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Hot Concepts! 2010: Shake Shack

Hot Concepts! 2010: Shake Shack

Fine-dining veteran puts upscale spin
 on classic burger stand

Making a great burger is often viewed as an art form, so it’s fitting that the Shake Shack concept began as part of an art installation at a park in New York City.

It was in 1998 that the idea for what is now the six-unit fast-casual burger chain began to take hold, according to Danny Meyer, founder and chief executive of parent company Union Square Hospitality Group.

“Its genesis was Madison Square Park’s revival,” Meyer said. “Shake Shack was an accidental evolution of what had begun as a hot dog cart. As co-founder of the Madison Square Park conservancy, we knew it wasn’t enough to make the park beautiful and safe again. We had to create a program that would make people use it.”

Meyer said the conservancy commissioned an artist to create an exhibit called “I Heart Taxis,” depicting two taxis on stilts. The installation was paired with a hot dog stand. To make the stand realistic, USHG agreed to supply food for it.

“We did [a few] products incredibly well: Chicago-style hot dogs with toppings, homemade potato chips and lemonade and Rice Krispy treats — that’s it,” he said. “It was just supposed to be a part of the art.”

But the cart was such a success, the community implored Meyer to bring it back even after the art exhibit was gone. He agreed and USHG repeated its effort in 2000. By 2001, the city’s Department of Parks and Recreation was looking for a more permanent food option and posted a request for proposals. USHG and the conservancy submitted a bid and won the contract.

“I thought about [concepts like] Steak n Shake, Fitz’s Rootbeer and Crown Candy Kitchen, and tried to come up with a place that would serve the same purpose, that kind of food,” he said. “And that became Shake Shack — classic, American food. A very inclusive menu [with] nothing challenging about it.”

USHG, the Parks Department and the conservancy hired an eco-friendly architectural firm to build the first outlet in Madison Square Park. The structure, which the Parks Department owns and USHG rents, would pay tribute to the roadside restaurants of the 1950s and 1960s. It debuted in 2004 to great fanfare and two-hour lines. 

The menu consisted of burgers prepared from a blend of freshly ground beef, hot dogs, shakes and ice cream custard treats. Beer and wine were added in 2007. The average per-person check is $12-$15.

Shake Shack

Owner: Union Square Hospitality Group

New York City

Market segment: fast casual

No. of units: six

States where 
located: New York, Florida
Systemwide sales: N/A

Avg. unit volume: N/A

Average check: 
$12-$15 per person

Year founded: 2004

Target markets: New York, other urban locations

Method of growth/funding: private

Shake Shack is different from anything USHG has operated before. The company is famous for running some of New York’s finest white tablecloth establishments, including Eleven Madison Park, Gramercy Tavern, Tabla, and Union Square Café.

Nevertheless, Shake Shack is run the same way as its more elegant cousins with a focus on quality and hospitality.

“It’s different in product, but not in [USHG’s] culture or how we do business,” said David Swinghamer, Shake Shack’s chief executive. “We’ve done nothing to
reinvent the hamburger except to do it in a way that offers the highest quality. Really, I think we’re taking a lot of what we learned with our fine-dining restaurants and simply applying it to our love of hamburgers and hot dogs.”

Shake Shack — which has three units in Manhattan, one each in Queens, Saratoga Springs, N.Y., and Miami, and two more planned in Manhattan — succeeds because of its commitment to its guests and the communities it serves, said chief operating officer Randy Garutti.

“Danny Meyer has 25 years of experience running some of the best fine-dining restaurants in New York City,” he added. “We’ve taken all of that and said, ‘Let’s turn fast food on its head and see how we can make it so much better.”

Contact Elissa Elan at [email protected].

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