It’s been a capstone year for Denver-based Smashburger. The chain, known for its cooking style of ‘smashing’ burgers on the grill, was recognized by Forbes magazine as America’s Most Promising Company.
At Smashburger’s helm is David Prokupek, a Wisconsin native whose business roots are seeded in finance, investment banking and retail soil. As a self-proclaimed “serial entrepreneur,” Prokupek has taken his business acumen and applied it to the foodservice industry as Smashburger’s leading man. He found out about the Forbes ranking sitting at one of the company’s restaurants for lunch.
“For the team, it was a nice validation of the work that’s been put in along the way,” he said. “The culture we’ve built is a strong one.”
Although Smashburger is privately owned, the company recently disclosed to analysts that 2011 sales reached $115.7 million, a 72 percent increase over 2010. While the chain’s ownership is mixed — 58 percent franchise owned and 42 percent company owned — Prokupek estimates that growth will come primarily from new franchisees.
Moving forward, the overall company strategy is to maintain its innovative focus, both in the quality of food it delivers and the customer experience diners have come to expect.
1. Smashburger had seven locations open in 2007 and has grown to 150 since then. To what do you attribute its success?
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We have been one of the fastest growing concepts in history thanks to phenomenal consumer acceptance around our award winning burgers and the good things that go with them, a fun and affordable dining experience, and a management team, capital and business model to pull it off. Smashburger brings a fresh approach to the $100B burger category and further “smashes convention” by partnering with highly experienced multi-unit franchise operators that collectively run over $1B in restaurant sales and operating under a “one Smashburger” model that lets us move quickly and effectively as one team. Our commitment to innovation will help us set the pace for years to come.
2. You mentioned in a separate interview that 2011 was really a capstone year for the restaurant chain. How so?
2011 was a phenomenal year for Smashburger. From being named America’s Most Promising Company by Forbes Magazine to continuing to win “best burger” awards in towns across America, and expanding our social media and marketing prowess — it has been great to see our smashed fresh, served delicious burgers and our business model be recognized as some of the best. 2011 also marked tremendous growth for Smashburger as we collectively grew system-wide sales 3% to over $115.7M and opened 51 new units across the United States. In addition, we signed our first international agreements for restaurants in the Middle East, Canada and Latin America where we’ll open locations later this year.
3. How has the better burger category aided in Smashburger’s growth since the economic downturn in 2008?
With burgers being America’s favorite food — the burger industry was starved for innovation as consumers lacked a better dining option that paired fresh, made-to-order burgers with an experience conducive to their busy lifestyles. The recession amplified our growth plugging into a long-term trend of providing great food, fast and affordable — stealing share from casual dining and quick service alike. Smashburger is a fresh approach to not just “better burgers” but to the fast casual segment as a whole. We will continue to set ourselves apart from the competition with not only award winning burgers but signature chicken sandwiches, black bean burgers and salads that are as great as our burgers — all for around $8-10 and 25-minute dining experience.
4. What’s your response to people who want to compare Smashburger to some of the other successful national chains?
It’s only natural for people to compare Smashburger to other successful restaurants in our segment. From our perspective, it’s great to see the impact our 4-year-old concept is having on not just ‘better burgers’ but the fast casual industry as a whole.
5. Last year, the company announced Smashburger’s international growth. How do you think the international markets are reacting to the better burger category?
We believe burgers are as big outside the United States as inside and the trends for great food fast are on the rise globally. We couldn’t be more excited to debut our smashed, fresh-served, delicious burgers to the international community. We have been fortunate to team up with some incredibly seasoned franchise partners who have a wealth of international experience and bring local knowledge and insight to the table. In working with them, we have discovered that there is a strong desire for premium western brands, and with Smashburger’s fresh, innovative menu and solid growth, we fit that bill.
6. Regionalized menu items have been well received for the chain. Why do you think consumers have responded so positively to that menu positioning?
Smashburger’s localized menu items have really become a hallmark of our brand that allow us to celebrate regional tastes and connect us to our guests in every community. I think customers really appreciate the effort we put in discovering the unique flavors of their area, and this allows us to set ourselves apart from other national chains.
7. What impact has the Forbes ranking had on the chain?
Being named America’s Most Promising Company by Forbes magazine was a huge honor that we were incredibly excited and humbled by. It has helped raise awareness of the Smashburger brand in consumers’ minds as well as the business community. Franchising continues to be a crucial piece of our growth strategy and a ranking like this helps tremendously as we look for partners with multi-unit experience to help us develop inside and outside the United States.