BurgerFi’s openings take a big hit due to supply and labor shortages

The better-burger brand had planned to open up to 30 new restaurants this year. On Thursday, the fast casual revised that estimate to 18 new stores.
Photo: Shutterstock

BurgerFi had planned to open up to 30 new restaurants this year. But the fast casual on Thursday cut that growth forecast nearly in half, saying it instead will likely debut 18 restaurants in 2021 because of supply and labor shortages.

“We are experiencing challenges with the availability of materials and labor for the construction and development of new restaurants,” CFO Michael Rabinovitch said during the company’s third quarter earnings call.

BurgerFi opened two company-operated locations for the quarter ended Sept. 30, for a total of 11 restaurants this year, including one franchised store in October. The remainder of the 116-unit chain’s planned openings are slated for the first quarter of next year.

“We’re well aware of the challenging environment that’s out there,” BurgerFi CEO Julio Ramirez said. “Equipment availability, labor shortages, subcontractors dealing with COVID. The delays are all real stores—the leases have been signed. It’s not like they’ve gone away. It’s a very challenging environment. We continue to plug forward."

With a slowing in brick-and-mortar restaurant construction, the better-burger brand has been growing its portfolio of ghost kitchens. So far this year, it has opened 15 delivery-only locations.

Earlier this month, BurgerFi completed its $156.6 million acquisition of 61-unit casual-dining chain Anthony’s Coal Fired Pizza & Wings. The operator has previously said that the purchase marks its first such deal in the creation of a multi-brand platform.

For the quarter, BurgerFi reported a same-store sales increase of 8% systemwide, attributed to growing check sizes from premium new menu items and a roughly 4% price increase.

“It’s a delicate balance of guest experience with margins,” Rabinovitch said.

BurgerFi reported total revenue of $11.1 million in Q3, up 25% from the year before. Operating expenses rose to $7.8 million, compared o $6.3 million, driven by increases in food, beverage, paper and, of course, labor.

“The cost of labor has impacted but the real impact has been the productivity of our labor,” Rabinovitch said, noting a high turnover rate.


Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.


Exclusive Content


Restaurants have a hot opportunity to improve their reputation as employers

Reality Check: New mandates for protecting workers from dangerous on-the-job heat are about to be dropped on restaurants and other employers. The industry could greatly help its labor plight by acting first.


Some McDonald's customers are doubling up on the discounts

The Bottom Line: In some markets, customers can get the fast-food chain's $5 value meal for $4. The situation illustrates a key rule in the restaurant business: Customers are savvy and will find loopholes.


Ignore the Red Lobster problem. Sale-leasebacks are not all that bad

The decade-old sale-leaseback at the seafood chain has raised questions about the practice. But experts say it remains a legitimate financing option for operators when done correctly.


More from our partners