In this latest episode Marcus revisits Standard Burgers from the second season. As you may recall, it’s the Staten Island burger joint owned and operated by a dozen or so very hot-tempered guys. The company won first prize at the Best Burger in New York event.
You can read my original write up about Standard Burger here.
You have to know your numbers. Marcus demonstrates why this is so important when he sits down with the guys to go over the effects of the new plain jane burger manager Joe introduced behind his back. The item consists of nothing more than a meat patty and bun and costs a dollar less than the Standard Burger. Why anyone would forgo the sauce, lettuce, tomato, pickles, and mustard for a dollar discount is beyond me.
Marcus explains that food costs should not exceed 30% of the retail price. By dropping the price a single dollar the costs have actually shot up to 34% and the overall financial performance of the business has been declining as a result.
In addition to manager Joe coming across like an out of control hothead there’s another issue that comes to light during Marcus’ visit. Joe had a short affair with a female employee who he subsequently fired. This could lead to a potential sexual harassment suit against the company. Hopefully Marcus got this risk covered.
In the end Marcus was forced to do a Donald Trump and tell Joe “You’re fired!” A wise move. Joe can be toxic whenever anyone disagrees with him.
The Big Lesson
The big lesson here is that you can’t run a business with a committee. Too many chefs spoil the burger, as the old saying goes. You can have silent partners but one person needs to have the authority to make executive decisions on behalf of the board and shareholders. If decisions are left up to a committee they either get postponed indefinitely or watered down to where they become ineffective out of a desire to please everyone.
A business is not a hobby as these guys appear to think.
What Marcus needs to do is keep the chef, Fuji, and hire professional managers for each of the company owned stores. The franchisees will be their own managers.
The growth strategy for Standard Burger is franchising. Halfway through the episode we are shown a location for the second store. Unfortunately, it is grossly over-priced for the business model. We never find out what happened with it.
Marcus and the boys meet their first potential franchisee who happens to come from a family with extensive restaurant industry experience. They are interested in multiple units for New Jersey and shale on a deal with Marcus.
Marcus adds hot dogs to the menu so that kids will have something besides burgers to eat. One of the dogs is a foot long 14 oz monster. Frankly speaking, I’m a bit concerned about the health effects of consuming so much mystery meat in one seating.