Honest Burgers Takes On Premium Quick-Service Rivals

Posted by Emily on 8th Oct 2023

Honest Burgers has unveiled ambitious plans to challenge quick-service giants like Five Guys and Shake Shack. It aims to roll out a new breed of fast-food restaurants in prime city locations that offer competitive prices for premium-quality products.

Andy Li, CC0, via Wikimedia Commons

Tom Barton, co-founder and head of food and sustainability at Honest, voiced concerns over the pricing models adopted by competitors. "Fair play to Five Guys for what they've managed to charge, but the cost of a Five Guys burger truly baffles me. We're confident that we can provide a superior product at a more attractive price point," he remarked. For perspective, Five Guys' single-patty burgers begin at £6.65, whereas Honest Burger's entry-level offering, inclusive of fries, is priced at £8.90.

Despite already operating 42 outlets, Honest Burgers isn't slowing down. They've secured their inaugural quick-service location in central London, intriguingly next door to one of its two main competitors, with doors set to open early next year.

Honest has embarked on its maiden crowdfunding venture to support this aggressive expansion. Honest's chief executive, Frank Hayes, aims to raise a few million from individual investors. This fundraising is complemented by a £1 million commitment from private equity powerhouse Active Partners, who already own half the company.

Andy Li, CC0, via Wikimedia Commons

On the mounting demand for high-quality, quick-service burgers, Hayes observed, "The success of Five Guys and Shake Shack, to a lesser extent, is evident. With Five Guys boasting up to 160 UK outlets and openly planning to double this count, it's evident that premium burgers are in high demand. We're positioning ourselves between Five Guys and more affordable chains, such as Burger King and McDonald's."

However, John Eckbert, Five Guys' CEO, maintains that they don't see themselves as a quick-service outfit but rather a provider of the best possible burgers. The brand's UK franchise hails from its US parent company, owned by Carphone Warehouse co-founder Sir Charles Dunstone.

Barton provided some tantalising details on what customers expect from the new outlets. Their "smashed burger" will be a 100g beef patty with a 70:30 meat to fat ratio, ensuring a quick grilling time of just under two minutes. The menu will also feature a fried chicken burger, "loaded" chips, milkshakes, and possible vegan and vegetarian options.

A testament to Honest's popularity, Ed Sheeran partnered with the brand to create a hot sauce burger last August. As Barton notes, "We featured in one of Ed's music videos, so we knew there was a bit of love there for the brand."

Financially, Honest reported pre-tax earnings of £3.8 million for the year ending in January. Its rapid growth since 2015, when Active Partners invested £7 million for a 50% stake, is noteworthy. Investors joining the crowdfund can expect a plethora of benefits, ranging from free burgers to hosting parties at Honest's restaurants.

Hayes echoed the optimism: "Despite challenges in the hospitality sector, Honest Burgers' continuous growth shows our resilience. Our commitment to quality remains unwavering, and we're excited about our future. Our vision is to bolster our footprint, not just in London, but in other regional cities too."

Spencer Skinner from Active Partners echoed this sentiment: "Honest Burgers' growth can be attributed to the team's passion, values, and dedication. We're eagerly awaiting the brand's next chapter."

Currently, Honest Burgers boasts over 40 national outlets, serving a staggering 80,000 burgers and 30 tonnes of homemade chips weekly. With a projected sales figure of £55m in 2023, the brand's trajectory looks promising. Their unique touch includes an in-house butchery and the Honest Farming initiative, which seeks to revolutionise the beef supply chain by collaborating directly with regenerative farms, emphasising soil health, biodiversity, and carbon capture.

Sources:

Honest Burgers announces plans to enter QSR market.

Page image source - Honest Burger Copyright

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