6 issues for $14.97 Subscribe Now
Subscribe via RSS Feed

Hot & Fresh Success

[ 0 ] Jun. 29, 2011 | SBO Editor

Better burger niche cooks up a tasty $59 million fortune!

The restaurant business can be a tough one. But it’s obvious that Michael Ansley has figured things out. At 40 years old, he’s one of the nation’s largest Buffalo Wild Wings franchisees and in 2008 he became a franchisor himself with the opening of the first Bagger Dave’s Legendary Burger Tavern, a unique, full-service, ultra-casual restaurant and bar concept.

In conversation, Ansley uses phrases like “a happy employee translates into a happy guest” and “we will just have to do it better than everyone else.” He says, “I know what it’s like to be on the other side,” when talking about the franchisor/franchisee relationship.

Of course, finding success as a restaurateur is considerably more complicated. But for a guy who worked as a product manager for an adhesives and sealants manufacturer right out of college, Ansley has figured out that excelling at basic tenets helps one go a long way in an ultra-competitive industry.

Ansley is president and CEO of Diversified Restaurant Holdings, Inc., (OTCBB: DFRH), the holding company formed in 2007 whose portfolio today includes 14 Buffalo Wild Wings restaurants in Michigan and seven in Florida. Likewise, Bagger Dave’s, with four company-owned locations in Michigan, has been approved to franchise in its home state, as well as Ohio, Indiana and Illinois. Plans call for opening three Bagger Dave’s locations in 2011 and a total of up to 24 new locations over the next five years.

“We saw the burger craze starting to heat up, so after looking at all the players we decided to start a concept that focused on fresh burgers, but with more variety and food choices that would set our concept apart,” Ansley said. “We didn’t stop with the food. We also focused on a warm, unique atmosphere with full table service and a bar. Our memorable guest service tops it all off.”

Atmosphere is equally important at Bagger Dave’s. Besides being inviting for adults and kids alike, every restaurant is a reflection of the town it serves, with a localized décor with historical photos displayed throughout. There’s even an electric train that runs above the dining room and bar areas.

Ansley says Bagger Dave’s fills a niche in the “underdeveloped, mid-range price point sector” between fast food (Five Guys, Smash Burger) and casual dining (Red Robin, Max & Erma’s).

“The ‘better burger’ concepts are competitors with us on some levels, but mostly during lunch. I believe we have set ourselves apart when it comes to dinner and weekend business,” said Ansley of Bagger Dave’s, which draws 40 percent of its business during the dinner day part. “As for the segment at large, burgers are always going to be popular, but given the size of the segment, which is about 15 percent of all restaurant sales, I believe there is still plenty of room to play. We just have to do it better than everyone else.”

Having a propensity for doing things better than everyone else is nothing new for Ansley. He was responsible for opening the first full-service Buffalo Wild Wings restaurant in Novi, Mich., in 2002. Previously, the chain had featured only counter and takeout service. Ansley’s store went on to lead the BWW chain in sales from 2003 to 2006.

With 21 BWW restaurants already open in Michigan and Florida, DRH’s area development agreement requires a combined total of 38 BWW restaurants in the two states by 2017. Such experience lends Ansley strong credibility with prospective franchisees that few other young franchise concepts such as Bagger Dave’s possess.

“Most importantly, I know what it’s like to be on the other side,” Ansley said. “Franchisees are entrepreneurial at heart, so they can add invaluable insight as Bagger Dave’s evolves. I would hope that my experience and our philosophies would give potential franchisees a sense of comfort.”

Bagger Dave’s is seeking development partners experienced in multi-unit management who are able to commit to opening at least two restaurants. “We are looking at one market and one good operator at a time,” Ansley said.

BAGGER DAVE’S MARKET POSITION

Intended to fill the niche between fast food and casual dining, Bagger Dave’s provides quality food at a fast casual price point in a full-service environment. The “better burger” niche is among the fastest growing in the restaurant industry, yet still has plenty of room for expansion. The “better burger” segment represents only about two percent of the $65 billion burger market—according to Technomic, a food industry consulting and research firm—and is expected to continue to have double-digit sales growth.

The average per-person bill at Bagger Dave’s is about $10-$11. Business by day part: Lunch, 33 percent; mid-day, 27 percent; dinner, 40 percent. Formed in 2007, Diversified Restaurant Holdings, Inc., (OTCBB: DFRH) is the owner/operator and franchisor of Bagger Dave’s and a leading franchisee of Buffalo Wild Wings. DRH had sales of $45 million in 2010 with 2011 revenue expected to

be $59 million.

For more info:

Diversified Restaurant Holdings, Inc.

Bagger Dave’s Legendary Burger Tavern

27680 Franklin Rd.

Southfield, MI 48034

(248) 223-9160, ext. 106

www.diversifiedrestaurantholdings.com

www.baggerdaves.com

Category: Magazine, Start Your Own Business, Start Your Own Business Fall 2011