BurgerFi permanently closes its second-ever location. Here’s why.
First came the Lauderdale-by-the-Sea location.
David Manero, creator of two Vic & Angelo’s locations in South Florida, had created BurgerFi in the city in 2011 after realizing burgers and fries were the food Americans craved most when they went to restaurants.
By the time he opened the second BurgerFi at 6 S. Ocean Blvd. in Delray Beach later that year, Manero announced plans to open 60 franchises across the nation.
But Manero is long gone and the Fort Lauderdale-based chain has endured some bumps since acquiring Anthony’s Coal Fired Pizza & Wings in 2021. This week, fans in Delray Beach noticed that BurgerFi’s first Delray Beach location had closed permanently.
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The decision to close the Delray Beach landmark followed closures in recent years of other South Florida BurgerFi restaurants in Wellington, Lighthouse Point, Deerfield Beach, Pompano Beach and Jupiter.
Fans needn’t panic, however. There are still 108 BurgerFi locations, including 53 in Florida and 28 in Broward, Palm Beach and Miami-Dade counties. Two remain in Delray Beach.
A spokeswoman for the company released a brief statement about the Delray Beach closure:
“We continually review our restaurant portfolio performance, and this closure was a strategic decision based solely on business demands,” the statement read. “We were at the sunset of the lease and as a result we chose to close this location but look forward to continuing to serve our local guests in Delray at our two other locations. We are always looking for opportunities to grow all over Florida and beyond.”
The high concentration of South Florida locations is among issues that have contributed to a sales slowdown at the chain, CEO Carl Bachmann told attendees of the ICR Conference in Orlando earlier this month.
Bachmann, who began serving as CEO in July, said the company had become oversaturated in Florida. He announced plans to close underperforming restaurants and open new ones in the northern and western United States.
“The opportunity for us to have less of a concentration in one market will lift all ships,” he told the conference, according to Nation’s Restaurant News, an industry trade website.
Bachmann said additional changes are planned for the company, which reported a 7% decrease in same-store sales at BurgerFi and a 1% decrease at Anthony’s’ corporate-owned stores in preliminary 2023 financial results.
Under Bachmann’s leadership, the company has been entering non-traditional markets like movie theaters and is eyeing casinos and airports. It also opened the first dual-branded BurgerFi and Anthony’s in Kissimmee in December.
Plans for 2024 include reopening a flagship, company-owned BurgerFi in New York City, according to a financial summary released by the company earlier this month.
BurgerFi ended 2022 with a net decrease of four stores, then closed five more stores in the third quarter of 2023, records show.
Excerpts from a strategic priority list shown to investors at the conference provide an indication of what the company believes it must improve. The list includes phrases like “fixing the fries,” “Taste of the Burger,” and “terminating unproductive franchise and company owned BFI locations.”
The company has reported operating losses in each quarter since announcing the $156.6 million Anthony’s acquisition in October 2021. Its share price, meanwhile, closed on Wednesday at an all-time low of $0.65 on the Nasdaq stock exchange. It was $8.78 on Oct. 11, 2021, when the Anthony’s acquisition was announced.
In April, a group of investors sued the company, claiming it concealed key information when it projected improved earnings and stock-price growth that would result from the acquisition.
BurgerFi did not file a formal response, but submitted a statement noting it disputed the claims. In September, the plaintiffs withdrew their complaint. A derivative suit was dismissed two weeks later, but neither side have publicly explained why the complaints were dropped.
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at rhurtibise@sunsentinel.com.
