Eilene Zimmerman

San Diego Business

Smashburger Coming to San Diego

Billed as a “better burger,” is there room here for the chain to succeed?
By Eilene Zimmerman
Posted on Sat, Nov 7th, 2009
Last updated Wed, Nov 4th, 2009

Over the next two years, seven Smashburger restaurants will open in San Diego. The restaurant is named for its burger cooking method, where beef is smashed, then seared and seasoned on a grill. Smashburger isn’t billed as fast food, rather, as part of the “fast casual” restaurant segment, where restaurants like Panera, PF Chang’s and Chipotle reside.

Although the burgers are made of Angus beef, served on an artisan bun and topped with a choice of cheeses (not just a slice of American), Smashburger president Scott Crane does not label the food “gourmet,” but simply, “a better burger.”

“We started using that term in the last eighteen months,” he says. “The idea behind the introduction of Smashburger—which opened in June of 2007—was that there really was no ‘better burger’ for people so they traded down and had fast food. Of the $100 billion burger business, 70 percent is fast food. So there was plenty of room for a restaurant like us in this segment.”

David Whisenhunt and partner Tom Elkins are Smash Bros LLC, the franchise group that will bring Smashburger to San Diego. Right now the pair is working on acquiring real estate and negotiating leases, but expect to have their first store open here by March.

Whisenhunt says in the first year, they will open between three and five stores and after that the goal is to open a new Smashburger every other month, until reaching their goal. Although it might appear a difficult time to be opening new restaurants in a new market because of the recession, Whisenhunt says economic conditions are actually working in the company’s favor.

“With the economy changing, my partner and I decided there was a business opportunity here, for the right concept,” says Whisenhunt. “We tried all the other burgers in town and saw a lack of upscale burgers, and room in the market. Consumers still want to go out to eat, but they can’t afford what they used to, even though they want a good experience, someplace they are proud to bring their family. They want to spend less but still have a good time and eat good food when they go out.”

The Smashburger interior.

_{Courtesy photo}

In fact, Smashburger has taken an aggressive approach to expanding during this recession. Crane says the company is finding better opportunities in the price of real estate and “great opportunities in terms of human capital—lots of really good people.”

The company has both corporate-owned and franchisee-owned stores, and signed its first franchise agreement just a year ago. Now it has 20 franchise partner agreements for more than 320 restaurants. “We went from three restaurants in 2007 to 45 by the end of this year,” says Crane.

In addition to its “better burgers,” Smashburger offers sophisticated side-fare such as veggie frites, rosemary-and-garlic-seasoned fries and milkshakes made with Haagen-Dazs ice cream, as well as beer and wine.

Whisenhunt doesn’t see any direct competition for the restaurant in the local area. But Burger Lounge, a local restaurant chain with four locations in San Diego serving burgers made from all-natural, grass-fed, small-farm-raised beef, could certainly be seen as that.

Burger Lounge’s menu also offers vegetarian options and, like Smashburger, its milkshakes are made with real ice cream. But Whisenhunt says Smashburger’s restaurants are much bigger and able to accommodate families, work gatherings and even meetings. And the price point is lower at Smashburger—the average check is about $4.99 per person, he says. A burger at Burger Lounge will cost you $7.95.

About the author: Eilene Zimmerman is a journalist based in San Diego who writes about a variety of topics, including business, social and political issues and family life. Her work has been published in national magazines and newspapers including The New York Times, The San Francisco Chronicle, The Christian Science Monitor, FORTUNE Small Business, CNNMoney.com, CBS MoneyWatch.com, Wired, Harper’s, Salon.com, Slate.com, Psychology Today and others. She blogs at www.trueslant.com.
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Comments

Posted by Lindsey	Sun, Nov 8th, 2009
Where will they be?

Posted by Eilene Zimmerman	Mon, Nov 9th, 2009
Hi Lindsey. They wouldn't tell me yet (I think they honestly don't know). They are right now acquiring real estate and negotiating leases. The stores will open in an area that extends "from Del Mar to National City to El Cajon," according to David Whisenhunt. Until then, we'll all just have to quietly salivate...

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