Andy’s Burgers, Shakes & Fries, based in eastern North Carolina, has hired a franchise company to expand beyond its state borders into Virginia, South Carolina and the Southeast. The ’50s-themed casual-dining chain currently has 98 restaurants.
The franchise program is the first major step for the Goldsboro, N.C.-based burger chain to open new restaurants outside its home state.
Kenny Moore, who founded the chain in 1991 with $500, said a new Andy’s restaurant that opened in December 2010 is on track to earn $1.3 million in sales in Charlotte. That along with the solid performance of stores in small North Carolina cities was enough evidence to begin ramping up franchises outside the state.
“The reason we’re doing the expansion is that the Andy’s we just put in Charlotte is our number-one store. And very few people in Charlotte had a clue what Andy’s is [before it opened]. That really opened my eyes,” Moore said. “We’re 20 years old. This is not an overnight thing we’re rushing into.”
At the Charlotte location, which is in a Walmart shopping center, “We haven’t gone below $100,000 a month,” Moore said. “That’s a lot of $6 meals.”
The 98 Andy’s sprinkled across east North Carolina earn an average volume of about $500,000, which spans from $350,000 to $1.3 million, he said.
The expansion doesn’t mean Moore wants to take on burger giants such as McDonald’s, Burger King and Wendy’s. With an average check of $6 at Andy’s, Moore said it’s slightly higher than the quick-service players but less than the casual-dining brands.
Moore acknowledged that the “better burger” category is filling up with brands such as Five Guys. But he says Andy’s occupies its own niche as full-service, sit-down restaurants with a ’50s theme located in modest cities.
“The main point that differentiates us is that we go into smaller communities. That uniquely positions ourselves,” Moore said.
He says there’s still enough room in the competitive burger category. “If people want to eat healthy and low-fat, they do that at home,” he said.
In the small town of Pink Hill, N.C., which has about 1,000 residents, the local Andy’s earns about $600,000 in annual sales.
With successful sales in small cities like Pink Hill and larger ones such as Charlotte, Moore hired Franchise Dynamics in Chicago to expand the brand beyond North Carolina. Moore said Andy’s has received more than 100 franchise inquires from Washington, D.C., to Texas.
Starting an Andy’s franchise costs about $150,000 to $225,000, including the franchise fee, Moore said. He also owns a restaurant equipment company, so he can shave about $10,000 from the franchise costs.
“They’re paying me a royalty fee, so I don’t want to nickel and dime them up front,” Moore said.
Moore owns 48 of the 98 Andy’s restaurants, and said 30 of the franchisees that operate the stores were former minimum-wage employees who worked up the ladder. Moore himself worked at the chain’s first store in Greensboro flipping burgers for its first two years.