Culver's CEO shares what’s next after reaching 500 units

Quick-service chain Culver’s reached the 500-unit milestone on March 3, with openings in Cedar Falls, Iowa, and Wixom, Mich., attaining a size the co-founder and chief executive Craig Culver could not have pictured when he opened the first Culver’s with his wife and his parents in 1984.

“Looking back to when we opened our first restaurant, my dream was just to get through the year and make a living with the first Culver’s, never really thinking that someday we’d have two restaurants, much less a franchise company,” Culver said.

The franchise company almost didn’t happen, he said, recalling his first attempt to franchise the concept after opening the third company-owned restaurant in 1987. Ultimately, that first partner didn’t work out, “and I swore I’d never do it again,” Culver said. But he and his family tried again in 1990, when the first of several hundred franchised locations successfully opened.

Today the Prairie du Sac, Wis.-based chain, which includes nine company-owned restaurants, operates in 21 states, including markets far from its Midwest stronghold, like Arizona and Florida. Part of that growth comes from demand from Midwesterners who love Culver’s and retire or snowbird in warmer states, Culver said. He also noted that several initiatives are keeping the brand relevant and widening its appeal, including a reimaging program and successful limited-time offers like last year’s Colby Jack Pub Burger and Pepper Grinder Pub Burger.

Culver said the chain is planning to open 35 new units in 2014.

“Once we get past this winter — and in spite of how bad the weather has been, we’re still up over last year — hopefully things will break loose and we’ll have a great rest of the year,” he said. “I’m an optimist, but if I weren’t, I guess I shouldn’t be in this business.”

Why was reaching 500 locations in 30 years the right pace for Culver’s, when several franchise companies in quick service seem to want to open 500 units in just a few years?

We’ll never be like those folks, I think. We’re in the real estate business as well, and I don’t know if any of those fast-growing guys have freestanding units, but we build our buildings. It’s a $2.5 million expense to get into the business. But I like what we do with our franchisees, because generally they own their building and the land, and that’s equity that grows for them over time, unless we have another 2008.

My dad and I thought about it that way: Buy the land, build the building and someday we might retire. But I never dreamt it would be like this 30 years later. I don’t have my sights set on some end goal of how many restaurants I want to see some day. My dad told me what’s important isn’t how many restaurants you have, it’s how many good restaurants you have.

What’s been the biggest change at Culver’s over those 30 years, or just in the past few years?

I guess you’d have to ask somebody else, because I don’t notice the changes around here so much. I want to continue to build on … the culture we have created here. You surround yourself with great people and don’t lose the great people you already have. Yes, there have been new menu items and changes to the building design, but the culture aspect of Culver’s has been what’s so important, and that’s only gotten stronger.

How has it been for you to grow Culver’s so far beyond Wisconsin and the Midwest?

I was in Utah just two days ago, and when I got into one of our restaurants so far away from home and saw it so packed, that’s just a “holy cow” kind of moment. The hair on the back of my neck stood up, and it was so exciting. We’ve built this core of fans in the Midwest, and we’re glad some of them have moved to different states to build out our restaurants.

Menu moves, franchising and more

(Continued from page 1)

Some competitors are doing large-scale reimaging as part of huge refranchising deals with large, multiunit franchisees. How have you advanced your remodeling program with your franchisees?

We believe in staying relevant to our guests, which does mean some change to our old “blue-tops.” In some cases we’ve torn them down and built brand new buildings, or we’ve totally redone the interiors and exteriors, and we’ve got real buy-in from franchisees. We’re not financing these deals — they are — and they’ve had a lot of success along the way, so they’re willing to do it. We had 40 remodels last year, and this year we’ll have just as many.

Where does Culver’s come down on the current dichotomy in quick service between menu simplification and being prolific with premium limited-time offers, like your Pub Burgers?

We continue to do our main thing, and that’s our burgers. Like others, we have taken things off the menu to streamline it a little bit. But the Pub Burgers have done extremely well for us, and we’ll continue innovating along that line. We’ll continue the “Welcome to Delicious” ad campaign as well, and I really like the direction we’re going there. We’re going to look for some menu items that might be totally out of the box for us. My job is to be a dreamer and come up with some menu ideas that work — and there have been so many that haven’t, but every once in a while you really hit on one.

Of the issues outside your control, such as the weather, commodities, or the debates around minimum wage or the Affordable Care Act, is any one of those demanding more of your focus right now?

I was on Wisconsin Public Radio a few weeks ago to celebrate our 30th anniversary, and somebody called in to ask me my position on the minimum wage. I was on the spot there, but I’ve got an idea of where I’d like to see it go, and I really believe it should be a two-tiered system. There could be a youth wage, and then an adult wage, and that could be what the president is proposing or some other number. More pay for the adults would help them get closer to a living wage. I don’t know if it’s a true “living wage” or not, but it would get them closer to it….

We have a responsibility to create careers for people in this industry, so how can we have people stay with us to become managers, or the president of the company, or franchisees owning their own restaurants?

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN