Fatburger chain partners with digital food-ordering company GrubHub.

Fatburger’s Bet for Taking on Shake Shack and Five Guys: Burger Delivery

Fatburger’s Bet for Taking on Shake Shack and Five Guys: Burger Delivery

Business Insider
Analyzing the top news stories across the web
Nov. 17 2015 4:32 PM

Fatburger’s Bet for Taking on Shake Shack and Five Guys: Burger Delivery

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Dealing with humans to get your dinner? Unnecessary.

Photo by RIZWAN TABASSUM/AFP/Getty Images

This post originally appeared on Business Insider.

In the restaurant industry, little is hotter right now than fast-casual. And within the fast-casual space, nothing is hotter than burgers.

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Smashburger and Five Guys are on international expansion sprees. Shake Shack has become constant fodder for conversation for foodies and financial analysts alike. Even McDonald's is trying to upgrade its options, with the fast-casual-inspired Create Your Taste platform that offers upscale ingredients like guacamole and ciabatta rolls.

To succeed in such a crowded market, burger companies need to set themselves apart—which is exactly what Fatburger is trying to do.

Last week, the burger chain announced a partnership with the digital food-ordering company GrubHub. Fatburger customers can now order delivery from 75 locations on GrubHub’s platform. GrubHub will also deliver directly in 24 locations, the first partnership of this kind GrubHub has made with a restaurant chain since the company entered the delivery business last February.

The partnership is part of a broader attempt by Fatburger to tap into the delivery business, without sacrificing the money and effort necessary to organize its own delivery services.

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"We're engaging with brands in ways I don't think anyone would have thought they would a few years ago," Thayer Wiederhorn, Fatburger's vice president of marketing, told Business Insider.

According to Wiederhorn, Fatburger franchisees had already been testing GrubHub services independently. The company is additionally in discussions with Postmates, an app-based delivery service that delivers big-name chains such as Chipotle and McDonald's, in select areas.

The company also partnered with Uber Eats earlier this year in Los Angeles, with the transportation company delivering burgers to customers for a limited period of time.

But the most important partnership Fatburger is hoping will set it apart from the competition is internal. In 2011, Fatburger's parent company, Fog Cutter Capital Group, announced plans to purchase the Marietta, Georgia-based wings chain Buffalo's Cafe.

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Since the purchase, the two chains have begun mixing their offerings and cobranding locations. According to Wiederhorn, sales at cobranded locations have increased by about 30 percent.

Now most new Fatburger locations are cobranded with Buffalo Express. Over half of existing locations are already cobranded, Wiederhorn says.

Fatburger has hard-won experience that many upstart fast-casual burger chains lack. The company was founded in 1952. It became a hip-hop legend of sorts in the 1990s, with shout-outs from West Coast rappers such as Notorious B.I.G. and Ice Cube, and celebrity franchisees including Queen Latifah, Pharrell, and Kanye West.

Fog Cutter purchased the chain in 2003, and in 2009 the companies that owned Fatburger's locations in California and Nevada declared bankruptcy. Since emerging from bankruptcy in 2011, the chain has been determined to expand.

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Instead of focusing on domestic growth and franchising, however, Fatburger wants to be a worldwide brand. Half of all new restaurants the company opens are overseas.

This year, the chain opened locations in Iraq, Qatar, Fiji, and Pakistan, with development agreements in Malaysia, Egypt, and the Philippines. With these new locations, Fatburger is poised on the brink of an expansion explosion—the 150-location chain has 200 locations under development.

*Correction, Nov. 18, 2015: Due to a production error, this post was initially attributed to Kate Taylor, the arts reporter at the New York Sun.

Kate H. Taylor is a retail reporter at Business Insider covering franchises and food news.