Bad Daddy's Breaks Through the Burger Mold
A good concept can work even in an auspicious time. In 2008, the U.S. economy was staggering during the throes of The Great Recession. Many consumers were batting down the hatches and focusing exclusively on necessities. Yet, that’s exactly when Bad Daddy's Burger Bar got its start in Charlotte, North Carolina, and managed to survive. Dennis Thompson and Frank Scibelli, both who started and had success with other eateries, founded the restaurant.
Despite the timing, Bad Daddy's not only survived but grew, with stores being opened in Colorado in 2013. In May of 2015, Thompson and Scibelli sold Bad Daddy's to Good Times Restaurants, Inc. The Colorado-based company owns, operates, and licenses Good Times Burgers and Frozen Custard restaurants, a regional chain of quick-service restaurants. Boyd Hoback, president and CEO of Good Times Restaurants Inc., says the company was, "looking for another growth concept." After checking out a number of restaurant concepts, a connection was made to Thompson. "We evaluated Bad Daddy's and thought it could be a nice niche concept operating at the top end of casual theme, similarly positioned as Good Times is in [quick service]. We liked the quality of the food, the energy, and particularly the unit economics."
When Good Times purchased Bad Daddy’s, there were 13 units. By the end of 2018, there will be 35 Bad Daddy's. The heaviest concentration of stores can be found in North Carolina and Colorado. Hoback says the goal for the company-owned Bad Daddy's is to open eight–10 new locations per year. Most of the new locations will be in the Southeastern U.S.
This past year, Bad Daddy's generated $75 million in systemwide sales. Average-unit volumes were $2.6 million and average checks $18 per guest. To date, Bad Daddy's has managed to increase same store sales every year since it was acquired by Good Times, and has reported positive same-store sales for 13 consecutive quarters. This past period, Q3 of fiscal 2018, comps grew 0.5 percent over the prior year’s increase of 0.1 percent. But that included a 1–1.5 percent hit from cannibalization in the Charlotte market resulting from the brand's fifth restaurant in the area that it opened at the beginning of the fiscal year. The unit exceeded the chain's new store sales target by nearly 25 percent during the quarter. Earlier in the year, Bad Daddy’s said new units were averaging $54,000 per week, or 12.3 percent above the system average.
Four additional restaurants opened during the final quarter of the year: two in North Carolina, one in Greenville, South Carolina, and the brand's third restaurant in the greater-Atlanta area.
Growing and distinguishing the brand in the crowded burger market is a challenge. Bad Daddy's has three things that enable it to stand out, executives say: A Bad Ass Bar, High Energy Hospitality, and Artfully Crafted Food.
Bad Daddy's has an expanded bar that includes a wide selection of locally crafted microbrews. "We have 24 taps which includes the best craft beers we can find within each restaurant’s trade area,” Hoback says.
Bad Daddy's is also a high-energy environment. When inside a location, you'll hear 70s and 80s rock music pumping through the sound system.
Finally, and most importantly, Hoback says, "It's all about the food—quality and uniqueness of the food."
Hoback describes the food at Bad Daddy's as artfully crafted with simple ingredients but executed at a high level. "We focus on upscale higher-quality food and have a largely scratch kitchen, which includes scratch-made sauces and dressings and good creative recipes." At Bad Daddy's, the company believes offering high-quality food is essential, particularly in this day and age when many people like to consider themselves a foodie and everyone’s an online critic.
Ultimately, though, Bad Daddy's is a burger restaurant and doesn’t stray from that core, and everything it entails. And for Hoback, who has been in the burger business since he was 16, the goal is simple. "We want our customers to think of us for having the best burger. Everything else is secondary."
The secondary points have also been well thought out by the brand, however. "We are committed to the full service, full hospitality model. The goal is to offer radical hospitality and be highly personalized," Hoback says. Bad Daddy's mostly pins its locations to the inner and outer suburban rings, where the restaurant “brings cool to the suburbs.”
The restaurant's typical customer might surprise you. Firstly, Hoback clarifies that Bad Daddy's is not a sports bar or a late-night bar. Upper middle income is the sweet spot, and the crowd skews upscale because of the average check ($18 per person). The clientele tends to be a bit more male. At lunch times, you'll find business people while the dinner crowd is primarily families with children 5–18.
Bad Daddy's strives to be the non-chain chain. "Each Bad Daddy's has its own feel and is tied into the community in some way. We offer some customization via the local food, offering different recipes and local brand partners and have monthly chef specials featuring local ingredients," Hoback says. Bad Daddy's also involves itself in local charities and schools to shed that conglomerate feel and connect with each community on the ground level.
In order to keep its finger on the pulse of its customers, Bad Daddy's is heavily engaged in social media. Hoback says, "It’s the primary way we communicate with our customers." The brand posts daily, respond to every review, and comment when appropriate. In order to encourage reviews and feedback from customers, Bad Daddy's makes a donation to No Kid Hungry for each comment generated from its customer receipt comment line.
As Big Daddy's remains on a steep growth trajectory, the worry is about growing too fast, Hoback says. Questions such as how do you keep an edge to the concept, how to keep its culinary forward while avoiding the institutionalized and commoditized approach are ones they grapple with. However, the brand’s plan revolves around what’s helped it stand out from day one.
"We feel confident about our future,” Hoyback says. “We'll continue to zig when the others zag."