Colorado Restaurant A ‘Smash’ In Flat Economy
Smashburger was created about a year ago by the founder of Quiznos, another Colorado company.
Consumer Capital Partners invested millions to launch Smashburger. Brooke Wagner asked that company’s Managing Partner and Chief Investment Officer, Dave Prokupek, what makes the restaurant such a “smash.”
“It’s something everyone can afford once or twice a week and they can fit into their budget,” said Prokupek. “For eight bucks, you can have a great meal. Our goal is to be everyone’s favorite hamburger place. That’s kind of our rallying cry.”
Smashburger is aggressively chasing the “better burger” restaurant category, up for grabs in the United States. Prokupek said the plan is to grow from the current nine stores to 500 in the next four or five years. Hamburgers are America’s favorite food, according to sales figures. They seem to be a little luxury we are willing pay for, even in tough times.
“When the stock market’s down, I’m thinking, we’re going to have a bad day…but we have a great day,” Prokupek said. “Hamburgers got invented right before the Great Depression, and it was the fillet mignon (of the time). We totally see this quality of food as a pick-me-up.”
Smashburger opened its flagship store in Glendale last year. Burger chefs use a unique stamping tool to “smash” the beef patties onto the grill, searing in juices and flavor, according to Prokupek.
“We’re offering a quality of burger you’d get at a sit down at the speed you’d get at a QSR (quick service restaurant), at a price point that’s only a buck, buck and a half more than what you’d get at a fast food joint,” said Prokupek. “People like having a real knife and fork and having people serve it to them.”
Prokupek built a 20-year career navigating rough financial waters, and has served as a source for the Wall Street Journal. He said we can all learn something from Smashburger’s success in an economic downturn.
“The takeaway is, there were some long decades of prosperity and tough…and prosperity…and tough, and you can look back and people had jobs and families. They retired, they traveled and went on vacation, but in terms of the stock market, it was a wild ride,” Prokupek said.
Prokupek is carefully watching the market for his investors, and had some predictions that differ from other “experts.”
“We believe there’s a 30 percent chance the market will get worse. Our 70 percent scenario is, the market will stabilize, housing will bottom in the middle of next year, job loss will be not too bad, and we’ll be off to the races,” Prokupek said. “We think most people should only have 20 to 40 percent in the stock market. Conventional wisdom might be 60 or 70. If you’re already fully invested, you kind of have to sit tight.”
Prokupek also recommended paying down a mortgage with any extra cash. He explained his opinion on the two shoes left to drop in this economy.