Miami – Burger King restaurants are ready to join the 21st century.
A new prototype that opened in June at one of franchisee Magic Johnson’s restaurants in Miami’s Liberty City neighborhood aims to borrow a page from the Starbucks’ playbook and create a place to hang out.
Gone is the circa-1980s decor with the brown floor and nailed-down furniture. Instead, think industrial chic complete with high-top tables, plasma televisions, cobalt blue lighting fixtures and an etched glass noise buffer depicting a hamburger, fries and a Coke.
While the new look is expected to attract customers, the big selling point for franchisees is the economics. The new restaurant has half the seats and is about 30 percent cheaper to build than the old-style Burger King, which costs an average of $1.1 million, not including land costs. In an era of skyrocketing real estate prices, the new format also needs only half the land.
“It’s rare that you can take costs out of things and still end up with a better product,” said John Chidsey, Burger King’s president of the Americas.
Michael Mathis and his fiancée, Rashawn Kemp, like the change. The Miami couple pass by other Burger King restaurants to come and eat at the one in Liberty City about once a week.
“It’s the new era,” said Mathis, 28. “It’s a 2005 look. It’s clean. The service is faster. The employees smile more and greet you as a loyal customer.”
The idea for the updated format came as Burger King’s new management team started looking carefully at franchisee profitability.
Chidsey and his colleagues didn’t see the point of building restaurants with seating for 80 or 100 people when more than 70 percent of customers order their food to go. They concluded that franchisees were wasting money building burger palaces that their customers weren’t using.
But before designing a smaller store, management decided to test the theory. Cameras were planted in restaurants in Miami and several other markets to see how many seats were actually used.
The results: During an entire month, there were never more than 25 or 30 people in a restaurant at one time. That’s why the new format has only 40 seats, compared with 85 or 100 in a typical old store.
The hope is that by improving the return on capital investment, franchisees will be more inclined to build new restaurants. It’s up to franchisees whether they want to build the new model or the old one.
“This is just one option,” Chidsey said during a tour of the Liberty City store, which was rebuilt on the site of an old Burger King. “But I think you’ll see a majority of the new restaurants end up looking like this.”
In addition to the smaller seating area, the new restaurant also includes a smaller kitchen designed to improve speed of service. Gone is the extra space that everyone joked was big enough for a racquetball game and left employees running to assemble a customer’s order.
“We have made changes that let us be a lot more efficient,” said Jim Hyatt, executive vice president for global operations. “There’s also a labor savings of close to 2 percent. To a franchisee, that’s real dollars.”
After viewing a full-scale model of the new prototype at the franchisee convention in May, about 60 franchisees have already expressed interest. About a dozen locations are expected to be open by the fall.
