From Turkey to Germany to Texas, the star of the show at VertsKebap has had quite a journey.
The menu at this Austin, Texas–based chain is designed around the döner kebap, a Turkish street food brought by immigrants to Germany, where it became a popular fast-food option.
A kebap includes meat cooked on a vertical rotisserie, vegetables, and sauces cradled in grilled and folded Turkish-style pide bread, which is crispy on the outside and chewy on the inside.
“I was born and raised in Germany,” says VertsKebap CFO and cofounder Dominik Stein. “I came over to Texas as a student and realized there was nothing like the kebap here. It is Germany’s most popular fast food, so it surprised me that there were none to be found here.”
Stein and Michael Heyne, another German student studying in the U.S., decided to remedy America’s kebap shortage. The two were able to research the topic for marketing and finance classes as part of their MBA studies at the University of Texas at Austin (UT).
“Neither one of us had a restaurant background, but we had a lot of time to get to understand the market using consultants in the industry,” Stein says. “We founded the company and came up with the concept for the first restaurant while we were in school.”
In 2011, the pair opened two VertsKebap units on the UT campus.
“We wanted to have a feeling of how it is to run a restaurant when you can’t be there all day long, so we opened two simultaneously,” Stein says. “It was chaotic in the beginning. We had to learn a lot of lessons.”
COFOUNDERS: Dominik Stein & Michael Heyne
HQ: Austin, Texas
YEAR STARTED: 2011
ANNUAL SALES: –$1.5 million per restaurant
TOTAL UNITS: 25
FRANCHISE UNITS: 0
Stein and Heyne split their time between the two original locations for a year and a half before growing. When they reached 10 locations in Austin, they expanded to Houston and Dallas.
Stein says the combination of quality and nutrition makes the concept special. The two meat choices at VertsKebap are chicken and a blend that contains 5 percent lamb and 95 percent beef. Vegetarian kebaps are made with veggie patties or falafel. Fresh vegetable topping choices include lettuce, greens, cabbage, tomato, cucumber, green pepper, corn, onion, and jalapeño. The house, garlic, and spicy red sauces are made with yogurt. Other sauce choices include vinaigrette and a hot sauce. Feta cheese can also be added to any order.
“Our kebaps have the taste of a burger and the health of a salad,” Stein says.
The meats are seasoned with traditional Turkish spices and stacked by hand. The vertical rotisserie cooks the meat evenly as it turns and allows grease and fat to drip off and be captured below.
Stein says the lean meat, cooking process, and use of yogurt instead of mayonnaise in sauce recipes allows VertsKebap to keep calories under control. He adds that people know they can come to the restaurant and eat something tasty and satisfying without feeling guilty.
Kebaps, wraps, and salad bowls are available in regular and snack sizes. Regular-size entrées are priced between $6.45 and $7.65, and most have fewer than 550 calories. Stein says it is a limited menu, but with a strong focus on the main items.
Side items include skin-on french fries, falafels, and fruit cups. Beverages run the gamut from bottled water and juices to natural sodas, fountain soft drinks, locally brewed draft beers, and a more unusual offering of cold-brewed coffee.
“The coffee is brewed by our supplier and served out of a beer tap,” Stein says. “It is basically iced coffee purchased in a barrel.”
Stein says he and Heyne have 15 new VertsKebap locations in mind for 2016 and are working on site selection.
“I’m not sure when we’d like to move into the next state,” Stein says. “Right now we’re fully concentrating on Texas. We want to create as much brand awareness in Texas as possible. Our growth all depends on cash flow and funding, but we want to get to 100 locations by 2020.”
A typical VertsKebap location is 1,700–2,400 square feet with seating for 75–80 customers who have a view of the meat slowly cooking on the vertical grills. About 80 percent of customers dine in because, Stein says, VertsKebap food is “best consumed when hot and fresh.”
The per-person check average hovers around $10, down slightly from 2014.
“Last year it was up to about $12, but we felt that was getting too high,” Stein says. “We want to be accessible to the average person, so we lowered the prices for our entrées. We also took a few items that cost extra in the past and made them free, like our fresh grilled veggies. Value perception is important. We have to have the pricing right.”
Adjustments were also made to bring the lunch-dinner split closer to 50/50.
“Adding beers, having happy hours, and just providing a nice ambiance with good lighting and nice music makes people want to stay longer,” Stein says. He adds that sales are higher on weekends at some locations because the stores are built more like an upscale restaurant.
Stein says there are no plans to franchise VertsKebap. “We want to make sure quality control is in our own hands,” he says.