After 35 years in fine dining, Michael Namour was ready to try something casual. With $275,000 and a lot of elbow grease, he opened Buns with partner George Ash in May 2008 across the street from the University of North Carolina at Chapel Hill (UNC). The name, chosen to grab customers’ attention, isn’t the only thing that’s catchy about the pair’s concept.
While other restaurants cut quality and portion sizes to stay afloat, Buns serves customers 6 ounce Angus Chuck burgers on buns made fresh daily at a local bakery. A towering side of hand-cut fries, gourmet dipping sauce, and a soda complete the store’s combo for less than $8.
Buns’ beef, turkey, and veggie burgers, prepared without a freezer or a microwave, brought the concept almost instant success. But Namour and Ash will tell you that it takes more than a good product to run a successful independent operation.
Although the Chapel Hill area is usually a revolving door of storefronts, Namour and Ash turned a profit only six months after opening Buns. The pair credits market research, carefully thought out pricing, and strong community connections. And they did it without the help of a corporate office.
QSR followed Namour and Ash for one day, from pre-opening to close, to give you a first-hand account of the challenges independent operators face.
8:30am - Namour and four of his 16 full-time employees have been at Buns for half an hour already. One forms hundreds of beef burgers by hand while another seasons salmon and tuna steaks.
Namour’s day started long before 8 a.m. Although he and Ash chose to open the store in Chapel Hill because the nearby university offers a captive audience, Namour commutes into town two to three days a week from his home in Denver, North Carolina. The ride takes three hours. He spends another day or two each week at the restaurant’s office in Hickory, North Carolina, where a bookkeeper manages paperwork and performs cost analyses. But making it out to the store regularly is important to Namour.
It allows him to be intimately involved in operations—counting the money in the register, tasting various products, taking inventory. Whatever is necessary to prepare for the day’s 11 a.m. opening.
“It’s exactly like running a play,” Namour says. “When the curtain goes up, you’ve got to be ready.”
10:00am Jennifer Robbins, the cashier for today’s lunch shift, arrives. After running to a nearby bank to deposit last night’s earnings, she fills the condiments in the dining room.
Robbins has been with Buns since the beginning, about two months before the store opened. She’s not the only one.
The restaurant’s staff is almost identical to what it was the day it opened 13 months ago. Only two staff members have left, which puts Buns at 12.5 percent turnover. That’s 87.5 percentage points below the industry average.
Namour is used to outstanding retention. At a former concept, he had staff members who stayed with him for 19 years.
Despite the fact that the UNC campus is so close, Namour and Ash shy away from hiring students, who often don’t make a quick-serve job their priority. That leaves Namour with employees who depend upon their job for their livelihood. He tries his best to accommodate this, refusing to release employees early when business is slow and offering them competitive wages.
“You can’t compete with the franchises because the franchises have 401Ks and health insurance,” Namour says. He gives employees regular raises to keep them from being lured away and promises health coverage after a year.
“It’s really a hardship on an independent to provide that, but in order to keep them ...” he says.
After Namour hires employees, he removes all temptations for them to steal or cut corners, decreasing the likelihood of firing them. Security cameras transmit a live feed to his Denver home, he offers them free food, and he jumps on anyone who strays from standard protocol—even slightly.
11:00am - Buns’ first customer of the day comes in. He has been waiting outside for 10 minutes.
Robbins reports hearing that a restaurant down the street is going out of business. It’s located on Franklin Street, the town’s main drag and a spot notorious for its high rent. Buns is on a side street, which means it receives less foot traffic and pays lower rent. The 2,000-square-foot location has served the restaurant well.
“I did not see much of a change,” Namour says about business after the onset of the recession. With about 370 customers per day, an average ticket price of $6.50, and a steady increase in business, Buns is on track to make almost $1 million in revenue by the end of its first year.
Buns’ operating costs haven’t been affected much by the economy, either. The store increased prices by 50 cents in November after food costs went up, but they have since come down again. Now Buns’ profit margins sit at 10 to 15 percent.
Customers consistently tell managers they should be charging a lot more, but Namour keeps prices low since he doesn’t invest much in marketing. Beyond donating gift cards to local organizations and buying the occasional university newspaper ad, Namour relies exclusively on word-of-mouth marketing, a strategy that’s already paid off. Out-of-town visitors flood Buns after sporting events, telling Namour that word of the store’s opening has reached them even from afar.
11:26am - Two representatives from Pate Dawson, a local food distributor, visit the store. Namour schedules an appointment to meet with them the following Monday.
At first, vendors wouldn’t even consider giving Namour the credit they usually give franchisees. He had to pay for everything cash on delivery (COD).
“Nobody wants to take a chance on you,” he says. “Everybody waits for you to build your business.”
Now multiple vendors solicit Namour daily; everything from food distributors to credit card companies want a piece of Buns’ profits. Perhaps the most striking example is Buns’ experience with Coca-Cola.
When Namour first talked to the company, it wanted to charge him weekly service fees and refused to give him any perks for signing. Meanwhile Pepsi offered Buns free cups, a free ice machine, and no service charges. In the seven months the store operated in 2008, it generated more business for Pepsi than some restaurants do in an entire year.
“In the last two months, Coke hasn’t stopped calling me,” Namour says. Company reps even offered to pay Namour reparations for each case of Pepsi he’s ordered. But Namour is sticking with Pepsi.
“This is what an independent faces,” he says.
12:15pm - The brunt of the lunch rush has been in full force since noon and will continue for the next hour. The line is often so long it goes out the door. Although it’s raining outside, customers wait to be served.
Namour has always subscribed to a hands-on philosophy. If a customer wants something not on the menu, he talks to the kitchen staff to ensure it comes out right.
“We’re in the hospitality industry,” he says. “It’s named hospitality because we’re going to accommodate you.”
He works the cash register, delivers food, and talks to as many customers as possible, offering to throw out their trash for them and saying goodbye when they leave.
Before getting a to-go box for one woman’s leftovers, Namour asks her why she hasn’t touched her fries. Was something wrong?
They were good, she says. She’s just full.
“If a person has a bad experience, they’ll tell a minimum of 20 people,” Namour says. “You tackle the problem before they leave.”
2:00p, - Buns’ U.S. Foodservice salesman arrives.
Namour places food orders four or five times each week from three vendors: U.S. Foodservice, Sysco Corporation, and Orrell’s Food Service.
His bookkeeper sends him updated food prices, and he orders the cheapest products from each vendor, pitting them against each other in a bidding war. But Namour doesn’t sacrifice quality for price.
“It has to be comparing apples to apples,” Namour says. He would never accept a lower-quality substitute for 81/19 Angus Chuck Ground Beef or No. 1 Idaho potatoes. Even the chicken patties, which were added to the menu after famed UNC basketball player Tyler Hansbrough requested them one day, are acceptable only in 6-ounce portions so his staff doesn’t have to cut them to the correct size.
“You want idiot-proof,” he says.
The U.S. Foods rep asks Namour if he needs any bacon, but he says no; Sysco can sell him the same thing for less. The salesman says he can beat Sysco’s price.
“Notice how he didn’t offer me the lower price until after he saw I was ordering from Sysco,” Namour says.
3:10pm - Ash comes in to relieve Namour and to manage the dinner shift.
While Namour has the know-how of an industry vet, 29-year-old Ash brings innovative ideas to the table and has helped the store become greener.
From Day 1, the store enrolled in a free oil-recycling program and it recently switched to corn-based cutlery that costs only slightly more.
“Nobody’s really putting pressure on us, but we feel like we need to do that,” Namour says.
While most customers don’t notice the switch, it’s extremely important to others. Shortly after the store opened, one man returned his salad and refused to eat it because it was served on a plastic foam plate.
Today Buns uses eco-friendly plates, but it still has to tackle the switch from plastic foam cups to paper ones.
“I’ve been pushing for it for a while,” Ash says. So far, he hasn’t been able to find a cost-effective substitute.
7:00pm - The rain keeps traffic during the typically busy dinner daypart to a trickle. Luckily, customers order from the specials menu.
Most days Buns has two combinations of toppings that can be added to any burger for $1 extra, but tonight there’s a third special—goat cheese and sun-dried tomato basil spread—specifically recommended for chicken.
“We had those toppings [bacon and avocado] typically that you pay an extra $1 for,” Ash says. “But when you put it on the special [menu], people tend to order it a little more.”
Ash thinks the specials are especially popular tonight because the store decided to add a third to the list at the request of customers who wanted a chicken special.
“That’s the beauty of being independent,” he says.
1:42am - Ash starts to see the first of the bar crowd. He hides the desserts that usually sit on the counter.
While the late-night crowd is usually well-behaved, they have been known to occasionally steal the cookie jar or write on tables in ketchup while drunk. Tonight, one lights a cigarette before Ash gently reminds him that smoking is banned.
Usually the rush would start closer to 1 a.m., but it’s a Thursday—the slowest of the three nights Buns stays open late. Still, the crowd gains momentum and doesn’t thin until 2:30 a.m.
“When we opened, [Namour] didn’t think this could happen,” Ash says. He had to drive Namour by a nearby Qdoba one night to show him what they were missing out on.
Now late nights are just as busy as lunch or dinner.
3:00am - Ash starts counting down the register. It’s closing time.
Tomorrow the process will start over again—and maybe at multiple locations sometime soon.
“I’d like to look at another place like this because we know it works,” Ash says. He and Namour have scoped out a spot in Durham near Duke University, but the pair is open to other campus locations, as well.
“We could pop it anywhere else,” Namour says. “The only thing we need to do is generate capital right now.”