Brothers Burger Restaurant

Brothers Burger Restaurant has spearheaded the proliferation of tasty and ultimate flame-grilled burgers. Since then, Brothers Burger has been a synonymous to quarter pounder burger. Brothers Burger boasts of proprietary recipes for its burgers to the delight of its customers. Furthermore, outstanding customer service and superb food have generated clamor and apparent demands, which only the Brothers Burger franchise can provide and satisfy. Brothers Burger projects that 80% of the company’s sales will generate from the sales of their specialty quarter pounder burgers and burger dressings. Brothers Burger boasts of its nine proprietary burger patty flavors. The flavors are: Original, Spicy, Cheese, Sour Cream and Cheese, Hawaiian Barbeque, Teriyaki, Cajun, Onion Cinnamon, and Pepper Steak. Brothers Burger will open in Croydon soon, which is home to African and Caribbean races. Its slogan will be: “Burger for Every Brother!”

Brothers Burger ensures that the flame-grilled burger patties are made fresh-to-order, and served steaming-hot. However, Brothers Burger promotes its specialty – the quarter pounder burger as its main entrée. Brothers Burger focal point of the restaurant is its servings of flame-grilled burger patties with a variety of flavors; lives up to its monicker “Pound for Pound Burger Experts”. The plethora of flavors of its flame-grilled burger also augments the broad market appeals of the Brothers Burger franchise. The restaurant also serves a wide-array of delicious sides.. Even though the quarter pounder burgers are the meal itself, Brothers Burger offers a bevy of sumptuous and delicious side dishes as well such as Idaho potato french fries, classic potato salad, chilled carrot sticks, hot rolls, and bourbon double-baked beans. Thirst quenchers include a wide array of wine and beers.

Current Marketing Situation

In order to entice more customers, Brothers Burger has incorporated a classic diner landscape yet keeping it modern and sporty with its amenities. Eventually, Brothers Burger will begin franchising in 2009 in order to add more stores in the United States. Franchising is a significant part of the Brothers Burgers growth. The appropriate location of a Brothers Burger restaurant is essential to a franchise owner’s success. Brothers Burger has proven that an appropriate location is one of the keys to success of the company. Brothers Burger’s professional real estate team ensures that aspects such as traffic patterns and flow, demographics of the area, types of development, and a number of other factors are considered and assessed in order to generate opportunities from a target location.

Brothers Burger has ascertained that they have a different market segment compared to T.G.I.Fridays and Chili’s, which sells individual meals and for families. On the other hand, flame-grilled quarter pounder burgers tend to draw people with similar interests such as the World Cup Soccer and other sports events.  A myriad of factors makes Brothers Burger an appealing prospect for franchisees. The menu itself is an enticing factor for people to inquire for a franchise. This suggests that the Brothers Burger marketing strategy is not difficult to manage for those who intend to avail a franchise, yet lack prior food service experience. Furthermore, restaurants with small menus tend to have lower labor costs compared to other restaurants.Today, Brothers Burger has grown from a small restaurant to one of the country’s vastly- proliferated specialty restaurants. Being the pioneer of the flame-grilled burger restaurants in London, the company anticipates its development and progress for it to bolster revenues.

SWOT Analysis and Comparative Advantage

                                                 Strengths

• Brothers Burger is the pioneer of flame-grilled burgers in Thornton Heath Croydon Area
• Brothers Burger boasts a wide array of burger and burger dressing recipes, which will cater to an eclectic group of customers.
• Brothers Burger is not only considered a family-oriented restaurant; it is actually host to groups who share the same interest like sports event.

                                               Weaknesses

• Since it’s strictly a big burger specialty restaurant, Brothers Burger is limiting its menu to burgers and a number of side dishes that some restaurants already have.
• Brothers Burger is only synonymous to quarter pounder burgers, which suggests that customers can be confused that it only serves quarter pounder burger.
• Franchising could be considered a weakness as well, due to the fact that Brothers Burger cannot deliberately supervise a franchise outlet.

Opportunities

• Brothers Burger has engaged in franchising and royalty transaction, which is aimed at promoting the restaurant.
• Locations have proven that Brothers Burger can generate a myriad of opportunities like celebrity athlete endorsements since burgers have a huge demand from male sports fanatics and young professionals as well, it will complement Brothers Burger’s advertising and promotion.
• Brothers Burger incorporates an apt sense of franchising and catering services, which generates subsequent opportunities.

Threats

• One of Brothers Burger’s threats is the emergence of take-out and delivery burger specialty restaurants; these restaurants are apparently taking advantage of Brother’s Burger success.
• Brothers Burger is threatened by the emergence of big quarter pounder burger meals at T.G.I.Fridays and Chili’s.
• Brothers Burger’s franchising can also experience a letdown in its franchising deal whenever a franchising outlet does not manage the outlet in an appropriate manner.

Marketing Strategy and Objectives

            As a franchise owner for Brothers Burger, you should keep in mind that Brothers Burger’s marketing concept is brief and precise. Brothers Burger incorporates the concept of burger patty flavor options that will entice diverse market segmentation. This generates revenues for Brothers Burger, which it owes a lot to its efficient and charisma. Brothers Burger’s marketing strategy has generated 90% of food sales from burgers and side dish of french fries. Though it may sound easy to moderate the supply and the orders; high volume of orders and variations of kitchen space have been crucial factors that Brothers Burger considers in its operations. It’s always a challenge whenever a customer orders 100 burgers. It’s a standard imperative that product and the service should be done in a perfect manner. This suggests that Brothers Burger’s marketing strategy with its narrow product offering.

The focus of Brothers Burger’s marketing strategy is undoubtedly to proliferate its wide array of burger patty variety to its diverse customer base. Furthermore, it is looking forward to existing multi-unit franchisees to complement its entrance to potential new markets. The initial invesment for a Brothers Burger franchise is from £181,500 to £250,000, which includes a one-time franchise fee of £20,000. 5% of gross sales will constitute the current royalty. Food and paper prices constitute 34% of operating costs. The price of burger has catapulted to new heights, which will mean a consequent increase in prices. The increase in ground beef price is beyond the company’s control due to the fact that cattle meats are a market-driven commodity.

            We chose to use the customary pricing strategy based on competition for our burger business.  With this pricing strategy, we will price our items within the range of our competitors. By pricing our items at or around the pound amount of our competitors, we will not lose price-sensitive customers. This strategy will be the most effective for our target market – British African Communities in Croydon. Croydon residents in London are projected to spend on average £11-20 a week eating out; our prices must fit into this range. In order to do this, we will price our burgers at £5.00 and £1.00 for a beverage.  Our goal is to create a comfortable environment in which students wish to relax and “chill out”.  Therefore, our prices must reflect this relaxed attitude and provide students with what they need at the prices they can afford. By using a set price, we add ease of payment and decision to the benefits of our customers.

The use of the customary pricing strategy does not allow our competitors the advantage of price because we will be within their price range.  Instead of attracting customers with a lower price, we will compete with other restaurants through the quality of our product.  Our target market, the British African and Caribbean communities, listed price as the main factor when deciding where to eat; however, quality was a close second.  By offering higher quality than our competitors in the same price bracket, we plan to have the competitive edge. We also plan to offer a large menu variety, yet we will keep a standard of £5.00 for all items with an additional charge for extra ingredients or specialized items.  While there are numerous quick service restaurants that offer a large variety, these restaurants price at varying amounts, as well. This factor will distinguish our business from our competitors who do not offer set pricing.

            As previously stated we will charge £5.00 for all standard burgers.  Standard burritos include pre-thought options and a build-your-own option.  If customers wish to add extras, there will be a 50-cent charge.  Drinks will come at a standard size at £1.00 each.

Break-Even Point

            The survey results to calculate the number of burgers sold.  Our survey results suggest that 54% of the students surveyed ate out 1-3 times a week; so a conservative estimate for total population would be about 3-4 times a month, or once a week. Therefore we calculated that 5,000 (people) x 4 (times a month) = 20,000.  Considering competition, we decided that our market base would be approximately half of that (20,000 / 2 = 10,000). Based on food and other costs we decided the appropriate price per burger to be £6.00.  Therefore we calculated the chicken wing revenue (10,000 x £6) to equal £60,000 per month in “seasonal” high times. We figured an appropriate approximation of this population would be 50% of our normal population.  We then figured the chicken wing revenue in down times to equal £30,000/month (5,000 x $6).  Projected total burger revenue over a 12-month period we calculated to equal £600,000.

            To calculate beverage revenue, we further assumed that 75% of our population will order a beverage (different from water) along with a burger (10,000 x .75 = 7,500) and, again, approximating 50% of total in down times (7,500 / 2 = 3,750).  We figured an appropriate price per beverage was £1.00, based on costs and our competition’s pricing. Therefore I projected total beverage revenue, over a 12-month period, to equal £112,500.

            With a monthly total of 10,000 customers, we expect to see anywhere from 83-220 customers on any given day.  I further predict to have two main “peak times” during the day; lunch and dinner in which we forecast 40-110 people within those three hour periods.  I believe that our capacity to provide our product will meet the needs of our consumers based on our target prep time. With multiple orders being prepped simultaneously, we estimate being able to serve up to a max of 40 people an hour and based on our survey, about 50% of those people will be eating inside the restaurant.  Based on the size of our burger restaurant, and this statistic, we will be able to meet our capacity of take-ins versus to-go; about 80 people inside the restaurant per hour.

Marketing Action Plan for Brothers Burger

            Our product will be positioned ahead of competition in the mind of our customers specially the students in Thornton Heath in Croydon through concepts of food variety and a socially inviting ambiance. Since the Croydon is home to an eclectic group of races such as African and Caribbean, The slogan will be: “Burger for Every Brother!” The slogan is important because this is what people will remember and what will be imprinted their mind when choosing a restaurant. The sales promotion will communicate to our target market our unconventional burger restaurant. The advertising message will utilize our slogan as well distinctive features and benefits of our restaurant. The message will say what we are- a chicken wing restaurant, what separates us from our competitors- our variety and atmosphere, our location, and our hours of operation. The hours of operation will be made bold on flyers and to go menus because our weekend is a feature and benefit of Brothers Burger. Our overall message in each type of sales promotion conducted will convey what our restaurant is all about and let potential customers know what to expect by providing a who, what, why, when, and where.

For our direct marketing, I will have designed flyers for our restaurant to post around the community. The flyers that are going to be posted in Thornton Heath in Croydon will be round with our logo in the center, and it will cost £200 to produce 200 of them. The flyers will all have the same information: our name, Brothers Burger, with the sub-heading of “Brothers Burger”, our location and hours, logo, and features and benefits. By posting flyers the potential target market will become familiar with our restaurant name and logo and be provided with all the information they need to gain awareness, interest and evaluation to prepare for trial and hopefully adoption. The sales promotions we will use consist of sampling, coupons, and continuity programs. I will use these methods because we believe they will not only build clientele, but also keep customers coming back for more. I will know how effective coupons are because customers who want to use them will be bringing them in. I can total how many are returned versus how many are given out and find out if they are worth the time and money. Sales promotions will be run at the beginning, middle, and end of the school year. Extra specials and coupons will be utilized during the summer when business is slow.

 Budgets and Variables

Brothers Burger is projected to be in a strong financial position.  Start-up costs are projected at £272,344 for the first year. Sales revenue for the first year is projected at £712,500.  This shows that there is the ability to cover start-up costs with marginal profit to cover all other operational related expenses.  The break-even point will occur within the first year.  Based on the industry averages for major corporations in this industry with net profit margins of 3%-15% our business has a strong position with an estimated 30% net profit margin.  This estimate is significantly higher compared to major corporations because as a small business we have much lower costs to manage.

            As for first year cost, the total will be £272,344; these costs mainly include depreciation of equipment, utilities with deposits, promotional cost, and inventory for the first year. These costs are known cost for establishing the business, but do not include many operational costs.  Break-even, as stated before, will occur within the first year. Fixed costs are £150,456, and contribution to profit per unit is 5.1%, this will result in breakeven at the 29,500 2nd units.  Based on this, break-even will occur on the third month.  Projected revenue for the first year will be £712,500 with a net income of £217,182.  This results in a net profit margin of 30%.  The revenue is derived from the sales projection of 10,000 units for the months of January through May, and September through November based on survey results. The remaining months are projected with 5,000 unit sales. We estimate that 75% of the sales will be accompanied with a beverage in addition to a burrito, so total revenue is estimated including this projection which is based on survey results.