Starting with a single burger joint in Cleveland, Miss., Lattimore “Lattie” Michael has turned Back Yard Burgers into a chain of more than 100 restaurants poised to take on the national scene. Memphis-based Back Yard Burgers Inc., announced a deal on May 22 with Black Angus Burgers Inc., to open 40 new franchises over the next 10 years in Florida and South Carolina. Earlier this year, Back Yard Burgers struck a deal with Taco Bell, KFC and Pizza Hut brands of YUM! Brands Inc., formerly Tricon Global Restaurants, to test 10 multibrand stores. The deal with YUM! has an option for an additional 500 restaurants.
“We’re excited about where we are,” says Delta native Michael. “We’re very excited.” Michael, founder, chairman and chief executive officer of Back Yard Burgers, opened the first restaurant in Cleveland on March 21, 1987. A second followed a year later in Clarksdale, Miss. The former grocery store owner said he started the first restaurant out of boredom.
“My original plan was to just open three or four stores in the Delta area,” Michael says. But, with a little luck and a lot of hard work, things began to change. In 1990, the company headquarters moved from Cleveland to Memphis for more exposure. Three years later, the chain that started as a double drive-thru restaurant opened its first dining room in Boone, N.C., and Back Yard Burgers went public on the stock market.
Today, Back Yard Burgers operates 105 restaurants in 17 states including eight in Mississippi. And with the two deals in place, Michael expects the company to grow even more. “We felt like those were very significant events,” Michael says.
Louisville-based YUM! owns and franchises 30,000 restaurants, including KFC, Pizza Hut and Taco Bell, in 100 countries. YUM! is the world’s largest restaurant company in terms of system restaurants with over 30,000 restaurants around the world in over 100 countries and territories. YUM!’s three brands, KFC, Pizza Hut and Taco Bell, are the global leaders of the chicken, pizza and Mexican restaurant categories, respectively. Total worldwide system sales were over $22 billion in 2000.
Under the terms of the development agreement with Back Yard Burgers, YUM! will have the right to use the Back Yard Burgers trademarks in the United States in connection with the establishment and operation of up to ten Back Yard Burgers outlets as part of multi-brand units with Taco Bell, Pizza Hut and/or KFC operations. It is anticipated that the first ten outlets will be constructed and opened by 2003. Multibranding is the combination of two or more restaurants at one location. The development agreement also grants to YUM! an option to co-brand up to 500 additional restaurants within certain geographic areas if the development schedule for the initial ten outlets is being met. A limited menu has been developed for these co-branded outlets, and the outlets are to be constructed and operated consistent with Back Yard Burgers’ standards.
Under a separate agreement, Black Angus Burgers, Inc. will open 40 Back Yard Burgers stand-alone franchises over the next 10 years, including 22 restaurants in the Tampa/St. Petersburg and Lakeland, Florida, areas and 18 restaurants in certain counties of South Carolina, namely the metropolitan areas of Charleston, Columbia and Myrtle Beach. Black Angus Burgers, Inc. is solely owned and controlled by John McGrath of JEM Restaurants. McGrath is a majority owner of various entities under the JEM Restaurants umbrella. Expansion plans for 2002 also include seven company-operated stores and eight or more franchised stores as well as six or more co-branded outlets.
Although Back Yard Burgers started as double drive-thru concepts, most restaurants now include a full dining room with a self-service beverage center and a standard drive-thru. Back Yard Burgers features premium 100 percent Black Angus Beef burgers and chicken sandwiches, served hot off the grill with fresh toppings and gourmet sauces. The menu also features seasoned or waffle fries, hand-dipped shakes and malts and lemonade. DBJ