When Culver’s decided to add “from Wisconsin with love” to its television ads, the company’s marketing chief, now its CEO, wasn’t entirely sure it would play well in the areas the chain was building new restaurants, such as Florida or the Carolinas.
“It’s shocking how much it resonates,” CEO Julie Fussner said on my podcast this week. “There’s actually a lot of pop culture references to Wisconsin that people actually get what I’m talking about.”
It clearly resonates, because Culver’s has continued to perform, even when the consumer is clearly shifting away from burgers.
The chain’s system sales grew nearly 16% last year, according to data from the Technomic Top 500 Chain Restaurant Report. Total sales at limited-service burger chains grew just 1.4% over that period. And the relative weakness was consistent.
But that’s just what Culver’s does. It is one of the restaurant industry’s most underappreciated growth stories. Culver’s grew last year with a combination of stronger average unit volumes and more restaurants. Its 1,000 restaurants generate $3.8 million in average unit volumes, nearly the same as McDonald’s, but without the benefit of breakfast.
Its system sales have nearly quadrupled over the past decade. It is now a Top 30 restaurant chain.
Its Wisconsin home is probably as much to blame for the lack of appreciation as anything, but it is also what drives the chain in the first place. Culver’s is based in Prairie du Sac, Wisconsin, a town of just over 4,000 people northwest of Madison. Its headquarters overlooks a river where there are nesting eagles. On the other side is farmland.
As such, it doesn’t get some of the attention that, say, the California-based In-N-Out does or the New York-based Shake Shack or the Alexandria, Virginia-based Five Guys.
Yet the chain and its menu were created to mimic the Wisconsin supper clubs that the Culver family enjoyed years ago. At a time when most high-growth chains have limited menus—like the chicken-finger-only chain Raising Cane’s—Culver’s has a broad set of offerings including burgers, pot roast and pork loin sandwiches, fish dinners, cheese curds and, of course custard.
“When you think about the types of food we serve, those all came from Wisconsin,” Fussner said. “We obviously are well-known for cheese curds. Burgers are sort-of thought to have been invented in Wisconsin, at least in the United States. Fresh frozen custard is from Milwaukee. We have pretzel bites. Pretzel is another favorite of Milwaukee.
“So if you ever just think about the food itself, that’s completely differentiated.”
A trio of people claim to have invented the burger, according to the website Burger Theory. One of them is, indeed, a Wisconsin native, Charlie Nagreen, or “Hamburger Charlie,” who apparently put a flattened meatball between two slices of bread and sold it in Outagamie County in 1885.
While the food is important, what drives Culver’s is the chain’s operations. The company’s restaurants are exceptionally well-run. Visit any of them and the inside is likely to be clean. You get your food delivered to your table. It may not be exceptionally fast, but few chains in its made-to-order cohort are. And the service is hospitable.
Consumers notice this. Operations are more important today than ever, because when diners are cutting back, they are a lot more likely to cut back on restaurants that don’t provide what they want, and good service is at the top of that list. Want to know what drives the success of the best U.S. restaurant chains? Look at the way their stores are run.
At Culver’s the operations success comes from the chain’s base of franchisees, who are in their stores all the time, and most of whom grew up working in the stores.
“That is the absolute secret to our success,” Fussner said. “The requirement is that every restaurant has a present and engaged owner-operator and there is absolutely no compromise on that. It doesn’t mean you can’t have two or three restaurants and you might not be in that restaurant every single day. But most of our people who are operating our restaurants now grew up with the brand. But they are a present and engaged owner-operator.”
At a time when many restaurant chains are pushing technology, such as voice-activated AI drive-thru windows and in-store kiosks, all mostly in a bid to reduce workforce, Culver’s focus on personal attention is refreshing.
“No kiosks,” Fussner said. “That’s not happening. Don’t even say it.”
The company is proud of its dine-in business, which remains robust at a time when too much of the restaurant industry is trying weirdly to get to “100% digital.” Digital is great. But 100%? Come on.
“One of the things we’re very proud of is maintaining the dining room where you can come in and sit and have a meal,” Fussner said. “Not that you can’t do that in other places. But we still have a decent percent of our business that is dine-in. And we love that we’re one of the few places in a lot of communities that people feel like they can go after the high school football game or whatever and gather there.”
Fussner does have plans for the chain, such as a loyalty program and finding ways to make kitchens easier for franchisees to run, and to evolve the team at the company’s support center. But she has no intent on changing what made the brand great in the first place.