Burger Fuel New Zealand Restaurants performing well
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Burger Fuel said its stores in New Zealand have been performing well, posting a 2.6 per cent increase in sales on the previous year.
Burger Fuel, which has 56 restaurants in New Zealand, said sales have increased from last year but growth was less than what the company would have liked for the period.
Company chair Peter Brook and group CEO Josef Roberts said in a statement they will continue to focus on the opening of new restaurants in NZ for FY19 and update the market as the year progresses.
They said, however, that they will only undertake new openings if they can achieve both the right locations as well as the accompanying franchisees.
At this stage, the company said they are not undertaking third party home delivery, as over time they believe it will negatively affect both the brand and individual store profitability.
“This decision may have impacted our growth numbers, however we remain committed to a no delivery policy at this stage,” Brook said.
The company is in the process of changing from a single-brand international company to a multi-brand New Zealand company. The move was announced last year.
“This transition is going well and we are pleased that we have managed to absorb all the costs associated with this transition, as well as the costs to develop the new brands and provide an acceptable profit for FY19,” Brook said.
“This decision may have impacted our growth numbers, however we remain committed to a no delivery policy at this stage,”
“We will continue to focus on the opening of new restaurants in NZ and we look forward to updating the market with these new openings as the year progresses.”
Burger Fuel Worldwide posted a $1.2 million net profit for the year ending March 31, a turnaround from the previous year’s $463,000 net loss, as it transitions to a new business model.
Sales decreased 15 per cent to $21 million, mostly reflecting the sale of the company-owned store in the United States to founding director Chris Mason in March last year, while expenses dropped 22.7 per cent to $19.2 million.
“This internal change lowers revenue from our proprietary product manufacturing operation but will ensure that this business unit becomes more financially efficient,” the company says.
Total system sales, including both company-owned and franchised stores, fell 2.9 per cent to $102 million.
There were 78 Burger Fuel stores operating worldwide and two new outlets in New Zealand, one for each of the company’s new concepts, Shake Out, a new burger concept developed in-house, and Winner Winner, the chicken concept purchased by BurgerFuel Worldwide in December 2017.
Of the BurgerFuel stores, 56 are in New Zealand.
Questions & Answers
Q.Why did Burger Fuel’s overall sales decrease despite good performance in New Zealand?
Why did Burger Fuel’s overall sales decrease despite good performance in New Zealand?
Overall sales dropped due to the sale of the company's US store to a founding director last March. This also affected revenue from its proprietary product manufacturing operation.
Q.What is Burger Fuel’s current stance on offering third-party home delivery services?
What is Burger Fuel’s current stance on offering third-party home delivery services?
The company is not currently using third-party home delivery, believing it would negatively impact brand image and individual store profitability. This decision may have affected their growth numbers.
Q.How is the company’s transition from a single-brand international company to a multi-brand New Zealand company progressing?
How is the company’s transition from a single-brand international company to a multi-brand New Zealand company progressing?
The transition is going well, and the company has successfully absorbed all associated costs, including those for developing new brands. This has allowed them to provide an acceptable profit for FY19.
Q.What factors are influencing the company's decisions regarding opening new restaurants in New Zealand?
What factors are influencing the company's decisions regarding opening new restaurants in New Zealand?
They will only open new restaurants if they can secure suitable locations and find accompanying franchisees. This selective approach is part of their strategy for new openings.