Chanticleer Holdings, parent of the Hooters chicken chain, announced an agreement to acquire all outstanding share of five-unit burger chain American Roadside Burgers (ARB). Terms of the acquisition were not released.
The signature four-patty Roadstar burger.
ARB like Chanticleer is based in Charlotte, N.C. The concept opened 10 years ago in Smithtown, N.Y. It also operates two locations in Charlotte as well as units in Columbia and Greenville, S.C.
Chanticleer Chairman-CEO Mike Pruitt said in a release that the deal for ARB “is our first departure from our ongoing development of Hooter’s restaurants in foreign countries. This acquisition will in no way change our focus on the development of Hooters restaurants internationally, but American Roadside presents a unique strategic opportunity in a high-growth space.”
ARB’s signature menu item is the four-patty Roadstar burger ($8.95). Other specialties include the Roadside Rally double cheeseburger ($6.95) and Route 66, a double-patty burger with pepper-Jack cheese, bacon and barbecue sauce ($6.95). The menu also includes pulled pork and Philly Cheesesteak sandwiches, salads, chicken wings and hand-scooped milkshakes.
Terms of the preliminary agreement call for Chanticleer to issue 740,000 stock (HOTR) units to the owners of Roadside Burgers, with each unit consisting of one share of common stock, and one five-year warrant, priced at $5. The value of the share exchange will be dependent upon Chanticleer Holding’s stock price at date of closing, which is expected to be Sept. 30, 2013.
Feeling the pinch from QSR burger chains’ $1 menus? Consider this response from Farm Burger in Decatur, Ga. On Monday, Aug. 19, it will hold “Grassfed Fête” to celebrate its 3½ years in business.
The celebration feature’s the concept’s own version of a $1 menu. And this one has local connections that no chain can match: $1 Moonshine Meats 100% grass-fed beef sliders; $1 pulled pork sandwiches from a whole roasted Anderson Farms hog; $1 Darby Farms Spicy Chicken Wings; $1 quinoa veggie burgers with goat cheese and pickled veggies; $1 beer-battered onion rings and $1 sweet-potato or regular fries. Lil Farmer Meals for kids are just $1, too. Red Hare root beer is $1 and so are Red Hare root beer floats.
Atlanta’s Southern Folk Preservation Society All Stars provide the music.
With locations in Buckhead (Atlanta), Dunwoody and Decatur, Ga., plus Asheville, N.C., the chain has built a reputation for great daily specials. On Aug. 14, for example, the Buckhead location’s Daily Burger was a grass-fed beef patty with pepper-Jack, cheese, red cabbage slaw, pickled jalapeños and sherry-date BBQ sauce. At Decatur it was grass-fed beef with Gruyère cheese, sautéed local Lacinato kale, mushrooms and paprika mayo.
The difficulty of the current restaurant marketplace is such that despite reporting solid results, Red Robin Gourmet Burgers executives felt compelled to advise analysts that sales increases are hard won. “The environment continues to be volatile from a consumer spending [perspective],” SVP-CFO Stuart Brown cautioned. “Consumers continue to pull back even more than we had expected at this point in the economic cycle.” He said the market has softened more just in the past several months, explaining the series of negative growth reports for July given by several chains.
For its second quarter ended July 14, 2013, Red Robin reported a 4.3% gain in same-store sales for company-owned restaurants. However, that gain came from a 5% increase in average check mitigated by a 0.7% decrease in guest counts.
More than half (2.7%) the 5% check average came from increased sales of appetizer, beverage and dessert sales, with the remaining 2.3% coming from pricing. Red Robin’s instituted tiered pricing for appetizers this spring. Items are grouped as $3, $5, $7 or $9 in price, which has helped boost sales. The appetizer plan has “resonated well with consumers,” said SVP-CMO Denny Marie Post. She cautioned that appetizer sales may have benefited from initial trial that may not be maintained.
Tiered pricing for appetizers has won customer acceptance.
Red Robin says it has improved food plating and presentation as well as service as a result of its “brand transformation” tests.
The increased pricing has come from shifts such as upping the price for the Pig Out Style burger-toppings option to $1.50 from $1 and adding a Kuzuri Style option at $1.50. Post said the chain has seen “no evidence that [the Style price hikes] cause any harm.”
But Red Robin’s $12.15 average check remains one of the lowest in the casual-dining segment, CEO Carley said.
Carley declined to give details about Red Robin’s test of premium burgers. But as previously reported here, that test includes three Black Angus prime beef burgers with toppings such as oven-roasted tomatoes, sautéed Portobello mushrooms and house-made aïolis and sauces. Coupled with the chain’s Bottomless Steak Fries, the premium burgers are at priced from $12.99 to $14.29. The premium burgers, served with the chain’s Bottomless Steak Fries, are priced from $12.99 to $14.29.
Red Robin’s “brand transformation” initiative involving a test of three levels of remodeling investment continues to provide useful insights, Carley said. The nine restaurants (of a total of 20 remodels) that have received the full $400,000 treatment have seen a 6% sales lift. Red Robin is doing an additional 20 transformations this year and then will “rest” to evaluate results, said Brown. Next year the chain intends to test a lower-cost remodel package for lower-sales units. The payback period on the investment is estimated to be less than five years.
Here’s where we are with four trends influencing the burger business:
Sonic’s Breakfast Burritos: now with egg whites.
BLT: Bacon mania has, not surprisingly, brought a renaissance for the BLT sandwich. BLT burgers had to follow and they have. McDonald’s first tried a Quarter Pounder BLT in Japan, then moved it to Canada. Now the QP BLT is offered across Texas, North Carolina, Virginia and other markets. Watch for it to be nationally available soon.
Egg whites: Sonic Drive-Ins have followed McDonald’s lead and now offer the option of egg whites only in place of whole eggs in breakfast burritos and sandwiches. McDonald’s Egg White Delight McMuffin started the trend. Is anyone out there offering an egg-white-topped burger?
Cronut Burger from Epic Burgers and Waffles in Toronto.
In Japan, McDonald’s has added an eggless McMuffin that’ more lunch than breakfast. The summer McMuffin has a sausage patty with tomato slices, Cheddar cheese, lettuce and yellow mustard.
Ruby Tuesday’s pretzel burgers
Cronuts: The hybrid of the croissant and doughnut created (and trademarked) by pastry chef Dominique Ansel has received far more media attention that it merits. But when the trend creeps into the burger arena, well, that’s news. Toronto joint Epic Burgers and Waffles and bakery Le Dolci are teaming to offer Maple Bacon Cronut Burgers at the Canadian National Exhibition in Toronto from August 16 through September 2. The price for such trendiness? The burgers will be $10 each.
Pretzel-bun burgers: They’re the burger trend of 2013 (which you’ll recall BurgerBusiness.com forecast would be The Year of the Bun). Wendy’s Pretzel Bacon Cheeseburger kicked it off. Dunkin’ Donuts has answered by offering any of its bakery sandwiches on a pretzel bun. And casual-dining chain Ruby Tuesday has joined the parade with a set of four pretzel-bun burgers. The varieties: Spicy Jalapeňo Pretzel Cheeseburger; Portabella Crispy Onion Pretzel Cheeseburger; Bacon Cheese Pretzel Burger; and Black and Blue Bacon Pretzel Burger.