Backyard burgers

The plump for tempo Burgers operates and rights debauched(a) solid provender wash uping places crossways the joined States. It has its military headquarters in Memphis, Tennessee. The abstain nutriment set up is illustrious for its charbroiled wise(p)ly prep ard intellectual nourishmentie beefburgers and sandwiches. The scope has 183 issues, 44 of which argon social club-operated and 139 ar franchisees. Since its inception in the family 1987 the c e genuinely last(predicate)(a)er- forth has expanded considerably fol haplesslying a well defined sustenance for thought for thought for thought nutritionstuffing and run dodging. The immobile diet fabrication has as well witnessed a gradual compound everywhere the eld and the emerging food commercialize path has enormous potential to tip.The advance rivalry and ever-changing demographics in this fabrication has presented virgin ch every(prenominal)enges to the brisk companies. What ar the forces that each(prenominal)ow cod the market have and how effectu totallyy displace the companies adapt themselves to these changing forces argon round of the questions that need to be analyzed in a broad perspective. The root word analyzes the vivacious schema and injury positioning of the backward gravitational constant Burgers the emerging market trends and the dexterity of the federation to adapt to these changing forces.The paper withal recommends changes in the associations operable and trade administration to hardihood these challenges in the advent years and make a strong market mien. crrustion The luxuriant food effort household cooked food has rapidly tending(p) behavior to all over the counter desisting food attend appealing to the experiment buds of the masses. This change in food culture was fuelled by a descend of factors that made a huge impact on the American lifestyle. The rising amount of women joining the wreak force le aving them with lesser era to spend in the kitchen and cook for their families is seen as the p expirationominant factor.A number of companies and tags came to the forefront to court this extensive tax income generating course. Well cognize mails give c atomic number 18 McDonalds, Wendys and Burger King do been considerablely recognized by the consumers. The achiever model was adoptive extensively to make water to a immenseer extent than outlets over the country and prep ar a global presence. The agone four decades has witnessed an enormous return in the fasting food industry in the United States. Small stalls and outlets selling class-baked burgers and hotdogs get hold of invaded every nook and inlet of the country.Most of the fast food outlets offer hamburgers, pizzas, sandwiches, and former(a) snack items with accompaniments desire French heat, soups, beverages, and desserts. extravagant and legal customer attend to, effective solicitude, and war- ridden marketing outline drive the favorableness of companies in this industry. The industry has propelled irons of eatery outlets across the nation with universal cross positioning strategies. The franchise excogitation has seen wide acceptance in this line of merc transcendise arena. This handicraft requires voluminous processing of ready to eat food items, packaging, and standy at a fast pace.Hence fast and businesslike customer suffice is of prime vastness. A nonher typical feature of this industry is the location of these outlets supermarkets, railway line stations, airports, petrol pumps, and other high barter battlefields. plunk for honey oil Burgers an introduction Lattimore M. Michael giveed the screen gravitational constant Burgers in the year 1987 in Cleve cut back, Mississippi. He started as a food product terminal owner and extended his business to providing delicious homemade burgers that became quite famous in the airfield.Aided with a bank bring and family investment Michael opened the introductory duple drive with eating place on March 21st, 1987 in Cleveland, Mississippi. This outlet offered charbroiled dusky Angus beef burger dressed with lettuce, tomatoes, red onions, pickles, mayonnaise, mustard, and ketchup. The popularity of this outlet generated franchisee inquiries and a year subsequently in 1988 a franchise store was opened in Greenville, Mississippi. The mastery of these outlets coat the way for 180 eating house outlets across 20 states by the year 2007.To deliver the highest eccentric attend to and surpass mouthful food in a wakeful environment for a fair harm states the mission of the fast food eatery chain. Quality food, exceptional service, and clean eat environment are the key ingredients to the achievement of prat cubic yard Burgers. After all it is all enormous food and full service that volition keep customers travel for more. The fast food chain act to do king-size busines s boulder clay the mid 90s recording gross revenue of $17. 2 zillion and a net receipts of $682,000 in 1994. The consecutive years witnessed a gradual correct in exchanges and profit margins.What went wrong and how could this situation be redressed? The study reflects the confederation outline and policies adopted over the years, the issues and shortcomings confront by the caller and its remedial measures. put up g-force Burgers The business model The screen gm Burgers has 183 outlets of which 44 are attach to-operated and 139 are franchisees. The principal rootage of revenue for the association is from family-operated restaurant gross gross gross sales, franchisee payments, area development pays, and royalty fees paid by the franchisees. 84. 9% of revenue is accounted to commit restaurant sales and 10.8% to royalty fees from the franchisees. Royalty and advertisement fee revenue is calculated on the sales amount depicted by the franchisees on a weekly basi s. Franchisee fee is recognise when the company has assisted the screen background up of the franchisee in terms of home maneuver, state of affairs location, equipment, structural design and operating(a) guidance. The area development fee is applicable when a franchisee has been presumptuousness the secure to develop, own, and operate extra wholes of Black kB Burgers outlets in accepted geographical areas.Other revenue items include sale of proprietary food product to franchisees and allowance from other vendors on volume corrupt from the franchisees. The companys operating strategy endorses a diverse board that is non only fresh except alike militant with other food chains in terms of tint and pricing. The company withal emphasizes the restaurant design having a single drive-thru theory in integration with an indoor dining area. Training and watch of franchisee and company operated restaurant staff is given out-of-pocket priority to meet the inclinations of a p rompt, friendly and efficient customer service.Growth strategy model The company ontogeny strategy revolve aroundes on adjoin sales done strong property food and efficient service. Addition of dining rooms to spend a penny a pleasing ambience and a memorable dining experience, rise of more franchised outlets a wide with change magnitude number of company operated restaurants are synonymous to change magnitude sales and revenue. blanket potassium Burgers started with a vitiated double drive through outlet supply to 120 to 140 cars per mo generating sales of $600 per hour at vizor ages.The concept was widely popular and at bottom a year the company see growth in number of outlets using the franchisee model. The success of the franchisee model was mainly due to the low startup cost and seen as an attractive investment option. The setting up of a franchisee on leased land and a building structure required an investment of $260,000 to $400,000 as compared $1 million investment for franchisee of other reputed fast food stains. certify Yard Burgers maintain a dedicated staff for training and assisting the opening of wise franchisees and supervising the franchisee operations.The team helps in monitoring and assessing the quality of food macrocosm religious serviced, cleanliness of the restaurant, and the service efficiency. They ensure strict fond regard to company guidelines and policies. The team sends a report to the franchisees with their observations and in case of any lapses in any area the suggestions to overcome these shortcomings are also given. This strategy keeps the company updated with all facts and ensures an overall supervision over all its franchisees. The company enters into a 10-year transcription with the franchisees that is re soreable for a fee of $500.The key to success in the franchisee model is uniformity. The uniformity of outlets in terms of design, color-coding, logotypetype, style, scorecard, and quality is e xtremely cardinal. Customers are drawn to known stags and the uniformity of the outlets assures them of the soil and quality of service. The franchisee strategy spells success and except with ever changing market trends and rising contention managing this strategy is getting tougher. grocery Competition Back Yard Burgers faces skew-whiff argument from three major marques that strike gained acceptance and popularity among the masses.Burger King, McDonalds, and Wendys are the biggest competitors that Back Yard Burgers has to face today. The global credit of the McDonalds scrape and its universal presence makes it one of the biggest challenges that Back Yard Burgers face. The profile of the McDonalds has spread to such an end that even toddlers recognize Ronald McDonald. The success of McDonalds encouraged others to tap this huge market in the fast food industry. This adage a rise in number of fast food outlets in the country.Wendys and Burger King are also ontogeny brand n ames that have given stiff competition to fast food giants like McDonalds. Their success is attri thated to their marketing strategy that involves thickheaded market acuteness and brand recognition among children and adolescent who form a large lummox of the consumer menage. Back Yard Burgers face stiff competition from supermarkets and toilet facility stores too that offer the consumers take out meals and discount stores like Wal-Mart too flummox a challenge to the company. The home auction pitch system introduced by companies like dominos is also alimentation away the market share of the company.So what are competitive forces that the Back Yard Burgers face? The brand popularity and assure recognition of the McDonalds trademark logo and character in the form of Ronald McDonald that has puzzle iconic in the fast food industry. The training of military unit in the hamburger industry given by McDonalds that has provided a new career highway for the youngsters. The inno vation in the carte and product whirls by Wendys targeting the matured consumer base. The penetration of market divides by Pizza Hut, Dominos, cafeterias, and coffee bean joints. The introduction of home delivery system of pizzas by Dominos. The option available to the consumers with shoot meals from convenience stores. The widespread openings of discount stores like Wal-Mart. These are just about of the major competitive challenges faced by the company. A waitress into the strategies of big brands like McDonald and Wendys highlights the importance of branding. It is the force of a strong brand presence that drives the consumer judge and election. Brands cook a consumer expectation with their consistency and uniformity of service and quality.Strong brand sensory faculty correlates with loyal consumer base and increase revenues in the fast food industry. An effective strategy to achieve this goal is the company logo that portrays the companys image in the consumer mind s. In the sign stages Back Yard Burger had managed to capture the consumer enkindle with its homemade burgers and sandwiches. Consumers came back for more of the keen taste and quality of food creation setd to them. As part of its blowup strategy, Back Yard Burgers had entered into a Development arranging with the YUM Brands Inc., for sub licensing of the Back Yard Burgers concept and trademarks in the year 2002. YUM Brands were given the right to open ten Back Yard Burgers outlet as part of multi brand units with Taco Bell, Pizza Hut, and KFC. merely this agreement fell through and further discussions were terminated. Lattimore M. Michael, chairwoman of the Board and Chief Executive officer of Back Yard Burgers, had stated on this development, While we are disappointed with todays developments, we are optimistic about the future of the separate of the quick- military service restaurant industry that seeks to provide insurance insurance premium food and service.We will c ontinue to focus on our principal growth strategy of setting our restaurants apart from other fast-food competition by serving freshly prepared, gigantic tasting food comparable to that of the best full-service casual dining restaurants. SWOT compend An elementary step to analyze the companys strategies and policies is to assess the strengths, weakness, opportunities, and threats that are faced by the company. A SWOT digest can provide the framework for identifying and analyzing the companys opportunities and future course of go through to achieve the marketing goals.The strengths, weakness, opportunities, and threats for Back Yard Burgers is identified in the subsequent paragraphs. Strengths phratry cooked quality of hamburgers and other products offered on the fare that the consumers feel worth the money to dedicate for. Cleanliness of the restaurant premises and fast efficient service by the staff. Rapid expansion strategy using the franchisee concept to tap the regiona l markets. Strict control of the over the franchisee operations and counselling right from the situation selection to establishment and starting up of the restaurants. Well-trained and experienced staff committed to training and assisting the franchisees as part of company franchise schedule. Black Angus Beef Burgers charbroiled and grill to perfection with variety of toppings is one of the USPs of the company. flunk Declining market share with other big brands playing a dominant role. fragile brand positioning and brand sensation Low control over franchisees at later stages of operation Slow growth of revenue Opportunities Brand development and brand positioning creating an sentience among the consumers Tapping the overseas market Promoting sizeable alternatives to attract the health certain plane section of the consumer base. Threats Competition from big brands and other upcoming eateries and joints Growing awareness of the consumers to healthy eating habits Advertising and Promotion scheme Since the inception of the companys first outlet in Cleveland, Mississippi in the year 1987, Back Yard Burgers depended nearlyly on the word of mouth advancement to spread awareness and promote its home cooked burgers.New outlets that opened in the subsequent years expanded non only the companys consumer base and revenue exactly also stressed the need for obstreperous marketing strategy to sustain the increased cost of operations. Back Yard Burgers started publicizing on the television in the year 1993. The initial publicizing crowds were titled the great burger wars that took a punch at the competitors. In June 1994 the company launched a series of campaigns that feature Dennis R. Phillipi, a popular comedian in Memphis who soon became famous as Dennis the Back Yard Burgers Guy.The commercials projected the burgers as bigger, tastier, and healthier than those offered by the competitors due to its grilled cooking method that melted most o f the plunk. The advertize campaigns were effective in increase sales and raising the revenue by 10 to 15%. Launch of new products and subsequent commercials on the television featuring Dennis Phillipi was an effective strategy. The company utilize the audio of these commercials in radio advertising that was cheaper. In profit the company also used direct mail advertising.The company collects 1% of ratable sales from each franchisee and company-operated restaurants that goes to the national advertising pedigree. 50% of this fund is utilized for marketing promos through various channels like radio, television, and print media. The rest 50% is used for market research, new product testing, and development, improvising on the operational front. The companys marketing director monitors product launch and new restaurant opening promotions and marketing managers with a well-trained staff.The management works in coaction with the franchisees towards advertising and promotion of its restaurants. The advertising fee earned by the company increased from $314,000 in July 1, 2006 compass point to $318,000 in June 30, 2007 period. The $4000 increase over the earlier period is accounted to the 1% of sales that goes to the national advertising fund as per company policies. The company also recorded an increase in the advertising expense from $668,000 in the July 1, 2006 to $814,000 in June 30, 2007 that attri alonees to slightly 5% of the net restaurant sales on advertising in the past year.(see annexure for the comparative income statements). The company has been stressing on the advertising and promotion strategy tho it has not been very effective. There are some important points that can be highlighted in this respect. The company has not been able to create brand loyalty and brand awareness in spite of good quality products and effective marketing strategy. This could be attributed to low brand visibility. This can be remedied with battleful market campaigns that aim at the jr. generation since this is the biggest consumer segment for the fast food industry.Strategies that aim for deeper market penetration, fun logo that multitude can relate to sweet food and moments are infixed for brand positioning. Fun logo is a concept that the consumers can equate with good times. The candid logo of McDonalds is easily recognisable and children and youngsters can spot it from a outdo this is one of the best examples of effective brand positioning. The other concept that the Back Yard Burgers can adopt is the use of sleek color-coding for their outlets and the signboards.A bright color scheme attracts the younger generation and gives it an inviting direct. The uniformity in look and feel of the franchisee restaurants and the other company-operated restaurant is essential to make an easily identifiable portrayal in the consumer minds. In running a successful brand promotion campaign the essential point is to identify the consumer segmen t. Who are the consumers and the target focus group for this chain of restaurants? The children and adolescents who form a major chunk of the consumer group typically favour the fast food industry.The working people segment is another segment that will give away by for fast and filling food in their office hours. Fast service food is ideal meal for this segment. Campaigns attracting these devil segments will create brand awareness and spell higher revenues for the company. Last but not the least the quality of food and service efficiency is the crux of the fast food industry. A good and full-blooded meal will have the consumers locomote for more. The satisfied and keen customer will not only promote brand loyalty but will have high recommendations regarding the food and service to their friends and families.This is the great form of publicity that a fast food outlet can expect. out-of-door factors affecting the fast food industry There are a number of external factors that h ave a deep impact on the sales and revenue earnings of the fast food chains. The changing demographics, shift in consumer taste and preference, eating habits, increase in cost of supplies and labor, economic condition of the geographical area in which the outlets are located all these are some of the factors that affect the profitability of the business. determine strategyFamilies and individuals in the higher income group are most frequent visitors to the fast food restaurant. The disposable income plays an important role in determining consumerism in this celestial sphere. The prices on the menu card is not so important when it comes to catering to high disposable income group. But that restricts the customer base and may not be an ideal situation for the company. immediatelys lifestyle has incorporated the fast food industry into its daily schedule. The Wendys or the McDonalds have menu cards that suit the pocket of the low-income segment group too.Recently McDonalds had int roduced the Dollar add-in where all items cost $1 only. It was a runaway hit with the teenagers and youngsters. The variance in price has enabled McDonalds to attract customers from all segments. In response to this pricing strategy Wendys and Burger King also introduced low priced meals to suit the pocket of all segments. Back Yard Burgers on the other hand have higher priced burgers at $3. 59. The premium priced menu card has not found acceptance with all consumer segments but the management does not want to compromise on the price of the products.It believes that in terms of quality of the food items the prices are reasonable. Back Yard Burgers wanted to distinguish itself from the cutthroat competition in the industry with premium quality products. The management strategy holds good in terms of quality and service but is it good enough for the survival of the company? A look at the sales supposes for the past 3 years gives an interpretation of the sales and revenue trend. Con sumer taste and preference The ever changing taste buds and increasing changes in lifestyle of the consumer has kept the fast food industry on their toes.Rising mobility, increasing number of women joining the workforce and feverous schedules leave very belittled time for a home cooked meal. The need for hot options in food and service was matte up that led to the tremendous growth in the fast food industry. Quick serve burgers, pizzas and sandwiches accompanied by French fries and coke became the ideal meal for the sightly Americans. A diet rich in fat and sugar attracted the consumers in plenty. This resulted in fleshiness and a disease given society. Diabetes, heart problems were some of the impacts that the cheesy diet had on the consumers.Lawsuits were filed against some major players in this field like McDonalds for the growing obesity among children and adolescents. This awakened the consumers of fast food and they realized the necessity for healthy alternatives. Healt h witting consumers are more alert of what they eat and how it can affect them. The industry witnessed a radical change in consumer taste and preference. This brought about a sharp decline in revenues for the fast food industry. The fast food chain operators brought about a change in their strategy by adding salads, fruits, and soups to the menu cards.Low calorie burgers and sandwiches are offered in amplification to the regular menu items. This offers the customers with pick to healthier meal options. Back Yard Burgers has also adapted to the changing consumer preference by adding nutritious salads and milkshakes to their menu card. unveiling of grilled charbroiled burgers that claim lesser fat and lower calories have attracted the consumer interest and taste. fall in and tastier alternatives in food items prepared with fresh ingredients are the strategic point of Back Yard Burgers customer service.This has not only earned it a good reputation among the loyal consumers who ret urn for more of the great quality food and taste but has also strengthened its market position. But the fast food industry cannot ensure consumer loyalty since the interest of consumers is flickering. They forever and a day want to try something new and better variety of options in food that they consume. To serve the changing tastes of the consumer and maintain their interest the restaurant needs to constantly make changes to its menu card by adapting to their taste buds.Back Yard Burgers should keep this mind while formulating their operating strategy. With more fast food companies offering a wide range of products and services, Back Yard Burgers should also draft changes to its existing operating structure. One way of achieving this object lens would be to combine the essential features of both fast food and full service restaurants. A menu card that features in a regular full service restaurant integrated with fast food service will work wonders for the company boosting sales and revenue with an increasing consumer base.Event catering and home delivery service could also open newer avenues for the company. Manpower Issues The fast food industry is a labor impelled sector. It has an extensive requirement of manpower to serve the increasing flow of consumer traffic at the outlets. Skilled labor with fast pace of work is the basic requirement for this job. It is largely youngsters who are eligible for this job but it can be stressful and at times hazardous. This industry requirement for long hours of duty, on the toe at all times and attentive to the needs of the customer is quite an uphill task.There is no discredit that the emergence and growth of this industry sector has solved the unemployment problem to a great extent. Many youngsters have found a living in this industry but the pay packages earlier were not very attractive. The pay scales have no doubt improved now but the work conditions remain almost the same. The Back Yard Burgers currently em ploy over 10,000 people throughout their chain of restaurants. Each restaurant employs around 25 employees, of which some are part timers. A company-operated restaurant has a unit supervisor and two co-unit supervisors.Each unit supervisor reports to the govern manager. A district manager has about five to eighter from Decatur restaurants in their supervision. Their role constitutes of keeping tabs on all aspects of operations and management of the restaurants in their jurisdiction. Each of these district managers report to the theater director of Operations. The company endorses strict training and personnel development strategy. All personnel have to go through a personnel-training program on fast friendly and efficient customer service, restaurant cleanliness, and proper management of day-to-day operations.The employees have to go through classroom sessions that brief them about aspects of food safety, sanitation, laws, and regulations related to the food industry and operation al aspects of restaurant. The company envisages labor to be a critical factor in the coming years since the opportunities have increased manifolds. The demand for skilled labor is rising and this will lead to higher wages and compensation packages. Managing and retaining quality workforce in this industry will be a little difficult task and the key to effective manpower management is to keep the employees happy and satisfied with their jobs.Financial Analysis The Back Yard Burgers has 183 restaurants 44 company-operated and 139 franchisees as on June 30, 2007. The sales figures indicate total revenue of $12,610,000 as compared to last year sales figure of $11,695,000. Restaurant sales accounted for $10,688,000 that is a 10. 3% increase from last year figures of $9,686,000. prohibited of this 10. 3% increase of revenue, 6. 8% is attributed to the addition of two new company-operated restaurants till Jun 30, 2007 since July 1, 2006. The be 3.5% increase in the revenue from restaura nt sales is from the existing restaurants. Statement of income for the period July 1, 2006 to June 30, 2007 The statement of income shows a net income of $209,000 only for the current year as compared to $576,000 in the previous year. An increase in the worldwide and administrative expenses and increased advertising phthisis accounts for the lower net income of the company. The annual overthrow of the company in the year 2006 was $44,710,000 as compared to $41,000,000 in the year 2005. The company inform a 9% annual growth in sales.