After completing the acquisition of Anthony’s Coal Fired Pizza in Nov. 2021, BurgerFi International now sees the opportunity to add more brands to its portfolio, CEO Ian Baines said during the company’s presentation at the ICR conference in Orlando on Monday.
Though no further details were given on what categories the Fort Lauderdale, Fla.-based burger chain might be looking into to expand its reach, Baines emphasized the success of consolidating the 60 Anthony’s locations into its portfolio, citing the $2 million in back-office synergies both companies were able to create.
“We wanted to take BurgerFi, which had from a consumer acceptance perspective, has a strong offering and very distinct brand, and drive growth in that brand,” BurgerFi CFO Michael Rabinovitch said during Monday’s presentation. “The acquisition of Anthony's at the time was opportunistic. Given that they were recovering, and it was an acquisition that we bought from private equity we look at inorganic growth as an opportunity now […] to look at brands for more acquisitions.”
In fact, currently Anthony’s is outperforming its parent brand as BurgerFi’s same-store sales have slumped, and three-quarters of the company’s P&L is from Anthony’s (which was fully corporate-owned, as compared with BurgerFi’s robust franchising program) . During the ICR presentation, Rabinovitch said that he expects the negative same-store sales to continue in the first half of 2023 and improve in the back half.
The synergy between both brands is also seen through marketing and franchising efforts, as there has been a lot of cross-promotional effort between both brands. When BurgerFi announced that Anthony’s would begin franchising at the end of 2022, there was a ready-made pool of franchisees from BurgerFi’s current partnerships.
“Anthony's business is now about 50% off-premises, which is similar to BurgerFi, so we were able to shrink its footprint,” Baines said. “We streamlined the menu, and introduced a gas-enhanced coalfired oven, which is much easier for operations. The combination of these things really set us up for franchising […] One of BurgerFi’s early franchisees has already signed up for a multiunit Anthony's franchising opportunity.”
For both brands moving forward, technology and customer access will be the key to growth. BurgerFi has seen a 10-12% increase in average check from in-store kiosk orders, and Anthony’s has been able to mitigate some labor challenges by utilizing AI phone banks for pizza orders placed via the phone instead of just online.
Despite some bumpy roads, both executives were optimistic about the future, particularly with macroeconomic challenges like labor turnover rates:
“The flow of candidates is getting stronger, and the quality of the candidates seems to be improving also,” Baines said. “Previously, people seemed to be ready to jump ship very quickly. We’re seeing that 30-60-day turnover rate improve significantly.”
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