Creation Smashburger was founded in 2007 by two
fast food industry veterans. Tom Ryan had previously helped to develop the
stuffed crust pizza concept for
Pizza Hut and later served as chief concept officer for
McDonald's, and Rich Schaden was a former owner of
Quiznos. The restaurant was envisioned to highlight a higher market for
hamburgers, as a part of a wave of "better burger" restaurants including
Shake Shack, which uses similar techniques. It adopted the name Smashburger, Ryan later said, because the name "had this really great hand-crafted connotation, which we do. It also kind of had this organic, earthy, commonly popular approach, and it had a little edginess to it, for younger [generation] people." With $15 million in capital, the two bought a Denver restaurant, Icon Burger, to experiment with cooking and management techniques for a higher-end burger restaurant. The founders then spent six months developing an efficient and fast "kitchen engine", designing the restaurant's kitchen to have modular surfaces, and with a central
griddle that houses a refrigerated area underneath where meatballs are stored. This allows the burger cook to be properly supplied without having to walk away from the griddle. The kitchen concept was later adapted and standardized for every Smashburger location. The restaurant's signature "
smashing" technique is achieved with a special cutter and technique, which also allows it to train new cooks quickly and open new locations without having to redesign the back-end process. Marketing for the restaurants focused on the customizability of the menu, freshness of ingredients, and features to give each restaurant a local feel. The chain's first marketing revolved around the tagline "Smash, sizzle, savor". In 2011, as the business was growing at a steady clip, it shifted its theme to "Smashed Fresh. Served Delicious." The restaurant identified 14 distinct customer
archetypes to pursue based on income levels, geography, education and lifestyle. While it initially relied heavily on
social media to build its brand, the company started television and radio advertising in 2013 with Denver-based Definite Productions as a marketing manager. It later hired one of the executives from that company as chief marketing officer. The restaurant chain grew to 143 locations, half of which are franchises, and it had $54 million in annual
revenue by the end of 2011. That year, it was reported to have as many as 450 franchise agreements in the books. That year it announced plans to open new locations around airports in
Kuwait,
Saudi Arabia and
Bahrain through franchises. It had grown to 312 stores with 7,000 employees in early 2015. In mid-2016 this had grown to 365 locations. By mid-2017, this had grown to 380 locations in 38 U.S. states and nine countries, of which 220 were company owned and the rest were
franchises. The success of Smashburger and other specialty burger restaurants is credited with taking market share from major fast food brands like McDonald's, even with Smashburger's burgers selling at higher prices. Where McDonald's was considered the market leader for casual dining, it saw a sales drop of 2.4 percent and a 15 percent drop in
net income in 2014, the first decline in those figures in 33 years. Changed consumer tastes, in particular Smashburger's popularity, was credited, because of a customer perception that Smashburger's food was of higher quality and more customizable. Still, Smashburger commands a relatively small portion of the larger U.S. market for burgers. The restaurant had an estimated 0.2 percent U.S.
market share in 2014, compared to 1.4 percent for
Five Guys and a combined 71 percent for McDonald's,
Wendy's and
Burger King. In 2015, Smashburger CEO Scott Crane again suggested the company could prepare for its own IPO at some point, saying it had until that point grown 20 to 25 percent and that it was adding 60 to 80 restaurants a year. Its CEO said the decision to sell would mean more stable long-term growth as opposed to relying on the stock market, which could be unpredictable. Following this, Smashburger began additional advertising, renegotiated leases for some of its restaurants and launched a subscription-based
rewards program platform called Smash Pass in order to increase customer traffic. as well as offering specials like a pass that allows customers to buy a $1 burger a day for 54 days in a bid to build loyalty. It also introduced new menu items including a turkey burger,
tater tots and a "triple double", although the latter prompted a
copyright infringement lawsuit from
In-n-Out Burger, as well as a
class-action lawsuit for
false advertising. The restaurant faced difficulties in continuing to grow, in part as shoppers began to shift away from shopping in traditional retail centers where its restaurants were concentrated. At the same time, larger restaurant chains increased their efforts to grow sales and brought on higher-quality menu items to compete with Smashburger and restaurants like it. Subsequently, Smashburger saw its overall
same-store sales decline as a number of other local "better burger" concepts grew. It also bought back some franchise restaurants in several major markets. Smashburger competitors like Shake Shack and Five Guys experienced many of these difficulties, as well. In 2016, Smashburger was estimated to have $338.3 million in sales. On 13 February 2018, Jollibee increased its ownership stake to 85 percent of Smashburger in another $100 million deal. In making the acquisition, the companies said the move would allow Smashburger to further expand its presence in
southeast Asia. ==Restaurants==