By Ty McMahan; The Wall Street Journal Blog
Its fitting that a pair of hard-hitting, 300-plus-pound NFL offensive linemen favor the hamburger called the Smashburger.
The burger, made by the restaurant chain with the same name, starts with 100% angus beef shaped into a third- or half-pound ball thats dusted with seasoned burger magic. Its then smashed on a hot grill the same way Dallas Cowboys players Marc Colombo and Leonard Davis smash their opponents into the field on Sunday afternoons.
Im a pretty big guy so I eat a lot and Ive always been a fan of burgers, said Colombo, whos listed at six-feet, eight inches and 318 pounds. People may claim to have the best burger, but [Smashburger] really is the best burger around in my opinion.
Colombo enjoys the SmashBurger (with cheese, mayo, lettuce, tomato and sometimes bacon) so much he recently teamed with six-foot, six-inch, 353-pound Davis to open restaurants in the Dallas area. Colombo is a partner in five stores, while Davis expects to invest and participate in 30 Smashburger restaurants. The teammates have agreed to provide the capital to open the restaurants and share revenue with Smashburgers owners to operate the businesses.
We were playing in Denver and it was funny because on the way to practice we saw Smashburger and always wondered what it was, Colombo said of the duos deal sourcing.
Smashburger is a fast-casual better burger restaurant concept launched in 2007 and funded with $15 million by private equity firm Consumer Capital Partners. The Denver-based company just opened its 20th unit and plans to have 40 open by the end of the year.
For Colombo and Davis, Smashburger represents a life after football, having played in the NFL for nearly a decade. But for Consumer Capital Partners, Smashburger is a restaurant category around better burgers that fit between fast-food and casual dining they believe will grow to be a $30 billion market opportunity in coming years.
Burgers are Americas favorite food and its dominated by the three or four guys you can name on the tip of your tongue, said Dave Prokupek, Smashburger chairman and CCP managing partner and chief investment officer. Folks are fairly dissatisfied and the other better burgers out there are expensive. We saw a pretty big opportunity to offer a cook-to-order burger at a good price.
The group behind CCP has had some success in the restaurant business. The firm was founded and backed by Richard Schaden, founder and chairman of toasted sandwich chain Quiznos, and focuses on multi-unit retail businesses, primarily in the restaurant, liquor food, and leisure industries. The Smashburger concept was incubated within the firm and has grown quickly. Prokupek said 250 franchises have been sold and 100 stores will be open by the end of next year.
He said the concept works well in this economy as people look to scale down from casual dining restaurants like Chilis or Applebees, but still want a quality meal. He said the average check at Smashburger is about $8.
People have to eat, Prokupek said. Focusing on food and restaurants is something we like to do. Restaurants are a sexy space to invest, but almost as risky as investing in tech. The timing has to be right.
Prokupek said the companys biggest competitor is Virginia-based Five Guys, which now boasts more than 300 locations in 25 states. Thats up from five restaurants in 2001 when it first started offering franchises. VentureWire recently reported that Five Guys raised $10 million in equity funding toward a targeted round of $15 million.
Other restaurant concepts have also wet the appetites of investors. Maveron, a Seattle-based venture capital firm whose founders include Starbucks Chief Executive Howard Schultz, has invested in frozen-yogurt chain Pinkberry and Potbelly Sandwich Works, while Los Angeles-based Stone Canyon Venture Partners is an investor in Pinkberry competitor Red Mango as well as casual Italian restaurant chain Pasta Pomodoro.