When your name is Smashburger, you'd better have a pretty nifty game plan to compete with McDonald's.
This is one of the toughest challenges that many small, young companies face: How to compete with the goliaths? It involves much more than just being nimble. In the case of 6-year-old Smashburger, a Denver-based better-burger chain that also competes with fast-casual rivals Panera Bread and Chipotle, it's really about having a gee-whiz way of doing business that helps it stand out.
USA TODAY recently spent a hectic lunch hour with CEO David Prokupek, 50, at a Smashburger in Fairfax, Va. He explained how and why he believes the chain, which has opened 200 stores in five years with sales of $250 million, can within five years become a 1,000-unit chain with sales of $1 billion.
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Never mind that, at $10 to $12, a meal at Smashburger will typically set folks back $2 to $4 more than a meal at McDonald's. Here's how Prokupek says he hopes Smashburger will outfox Ronald McDonald:
Better food. Smashburger doesn't just sell burgers - but better burgers made with certified Angus beef, fresh avocado and multigrain buns. Instead of just one bun, it lets customers select from four artisan bun offerings: egg, multigrain, spicy chipotle and even brioche.
It goes deep on fries. Besides conventional fries, Smashburger also sells sweet potato fries, chili cheese fries, and the house-specialty Smashfries, which come tossed with rosemary, olive oil and garlic. Then, there are the Veggie Frites. These are for the ultra-health-conscious - flash-fried carrot sticks and green beans, seasoned with pepper, that can serve as a better-for-you replacement for French fries.
Oh, did we forget to mention the fried pickles?
But key is figuring out how to create and sell a better burger, Prokupek says. "There is still no truly national player making healthy and fresh better burgers," he says. Sure, there are some big regional players like Five Guys and In & Out Burger, but no one's grabbed the brass burger ring. "We want to become the Starbucks of burgers," he says.
Better drinks. For Smashburger, better drinks is all about reaching well beyond soft drinks to other beverages not common to fast food. Take beer. Each location sells local craft beers and, for $9.99, a so-called "Bucket" (4 bottles) of domestic beer. The beer offerings lift the chain's evening business, when, unlike most fast-food restaurants, it does nearly half of its business, Prokupek says.
Then, there are the shakes and malts - all are all made with Häagen-Dazs ice cream. The newest: a Peanut Butter & Jelly shake it rolled out this summer. When shakes are brought to the table, customers also are handed the canister that the shake was made in - with the remainder of the shake.
Next? Smashburger is considering blending Häagen-Dazs sherbets into drinks, Prokupek says.
Better prep. This is where Smashburger stands out from the crowd - and the origin of its wacky name. Each burger begins as a rolled-up "meatball" of one-third-pound Angus beef. That meatball is slapped on a grill, where it's literally "smashed" with a custom-made spatula that presses it onto the grill. This process, Prokupek says, sears in the juices so that the burger cooks in its own juices - so it's more tasty.
Every burger is made-to-order. While that virtually guarantees a fresh burger, it often means a considerably longer wait time than at most fast-food joints. Prokupek says that Smashburger is working on a system to slash the current, average wait time from six minutes to four. But that's still about twice the industry average wait time of closer to two minutes.
Savvy marketing. Smashburger has a minuscule advertising budget and only recently began to do a little regional radio and some very localized TV spots. So it relies almost 100% on social media buzz. Each time it enters a new market, it contacts social media trend-setters like restaurant bloggers and "mommy" bloggers who influence where consumers eat. Then, before the restaurant opens its door, it invites the bloggers in - as a group - to demonstrate how the food is prepared. But it isn't just some assistant manager who meets and greets the bloggers - often it's Prokupek, or another top executive from Smashburger.
Cool look. The stores don't look plastic. In fact, the food - which is brought to the table, so folks don't have to stand around and wait - is served in a stainless-steel wire basket, not in a paper bag. And folks get a real knife and fork (not plastic) to eat with. A lot of thought goes into the store lighting, too, which looks more like the kind of direct lighting you'd expect to see in an art gallery than in a fast-food joint. And artsy-looking photo murals in each restaurant are localized.
Local skew. Smashburger's mission is to think and act local. Every market has specialized burgers created for and sold only in that market. In the D.C. market, for example, there's the Capital Burger, which isn't made with lettuce but baby arugula. It's also got grilled onion, aged Swiss cheese, applewood-smoked bacon, tomatoes and mayo and is served on a brioche bun. Or, there's the Brooklyn Burger in the Brooklyn, N.Y., market, which is topped with grilled pastrami and served on a pretzel bun with yellow mustard.
Consumer buzz. Barbara Johnson is the essence of the Smashburger customer. The Chantilly, Va., resident, who runs a non-profit, is a rather finicky eater and has stopped going to McDonald's. "I don't find McDonald's very appetizing," she says.
On this day, Johnson drove about 30 minutes from Chantilly to take her teenage daughter, Lauren, out for her first Smashburger. Johnson had tried a Smashburger while in Texas a while back - and was ecstatic to discover this one within driving distance. Just how many McDonald's did she pass on her way to Smashburger? Johnson closes her eyes and thinks for a moment, then utters a number that makes CEO Prokupek beam: "Four."
Bruce Horovitz, USA TODAY