News

Culver's prototype cuts construction costs

November 12, 2008

LOUISVILLE, Ky. — Culver's Franchising System Inc. has opened its 390th restaurant, the fourth of its new prototype that includes a new exterior and redesigned dining room.

* Click here to view a slideshow of the new Culver's of Louisville.

The new restaurant is located in Louisville, Ky.

Culver's of Louisville

Changes to the exterior in new markets include a roof design that replaces the brand's signature blue metal roof.

Culver's president and chief operating officer Phillip Keiser said the change was sparked by zoning laws in new markets that prohibited metal roofs. The company examined the depth of the brand identifier and realized the blue roof had little or no meaning to customers in new markets.

"We looked at, well, what's truly essential to the brand," he said. "A lot of people have an emotional connection to the blue roof, but it's the ButterBurger, it's the people in the restaurant, that's what makes it."

The blue roof was also expensive, adding $100,000 to construction costs — and rising real estate costs, Keiser said. As the company looked at how to build the restaurants to be more efficient on a smaller footprint, it realized the metal roof no longer fit with the new model.

The company also examined how to improve the seating capacity and efficiency of the dining room. The new prototype allows for more seating on a smaller footprint — about 4,000 square feet — than previous stores.

The redesign includes moving the customer drink station to an outside wall to improve traffic flow and replacing a few tables with high-backed booths — as well selecting warm blues for the carpet and trim for a new look.

Keiser said the company came up with its front of house redesign after surveying its vendors and construction crews for ideas. The high-backed booths were added to create some intimacy, something the previous design lacked.

"We kind of call our old look that kind of cafeteria feel," Keiser said.

Culver's of Louisville owner/operator Jason Behnke said the new dining room is more appealing.

"Customers like it a lot more," Behnke said. "It gives a little more privacy."

Keiser said Culver's has added about 22 stores in 2008, two more than last year. Next year, the chain's 25th anniversary, franchisees should open 28 stores — bringing the chain's total past the 400 mark. All but nine Culver's are owner/operator locations.

Keiser said the economy has not affected plans for openings in 2009 because those stores have been in the planning stages for some time. As credit lenders have tightened their requirements, "it's made it a little more challenging," but Culver's franchisees are still getting financing.

"They may have to jump through a few more hoops or figure out a way to come to the table with a little bit more capital," Keiser said.

Behnke is typical of franchisees who have several partners to create a stronger financial package. Culver's requires owner/operators to own 25 to 50 percent of the operating entity.

"If they were just sliding in before they probably can't get it in today," Keiser said. "It takes a little deeper pocket, a little better balance sheet in capitalization for folks to get (financing) today."