Subway partnership over, but BurgerFuel still has US hopes

burgerfuel drink burger

New Zealand-based fast-casual burger chain BurgerFuel is once again looking to enter the United States after exiting a partnership that would have made the brand an expansion option for Subway franchisees.

BurgerFuel is currently eyeing the Indianapolis market for its initial restaurants, and has set up a development team that includes chain founder Chris Mason.

Specific growth plans have not been disclosed.

Founded in 1995, BurgerFuel is a publicly traded company with more than 80 locations in New Zealand and Australia, as well as in Egypt, Iraq, Saudi Arabia and the United Arab Emirates. The concept focuses on premium burgers made fresh with ingredients like grass-fed beef and hormone-free chicken.

In 2014, the then 55-unit chain announced a partnership with Franchise Brands, a collection of franchise concepts owned by the principals of Subway, including the late Fred DeLuca. As part of the deal, Franchise Brands bought a 10% stake in BurgerFuel with an option to increase that stake to 50% over an eight-year period. Plans at the time called for as many as 1,000 locations in the U.S. and other markets abroad by 2022, according to The New Zealand Herald.

As an affiliate of Franchise Brands, BurgerFuel intended to leverage existing Subway operators seeking another growth vehicle to help rapidly expand the burger brand in markets like the U.S. The first U.S. unit was expected to open by early 2015.

But expansion into the U.S. proved more complex than BurgerFuel had anticipated, CEO Josef Roberts said in the company’s most recent annual financial report, resulting in an entry that has stalled to this day. Further complicating plans was the death of DeLuca in 2015 after a long bout with leukemia. Roberts says the Subway co-founder was the “ultimate vision behind the partnership.”

The companies formally ended their collaboration agreement in August.

Despite the split in their expansion partnership, BurgerFuel says it will maintain a close relationship with Subway and Franchise Brands, which will also retain a 10% stake in the burger chain.


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