topping pie, in connecticut, will fetch a price of around $18.00. That is a niiiiiiice ratio. Of course you have to factor in many other things before you can figure out actual profit. However I believe a well run pizzeria, selling mostly PIZZA (not a ton of italian food, grinders etc) should gross 15-18%, and I am sure that old timers with no debt service probably break 20%.

Pizza has many advantages, besides profit margins, over burgers and restaurants in general. In the industry, 4:00- 6:00 is a dead period that led to the nauseating "early bird specials" where stores try to bring in customers.
In pizza this is one of the busiest times, as people returning home from work pick up dinner.

Pizza is considered a healthy alternative, and it can be with the right toppings.

Pizza is something EVERBODY orders for a variety of occasions. Birthday parties, office parties, ball games, tv sports (super bowl) late work at the office, etc, etc, etc.

Good pizza is very difficult, if not near impossible to make at home. People are afraid to try it.
Burgers can be beautifully done at home.

The only draw back to the pizza industry as I see it is:
Labor costs are generally higher than most restaurants
Good pizzaiolos are difficult to find.

I've been in the restaurant business for 30 years, and in the pizza bizz for 6 years. We sell brick oven pizza and grind our own 1/2 lb burgers, which we cook on a black iron griddle. Pizza and burgers account for 90% of our business. We sell about 600 lbs of ground chuck every week, and about 1200 pizzas a week, so I see both ends of the business. Any way I can help just ask. There are a lot of misconceptions about this business, and I have experienced just about everthing in 30 years.

PS
Burger man has got a ton of knowledge. I can tell right off hes got experience. One thing though, Burgerman. My labor for pizza is far higher than burger line. Comment??

Cy.....

Labor costs are always relative to the product made. For example if we owned a pancake house. We would have the option to make our pancakes from scratch and cook to order, thus more labor and lower product cost,or we could have the option of purchasing pre-made pancakes and microwaving, a cost savings on labor, but then the food costs go up for the pre-prepared product.

Same is true with pizza, burgers, or whatever. With pizza if you decide to prepare your own toppings, your own crust, cook your own sauce form scratch, I'm sure your food costs will be lower, but your labor will be higher. With burgers the same philosphy is true.

That is the reason I cringe when I have some ask what my food costs are. You can't compare apples to apples unless both restaurants are selling and preparing the apples the same way. For example, we use fresh ground beef that we roll into 4oz balls and patty before they hit the hot grill...thus our food costs are lower than buying pre-made patties, but our labor costs are higher.

That is the reason that I suggest not talking so much about food costs, but a comparsion of food costs combined with labor costs. For comparison purposes that is a much better way of talking the sme language.

Finally, I know that it seems that I'm talking in circles, but this a circular problem where all components must fit just right. This is what you need to ask yourself at this point..."what do you want your business to stand for?" Draw me out a rough sketch of a menu and tell me about the quality and what you want your business to be famous for, then you can find the path that you need.

HB

thank heaven. someone who understands that food cost is relative.

some of the top steak houses run food costs nearing 40%. of course, they can have four or five guys on the line and turn hundreds of covers. and, although this is slightly off the point, steak eaters tend to be drinkers.

or you can have one of those places (i won't mention names) where you sell 3 oz of fish for $45. but you need a very large brigade to turn out food of that quality, and plating that one would expect for that price.

of course, you can have the best of both worlds: i was the chef of a large (270 seat) italian restaurant. not top of the heap, but very respectable. i had 7 guys on the line. on a busy night we could do 800 covers. everyone drank. everyone ate pasta (on a night like that we could do 400 orders of pasta). sometimes there would be a party for 200-300 upstairs at the same time. think we made some money???

it's the big picture that counts. the numbers mean almost nothing in isolation.

the bottom line, thats what its all about.
i absolutely agree about the relativity of food costs.
i had a pizza place for years. lowest food cost item known to man!
but, when you add in the expenses, and the other food items, thats where the trouble begins. if you can make it on one simple thing, like just pizza, then your bottom line would be greater. when you add subs, pasta dishes, salads, wings, e.t.c. your food cost percents go way up, of course. so lets talk about "take home per cover" thats what we need to know before adding a plate to our menu.
if you sell an item that is 70 percent food cost, that yeilds a 5 dollar 'take home profit' versus something that is a 30 percent food cost that yeilds a 2 dollar 'take home profit', which one would you rather sell>>>>>>>>hhmmm! ok, so food cost is higher, but profit generated dollars is better, and more important.
in the end, all that matters, is THE BOTTOM LINE
before i will add something to my menu, i research and determine if there is a better way to generate 'bottom line dollars' with the proposed expense. also, to know its impact on all figures of the pnl

bassrocker, that was a good post.

Sometimes, as owners we worry to much about percents, that's not what we take to the bank, we take dollars. Example, a steak dinner may generate a profit of $10.00 while using up 55% food costs, while another item may generate a $1.00 profit and 20% food cost. Both items may still be profitable depending on the volume of each. It's the clash of the titans, or McDonald's Burgers vs a Morton's Steak House.

So getting back to the point of this thread, to detemine if something is a viable offering, (1) determine the true cost of the product and an acceptable retail, (2) figure out how it will fit into the scheme of your menu, (3) then make the decision if that product is worth the investment of equipment, product and time.

Just for fun have you ever done this, you know what your yearly sales are, and if you have POS compared how many items you sold of each to get that total. If you don't have POS you can probably do some figuring and get a somewhat accurate total. I bet you will be surprised!! Those slow movers are REALLY SLOW MOVERS and what you sell the most of are really hot.

Burgers and Pizza is a great combination! Which will sell the best and generate more dollars going to the bank....again it's all relative.

thanks. yea, i have dont that. i even take it a step further.....
i charge each item rent! haha, but its a great tool. simply figure your total overhead, divide by the number of living square feet in your building, and charge each item by the amount of space it requires, including all storage areas for that item, and its associations(i.e.- extra condiments above whats already stored).
then, see if that item is still profitable after paying its share of the overhead. you may have to kick a few things to the curb...heehee
back to the thread. i dont think it matters wether you pick burgers or pizza, bbq or steaks. what matters is you market. first, you must know your target neighborhood , then the choice will be clear.