A rapidly expanding West Coast burger chain is becoming Shake Shack's biggest threat
The California-based burger chain is is currently in the process of going from about 100 restaurants to more than 2,000. It also claimed Consumer Reports' top spot for the best-tasting burger in the country, beating out competitors like Shake Shack, In-N-Out Burger, and Five Guys.
Total revenue surged 57% in the third quarter, while cash from operations nearly doubled, meaning Habit is growing faster than Chipotle.
Meanwhile, Shake Shack has struggled to appeal to markets outside its native New York City.
Habit Burger Grill CEO Russ Bendel will reveal his company's secrets to success as the keynote speaker at the National Restaurant Association Show in May.
Bendel spoke to Business Insider about his company's strategy for dominating the highly competitive burger market.
1. Offering a differentiated signature product
The Habit Burger Grill's signature Charburger is different from burgers offered at other chains, according to Bendel.
"Instead of cooking on a flat griddle like competitors, we cook on a charbroiler," Bendel said. "Having a unique flavor profile distinguishes us from other burger chains."
Customers can also add toppings like grilled mushrooms, avocado, and bacon to their burgers.
2. Expanding the menu
Bendel says that burgers are make up only 60% of his sales.
In addition to Charburgers, Habit Burger offers sandwiches, including the popular fresh-grilled albacore tuna sandwich, crisp salads, and desserts like shakes, sundaes, and ice cream cones.
Offering a menu with healthy options has helped the restaurant chain appeal to women and families.
"We've gained a reputation as a female-friendly burger place," Bendel said. "Our menu helps us capture a broad customer base."
3. Investing in appearance.
The Habit Burger Grill invests more money in its restaurants than competitors.
"We always try make our restaurants a little more polished, with nice finishes and natural light," Bendel said.
The company invests an average of $750,000 remodeling its restaurants.
The Habit Burger Grill doesn't pass this cost on to customers. The average check is $7.66, lower than many fast-casual competitors.
"That slightly nicer environment paired with value helped take us to the next level," Bendel said.
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