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Johnny Rockets revs up to take on ‘better burger’ players

Editor's note: The story below is an updated version due to incorrect information provided at press time. For more details, read NRN's Q&A with John Fuller, where the chief executive of Johnny Rockets sets the record straight.

With fast-casual burger brands growing rapidly across the country, the 25-year-old Johnny Rockets chain has been upgrading its ingredients to better compete in the United States while it expands its Americana-themed brand overseas.

Johnny Rockets celebrated its 25th anniversary Monday and company officials were eager to highlight recent menu upgrades designed to help the chain compete against rapidly growing “better burger” brands like Five Guys Burgers and Fries, based in Lorton, Va., and Smashburger in Denver.

Ray Masters, Johnny Rockets’ senior vice president for purchasing and distribution, said the 295-unit Aliso Viejo, Calif.-based chain has upgraded its ground beef used for hamburgers.

Although beef prices are the highest since 1954, Masters said, Johnny Rockets was able to invest more in its burger meat because of savings in other areas. The chain locked contracts on fry oil, mayonnaise and other ingredients before prices increased, he said.

Other menu upgrades include the switch to larger potato roll buns, larger chicken breast tenders, and a shift from flake tuna to white albacore. Johnny Rockets also now serves an all-beef hot dog.

Because of higher commodity costs overall, however, Masters said the company is considering an increase in menu prices later this year in company owned locations.

Meanwhile, the brand is continuing its aggressive expansion overseas.

Like other U.S. restaurant chains across all segments, Johnny Rockets has been looking for international growth. The chain is in 16 countries and recently signed franchise agreements to open in the Dominican Republic, Russia and Libya.

In addition, Johnny Rockets is exploring opportunities in Indonesia and China, officials said.

The chain also is growing domestically. The newest location opened Monday in the South Street Seaport in New York. The franchised location features a new interior design, replacing the red, chrome and checkerboard features with warmer earth tones.

New company-owned locations also are under construction on Cannery Row in Monterey, Calif., and in Cincinnati. The latter will be a sports lounge variation on the Johnny Rockets concept featuring a full bar.

The Johnny Rockets chain includes two other sports lounge locations in New York and Los Angeles.

Masters said fiscal 2011 was Johnny Rockets’ most profitable year since it was acquired by private-equity firm Red Zone Capital in 2007.

Systemwide same-store sales were positive in fiscal 2011 for the first time in four years.

The chain began the fiscal year with same-store sales down 5 percent among domestic corporate locations, he said, but ended the year with comp sales up 4 percent.

Contact Lisa Jennings at [email protected].

Follow her on Twitter: @livetodineout

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