According to a sale listing, the mall location takes in a gross income of $580,000, and generates a $100,000 cash flow per year. The prospective buyer will get all of the equipment and inventory, and two weeks of training. Under "reason for selling", the current owner says, "Retire."
The listing cites no competition for gourmet burgers at the mall, but doesn't mention that Bobby Flay's Bobby's Burger Palace is located there. Kraze Burgers' burgers are outstanding, in my opinion, and I was surprised that the Bethesda Row location failed.
11 comments:
"I think the failure of Kraze was more due to the company's problems more than this particular location." - Dyer
5:10: Are you trying to say I was wrong or right?
Wow those numbers are really bad for Kraze. First, the asking price is way too high, because $100k in free cash flow probably factors in that the owners work in the business. If you have to hire a real manager, suddenly it's losing money.
Not surprising if it's making only $580k in a year in revenue. That comes out to about $150/hour in revenue, or a sale every 4 minutes if the average sale is $10. Now go look at the Sarku Japan place next to them -- they sell about $150 in 10 minutes.
Note also the listing says they have 4 employees. That's nothing for a food service business. A typical Five Guys has 5-10 people working during the busy times of day.
The problem here seems to be the product and marketing. They simply aren't bringing in the revenue.
5:47: Excellent points. That's why I was wondering if 5:11 was trying to claim all the struggles were just at the Bethesda Row location.
5:47 here. All I can figure is it's a general marketing or product problem. Plenty of burger places open up and do well. Heck, in Montgomery Mall the Five Guys (by Home Depot) always seems full, and Bobby Flay's place seems to do well also. So the demand for burgers is there, but not for Kraze.
I found their burgers fine but not amazing. Bobby makes a better burger in terms of quality and toppings, while Five Guys has a better price point. Kraze had neither.
Again, do your homework and you'll have a better blog. This change is dismal and will soon go under in America simply because of bad management. The DC location as well as the Tysons Corner location have also closed. There are allegations of fraud charged against the DC franchise nearly two years ago.
I enjoyed their stuff when they were on Elm Street. They were better than Five Guys in my opinion.
Hahaha. If you have no confidence in your statement's application, what's that say?
Jk. I was saying you were right! :)
What's gonna happen? Could it close soon or what?
9:15: That was my point in what the first commenter was quoting me having said. Those are the type of issues I was referring to, among others. It was exactly because I had done my homework that I was able to provide some context for the Bethesda Row location closure.
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