The Counter, a Culver City burger joint known for its customizable meals, is making some customizations of its own after following the same recipe for a decade.
The franchiser’s menu, which features up to 300,000 mix-and-match sandwich options, is in the process of being revised. The changes come on the heels of an interior design revamp set to be completed by the middle of next year of most of its 38 franchised and three company-owned restaurants.
Counter Co-Chief Executives Jeff Weinstein and Craig Albert called their effort to shake up the chain’s look and taste part of the brand’s evolution. It’s an evolution that runs against the old “If it ain’t broke, don’t fix it” axiom.
Though the company won’t disclose annual revenue, Chicago market research firm Technomic Inc. estimated Counter’s 2012 sales at $67.5 million – 20 times the estimated $3.2 million in annual sales Weinstein told a trade publication the company had in 2006 when it had just two restaurants.
Still, the pair said they wanted to update and refresh their concept before it begins to go stale.
“What customers wanted 10 years ago is different from what customers want now,” Albert said. “It’s time we take a look at the look and feel of our stores.”
Rather than pursue a top-down approach to the process, Weinstein and Albert have involved franchisees in the process, minimizing the risk of alienating their main revenue drivers.
Menu tweaks include leaner protein options like bison burgers for health-conscious diners, additional appetizers and pairing burgers with sides instead of having them come a la carte.
The décor change, however, is one of the more dramatic changes the chain has made since it started franchising in 2006, Albert said. Recently opened locations feature an updated, warmer and cozier design, a departure from Counter’s modern industrial look of steel chairs on concrete floors. About one-quarter of its existing locations have been updated so far, with the balance scheduled to finish remodeling next year.
The new look, which was influenced by customer and franchisee feedback, includes brick walls, wood floors and chairs with wooden seats.
It is a marked change from an environment Albert said some customers complained looked and felt too cold – sometimes literally. Customers wearing dresses felt that the steel chairs were too cold to sit on.
Still, the stores’ color palette and feel remain similar, he added.
“We wanted to retain the look without reinventing the wheel,” he said. “It’s been positively received and what we wanted. Everyone loves the Californian ambience.”
That Californian ambience comes with a hefty price tag. Weinstein said renovations range from $50,000 to $150,000 a store, depending on the size. Typical Counters are between 2,700 and 3,000 square feet, and franchisees pick up the renovation bill as part of their franchise agreement. On top of a $50,000-per-store franchise fee, most outlets cost from $750,000 to $2.4 million to build out, depending on size and if they carry a liquor license. Buying into the concept also requires franchisees to open three locations.
It’s a financial burden some consultants have a hard time understanding.
“If I were a franchisee, why do I have to spend this money on renovations when I don’t have to?” said Jerry Prendergast, a restaurant consultant with West L.A.’s Prendergast & Associates. “I want some say in when and how long to require a renovation like this.”
Franchise law attorney Barry Kurtz with Woodland Hills’ Kurtz Law Group said franchisees often know what they’re getting into, but some accede to pricey changes like those required by the Counter because they desire to work with a well-known business.
“A mom-and-pop franchisee could be very excited to get into the system even though it could very well be expensive,” Kurtz said. “Generally, franchisors do renovations on renewals, every five years or so. Some franchisors have the ability to require upgrades at any time. But most won’t require something in the first five years that will be horribly expensive.”
Still, Weinstein, who said he started the chain 10 years ago because he was “tired of being told what to order at restaurants,” and Albert, a former investment banker who joined the Counter in 2005, are satisfied with their chain’s decadelong development.
“It’s been like watching children grow up,” Albert said. “Just ask how Jeff feels about seeing the Counter sign spin around in Times Square.”
Weinstein smiled at the thought.
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