Five Guys debuts its first burger restaurant in HK. While Shake Shack is opening its second shop in PP Mall after IFC Mall. Is selling burgers a very profitable F&B business? How can a burger restaurant be profitable in HK?
Five Guys, an international burger restaurant from USA, will open its first shop in Hong Kong. It has set up 1,500 shops around the world in previous 30 years. Hong Kong is Five Guys’ first burger restaurant in Asia.
Shake Shack HK, under operating licence by Maxim’s Group, will open its second shop in Pacific Place Mall. The first restaurant is in IFC Mall.
Other restaurant brands like The Butchers Club and Beef & Liberty, are selling burgers as their signature dishes in menus. How profitable are restaurants selling burgers in Hong Kong? What are the major success factors of a profitable burger restaurant?
About Five Guys
Five Guys started operation in USA 30 years ago. Its founder, Jerry Murrels, followed his mother’s proposal to sell good hamburgers and make money in America.
Five Guys was set up in Washington, DC area since 1986 when Jerry and Janie Murrell offered sage advice to the four young Murrell brothers: “Start a business or go to college.”
The business went well. The Murrell family opened a carry-out burger joint in Virginia.
In early 2003, Jerry and Janie, with the “Five Guys,” began offering franchise opportunities. In just under 18 months, Five Guys sold options for more than 300 units. The overwhelming success of franchising a local restaurant made national news, with articles in trade publications.
30 years after Five Guys first opened, there are almost 1,500 locations worldwide.
About Shake Shack
Shake Shack is an American fast causal restaurant chain based in New York city. It started as a hot dog food cart inside Madison Square Park in Manhattan in 2001.
Its business grew fast. Shake Shack moved to a permanent kiosk in Madison Square Park after 3 years. It expanded the menu from New York-style hotdogs to one with hamburgers, hotdogs, fries and its namesake milkshakes.
Shake Shack is expanding quick in America and overseas. Its footprints are now covering 162 international locations across 12 countries and 20 in USA plus Washington DC.
Maxim’s Caterers Limited, a subsidiary of Maxim’s Group, has got an authorised licence to operate Shake Shack HK. The first shop of Shake Shack in Hong Kong was opened inside IFC Mall in May this year.
Shake Shack is typically located in stand-alone restaurants and shopping malls.
Why Burgers become popular in Hong Kong?
Burger is simple fast causal food. Easy to make and sell quick. It becomes more and more popular worldwide.
Nowadays, casual dining restaurants have added more burger items to the menu to offset higher beef costs, while quick service chains have launched more burger items.
Burger is a budget-friendly option, easy and quick to eat. It’s one of the favourite foods in metropolitan cities like Hong Kong.
People in Hong Kong are usually working in long hours. With one-hour’s lunch break. Burgers become a popular lunch meal or even dinner, or happy hours.
Many restaurants are now providing a number of burger items on menus. Price depends on quality of burger ingredients, restaurant location and service.
Some restaurant operators told Lacrucci that sales from burgers have increased in recent years. Customers are willing to pay higher for better quality burgers. This trend is expected to continue in the future.
How can a Burger Restaurant be profitable in Hong Kong?
Operating a restaurant is never simple and easy, especially in a city like Hong Kong with high rental and operating costs.
We believe that a burger restaurant will be profitable in Hong Kong if the operator can
- control the current and renewal rental cost at a reasonable level
- control the food costs and other operating costs
- maintain food quality and standard
- hire and keep quality staff
- bring the brand to lead the market trend and market share
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