Backing a Big Burger

Friday, June 17, 2005
Backing a big burger
Former NFL player claims his stake in Whataburger franchise
Tampa Bay Business Journal - by Larry Halstead Web Editor/Staff Writer
TAMPA -- That sizzling sound is a burger war heating up in Tampa Bay.
Whataburger, a 55-year-old hamburger chain based in Corpus Christi, Texas, is heavily ramping up its local presence, with a large commitment to beef up the chain from a former NFL star offensive lineman.
Former Jacksonville Jaguars player Tony Boselli is now the company's lead franchisee in Tampa, as well as in Jacksonville and Orlando.
Boselli's group, JWB Ventures Inc., prepaid for 48 sites and opened in Tampa Monday on West Hillsborough Avenue. That makes 12 stores in 10 months for the Jacksonville-based investment group.
Boselli, whose playing size was 6 feet 7 inches and 322 pounds, got hooked on the burgers when he played for the Houston Texans during his final season in the NFL in 2002.
"I tried the product, liked it and wanted to get involved after football," he said.
There are 55 units planned for the Tampa Bay area, but the number that JWB Ventures will open is not yet determined.
Each unit costs between $1.7 million and $2 million to open, including franchise rights, land, building and startup expenses. Boselli has a significant equity stake in the restaurants, but declined to get specific.
Boselli has a history in hamburgers. As a Jaguars player in the 1990s his name was associated with the Jacksonville McDonald's Association Co-op of 93 restaurants.
A McDonald's culinary concoction, the Boselli Burger, was featured in television ads in 1998 that showed Boselli enjoying his burger at a local restaurant. At the time, the Jacksonville Business Journal reported that one of Boselli's first jobs was working on the crew in several of his parents' McDonald's restaurants in Colorado.
And in a 1997 McDonald's campaign estimated to cost $1.5 million, Boselli promoted four McDonald's products for 99 cents each.
A crowded kitchen
With McDonald's, Burger King, Wendy's and Checkers firmly established in the area, introducing a new brand is no easy task.
"The giants carve out a national following with their advertising," said Tom Minor, principal at Technomic Inc., a Chicago-based franchise consultant. "But there's still room for regional players who have a distinct following of people who like independents."
Whataburger has had a southern presence from Arizona to Florida along Interstate 10 and from Georgia back to Arizona along Interstate 20.
Although 25 percent of restaurants fail after three years, in the limited service restaurant segment, hamburgers are the most popular item. And consumers are fueling a huge growth in the field, Minor said.
According to a study by Technomic, McDonald's, which grossed $24.4 billion in 2004, grew by 10.3 percent since 2003.
In contrast Whataburger reported $800 million in sales and grew 13 percent during the same period. Its number of units only grew by 5.1 percent, so the added sales are coming from existing stores expanding their client base, not from opening new units, Minor said.
"The stores are in hand-to-hand combat for customers," said Donald Boroian, CEO of Francorp Inc., an Olympia Fields, Ill.-based franchise consultant. To get more customers, it takes a price break, a coupon, better service, a broader menu or anything that will give an edge to the restaurant.
"Whataburger is a proven brand and has shown it can compete with the best," Boroian said. "They wouldn't go into an area unless they had identified a good market and planned to open multiple units."
"We're going to do these one store at a time," Boselli said.
lhalstead@bizjournals.com 813.342.2467