When T.J. Southard founded Killer Burger in 2010, he didn’t have a business degree. He'd never operated a restaurant. He didn’t have a master concept. He barely had any money.
But he’s always been a “wild card dreamer” who found his happiness through food. At that time, the economy was down, which meant such wild card dreams were more feasible for people like him.
“Prior to 2008, the economy was white hot, and everything was out of reach for someone like me – a 9-to-5 employee waiting for Friday to get gas in my car,” Southard said during a recent interview.
As he explains, a guy named Lee gave him a break by offering a one-year lease, including all the equipment, of a business that had failed during the economic downturn. He recruited friends and family to refurbish the place and the “concept took off.” Lee offered him a second location with the same terms. Then, Southard opened a third, fourth, and fifth location. They were scrappy days, he said.
Next month, Southard will open Killer Burger’s first location outside of the Pacific Northwest – in San Antonio, Texas. He’ll serve as the franchisee in the new market, adding to his roles as founder, board member, and majority shareholder of the better burger and craft beer chain. He relocated to spearhead this next phase for the company, which will include some new design elements and a few new additions to the menu.
Killer Burger launched its franchising program in 2017, which has helped the chain experience steady growth throughout Washington, Oregon, and Idaho. In 2021, Southard brought John Dikos on board as chief executive officer to balance out those “wild card dreams” of his.
“At some point, this became a viable business. I started to see the potential, but it wasn’t in my wheelhouse to run it,” Southard said. “John makes things happen.”
Dikos grew the brand from a little over a dozen locations to 23 today. San Antonio will mark number 24 with plans for many more if Texas is receptive to the brand. Optimism is high.
“Texas is a large market. We can build a lot of restaurants in Texas and drive scale in that one state. We will eventually want to go to other places, but for now, we’re laser focused on getting density in that market,” Dikos said.
Dikos adds that Killer Burger is also differentiated enough to stand out in such a large market, with an employee proposition, value proposition, a “rebellious, fun” brand, and “burger craftsmanship” supported by offerings like the Peanut Butter Pickle Bacon Burger and the Bender (bacon, spicy barbecue, crispy jalapeño, house sauce, grilled onion, and cheddar cheese).
“We’ve also got good sales-to-investment ratios and good margins,” he said, adding that Killer Burger mostly generates a minimum 2-to-1 sales-to-investment ratio but has achieved 3-to-1 and even 4-to-1 ratios, and margins in the upper teens and lower 20s percentage after royalty payments. But, for him, the brand’s benefits extend beyond unit-level economics.
“If you were to have two brands competing in the same place for 20 minutes and 20 bucks, I would put my money on a brand that has an ownership mentality at the store-leadership level. Put the tablestakes of food and service and all that aside, the owner that works in their restaurant as a community member, friend, employer, mentor, I’d put my money on that versus the largest operators and corporate groups,” Dikos said. “The ownership mentality is a competitive advantage.”
Southard agrees, which is why he’s moving thousands of miles south to open in a new market to help ignite the company’s next phase of growth.
“Generativity is paramount for us. We’re not going to be a big blowup brand that makes a bunch of money and files for an IPO. The legacy we leave is a brand that builds people as much as it builds restaurants,” he said. “If we sell a 25-pack franchising deal, how do we guarantee consistency? The people we put in our franchising system are people we care about deeply and that helps grow the brand and valuation inherently, so we don’t have to fat-hog it.”
“You want to talk about motivating a team? When a founder puts his money and guarantee where his mouth is, that’s a sign this thing is moving to the next step,” Dikos said. “It’s like a general on a horse running into a battle. That gives us the confidence to take this risk.”
Killer Burger’s first location in Texas will be located at 12834 Potranco Road in San Antonio. It is one of several franchised Killer Burger units financed by Gulf Coast Franchise Finance, a division of Gulf Coast Bank & Trust Co.
Contact Alicia Kelso at [email protected]
