BurgerFi is struggling with unit development and is close to falling under 100 units for the first time since 2018.

As of April 1, the chain had 102 stores systemwide—27 corporate units and 75 franchised restaurants. In Q1, the fast casual closed eight restaurants, or approximately 7.5 percent of the footprint.

Founded in February 2011, BurgerFi reached triple digits by the end of 2018. However, from that point until now, unit count has decreased by two locations.

Here’s how BurgerFi’s restaurant count has trended recently:

Q1 2022: 124

Q2 2022: 122

Q3 2022: 117

Q4 2022: 114

Q1 2023: 112

Q2 2023: 114

Q3 2023: 110

Q4 2023: 108

Q1 2024: 102

Redefining and rightsizing the portfolio has been part of CEO Carl Bachmann’s five-point turnaround plan. The chain hasn’t seen a positive unit growth quarter since he joined the team in July 2023.

“Looking ahead, our development efforts are focused on recruiting well-capitalized franchisees who possess substantial experience in the restaurant, retail, and hospitality industries,” Bachmann said during BurgerFi’s Q1 earnings call. “Over the long term, we plan to grow the brands within metropolitan cities along the I-95 corridor, as these are the market areas where both brands have demonstrated strong performance.”


BurgerFi’s Sales Remain Down, but Optimism is Still High

BurgerFi Shows Confidence in Turnaround Despite Sales Dip

There have been some wins amid the footprint optimization strategy. On May 15, BurgerFi opened its second franchised restaurant inside an Apple Cinema in Warwick, Rhode Island. The move showcases the brand’s growing optimism around nontraditional spaces because of the smaller square footage and lower startup costs.

And then in late March, it reopened a flagship corporate store and first-ever Better Burger Lab in the Upper East Side of Manhattan. The location serves as a public test kitchen and innovation hub.

“We recognize that BurgerFi has lost some of its cachet in market share over the years, not due to any one major misstep, but rather a collection of smaller issues that have impacted us over time,” Bachmann said. “The Better Burger Lab represents our commitment to thoughtful innovation as we continue exploring creative ways to elevate the Better Burger experience for our guests.”

BurgerFi’s same-store sales decreased 13 percent in Q1 year-over-year and systemwide sales dropped 17 percent to $33.4 million. Bachmann said the quarterly performance isn’t indicative of the chain’s long-term potential. He attributed negative sales to the challenging consumer environment and unfavorable weather in key markets. The CEO also noted a sequential improvement throughout Q1, starting with a slight increase in February followed by a more substantial recovery in March outside of Florida. BurgerFi fared better in the Northeast because of seasonably cooler weather in the Sunshine State and overall softer demand in the market.

Meanwhile for Anthony’s Coal Fired Pizza & Wings, same-store sales decreased 2 percent in Q1 compared to the year-ago period. March same-store sales were flat at the casual-dining chain, adjusting for the Easter calendar shift. Sales have shown stability during the second quarter to date. Anthony’s has 60 units nationwide, including one franchised store in Florida. A second franchised unit should debut by the end of the year. A third one is coming in 2025.

BurgerFi was trading at 38 cents per share as of Monday morning. The company revealed in January that it received a delisting notice from Nasdaq because it wasn’t meeting the requirement of being above $1 per share. The fast casual hasn’t reached that high since early December.

Bachmann eyes have remained on driving revenue growth and enhancing operational efficiencies by implementing the other four prongs of his strategic plan.

The first one is strengthening infrastructure. With staffing levels at 95 percent and reduced turnover, BurgerFi and Anthony’s have improved retention rates, leading to decreased training costs and better execution. In terms of technology, BurgerFi has implemented a new inventory management system, with a rollout underway at Anthony’s. This platform is expected to enhance efficiency and operations, potentially reducing costs by 200 basis points. Additionally, Anthony’s is adopting the Toast POS system, which includes handheld tablets for servers to improve order accuracy and service speed.

The next strategic point is taste and quality. BurgerFi introduced the HEINZ Remix machine, allowing customers to create custom condiments, and launched the Better Burger Lab in New York City as a test kitchen for new menu items. Anthony’s has also added seafood options with its new Italian Shrimp Festival platform. The third tenet is gold standards. The company has seen improved audit scores; Anthony’s now scores 4.49 out of 5, while BurgerFi scores 4.38. The fourth one is better marketing, and BurgerFi has done so with promotions around Tax Day, National Beer Day, and during Teachers and Nurses Appreciation Week.

“I am more confident than ever that joining the company was the right decision,” Bachmann said. “Achieving sales and margin improvements will not happen overnight, but we are laying a solid foundation to build upon. We are making highly strategic decisions following a straightforward formula. We must deliver wins for our guests, our team members, and our shareholders and franchisees.”

Fast Casual, Finance, Franchising, Story, BurgerFi