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RESTAURANTS: Elevation Burger is latest chain to enter competitive market

Five Guys Burgers & Fries and Smashburger have already made their splashes on the West Coast. Hundreds of their gourmet burger joints are in various stages of development across the United States.

But now add Elevation Burger, a tiny chain of 20 restaurants trying to muscle into the $65 billion hamburger market, which opened its first franchise in the western U.S. in the suburban Bressi Ranch area of Carlsbad only two weeks ago.

Burger competition is heating up locally.

Lorton, Va.-based Five Guys, with more than 750 locations, has stormed the region with new restaurants opening this year in San Marcos, Encinitas and another planned for Vista.

Denver, Colo.-based Smashburger, with more than 100 locations, has opened stores in Del Mar, La Jolla and San Diego. Another is planned for Oceanside. It has a commitment from its franchise partners to build 463 units, and is on target to have 500-plus stores in the next few years.

There also is Culver City-based The Counter; San Diego-based Burger Lounge; Irvine-based The Habit Burger Grill; and, the privately held Islands Restaurants LP, a 50-plus store chain of tropical-themed eateries with headquarters in Carlsbad that has felt competitive pressure from a surge of gourmet burger rivals coming to compete on its turf.

Room to grow

Hans Hess, the founder of the Arlington, Va.-based Elevation Burger chain, says there is plenty of room to grow locally.

Hess has recruited Fransmart, a franchise development firm with operations in Irvine and near his first burger stores in Arlington, to help with the roll-out.

Fransmart CEO Dan Rowe, who helped with the expansion of Five Guys' first 200 stores, said he had frequently eaten at Elevation restaurants near his offices in suburban Washington, D.C., for a few years before he was able to convince Hess to franchise the concept.

In a phone interview with Hess from his vacation spot in Carmel, where he grew up with an early interest in restaurants from his father and older sister, the entrepreneur outlined plans to add five to 20 more of the organic burger stores in San Diego County over the next five years. Overall, there are 170 stores in development with 25 different franchise groups that have plans to open all of these Elevation Burger eateries over the next three to five years, Hess said.

Burger rules for Labor Day « Linkmeister

That’s from this story about the Five Guys burger chain and its adherence to standards.

Five Guys was founded in Northern Virginia in 1986, 18 years after I left the area. There’s a pattern here: In-N-Out Burger was founded in Southern California in 1948, but their big expansion didn’t begin until the 1970s, 18 years after we moved away. Even when I was going back and forth to LA in the 1980s I don’t remember seeing any of their locations in the West LA area.

Hawai’i isn’t a prime location for fast food chains. Oh, we have McDonald’s and Burger King and Pizza Hut and Taco Bell and Jack-in-the-Box, but the regional ones like Sonic and Tommy’s and In-N-Out and Five Guys haven’t expanded here. We have a few Carl’s Jr.’s, but the big growth here over the years has been the mid-range seated restaurants like Chili’s. We were seeing national ads for Red Lobster for years before one was finally opened out here.

I suspect one of the biggest reasons the smaller chains don’t come here is the price of land and land use, whether leased or purchased. The minimum space requirement for a fast food emporium seems to be between 2,000 – 3,000 square feet. At $1 – $2/sf per month, that’s $2K-$3K at the low end and $4K-$6K at the high end. That can be a big fixed expense off the top line. Add in the cost of electricity (which is 85% fuel-oil generated here) and water, and you’ve probably got $7-$10K/month you’ve got to get before you start adding in food cost and labor.

If we want to try the regionals we have to go to the Mainland. Maybe that explains why so many Hawai’i folks go to Vegas so often.

You’re not missing much by not having a Sonic in your area. I’ve eaten at a couple of their locations, and I am not really sold on their fare. I do like Hardee’s (aka Carl’s Jr), but the only location in my town is a good distance from my home, so I do not go there very often.

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