Rank no. 83 – Culver Franchising System Inc. – US
Products & Services: Frozen custard & specialty burgers
Number of Locations: 484
Total Investment: $1.44M – 3.08M
Began Franchising: 1988
About Culver Franchising System Inc.
After working with his parents in their restaurants, Craig Culver decided it was time to open one for himself. In 1984 Culver, with the help of his wife Lea and parents George and Ruth, transformed the A&W his parents owned since the sixties into Culver’s Frozen Custard.
Its founder’s family inspired the menu for the initial Sauk City, Wisconsin, restaurant. When Culver’s mother made hamburgers, she would put a dab of butter on the crown of the hamburger buns before toasting them; something her children felt made them taste better. Today, employees at each Culver’s location use the same technique when making their ButterBurgers.
There are Culver’s locations in sixteen states. All Culver’s franchisees are owner/operators.
Arizona, Colorado, Iowa, Illinois, Indiana, Kansas, Kentucky, Maryland, Michigan, Minnesota, Midwest, Nebraska, North Dakota, Ohio, South Dakota, Southeast, Southwest, Texas, West, Wisconsin, Wyoming.
Startup Costs, Ongoing Fees and Financing
Franchise Fee: $55,000
Ongoing Royalty Fee: 4%
Term of Franchise Agreement: 15 years, renewable
Liquid Cash Available: $350,000 – $600,000
30% of all franchisees own more than one unit. Number of employees needed to run franchised unit: 40 – 50. Absentee ownership of franchise is NOT allowed. (100% of current franchisees are owner/operators).
|FINANCING TYPE||IN-HOUSE||THIRD PARTY|
How This Franchise Supports Franchisees
Franchise Ranking History
|Industry||Fast casual restaurants|
|Founded||Sauk City, Wisconsin, U.S. (1984)|
|Headquarters||Prairie du Sac, Wisconsin|
|Key people||Craig Culver, CEO
Lea Culver, Co-Founder
Phil Keiser, President and COO
Joe Koss, CFO
|Products||Frozen custard, Butterburgers|
Culver Franchising System, Inc. is a privately owned and operated fast casual restaurant chain that operates primarily in theMidwestern United States. The first Culver’s opened in 1984 in Sauk City, Wisconsin. The chain now has 475 restaurants across the United States.
In 1984, Sauk City restaurateur George Culver purchased the A&W on Phillips Boulevard (U.S. Highway 12) and began renovating it. On July 18, 1984, along with wife Ruth, son Craig, and daughter-in-law Lea, he opened the first Culver’s Frozen Custard and ButterBurgers.
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In 1987, the Culvers were approached about franchising a restaurant in nearby Richland Center. The Culvers agreed, granting the franchisee a loose licensing agreement, charging no fees or royalties. Because the franchisee had invested very little of his own money, it was a simple matter for him to walk away a year later when he decided he no longer wanted to be in the restaurant business.
As a result of this experience, the Culvers established a set of standard franchising procedures that form the basis for those currently used by Culver Franchising System, Inc. Three years later, they tried again in Baraboo and business quickly doubled. Soon after, the increased recognition that the second store earned this small-town chain prompted expansion into the Madison and Milwaukee areas. At the end of 2011, 445 Culver’s restaurants were open in 19 states.
As of 1993, Culver’s was still a small, local chain, with only 14 restaurants across southern Wisconsin. Culver’s first restaurants outside the state were opened in Buffalo, Minnesota in September 1995, Roscoe Illinois in December 1995, and Dubuque, Iowa, in November 1996. In February 1997 the company opened the first Culver’s in Texas.
Beyond the Midwest
The current franchising strategy is one of contiguous growth at a pace of about 40 new stores per year. The chain expanded intoColorado Springs, Colorado, Cheyenne and Wyoming in 2005, followed by an opening in Bowling Green, Kentucky in July 2006. Culver’s shifted its attention to developing markets beyond the Midwest.
Culver’s has expanded to the Phoenix metropolitan area. Culver’s hopes that the two restaurants opened in north Phoenix and the eastern suburb of Mesa in the latter half of 2007 would be the first of “up to 30” such franchises in the Phoenix Valley. As of August 2012, Arizona had 13 locations. Culver’s also opened in South Carolina in 2012.
In 2011, Culver’s expanded into Utah, when Kristin and Tom Davis of Wisconsin relocated to Utah and opened a 100-seat Culver’s franchise in Midvale. The couple signed a development agreement for four locations in the southern half of Salt Lake County.
One important aspect of Culver’s future expansion strategy hinges on the success of the Metro-98 prototype. Developed in 2006 and first constructed in Fort Dodge, Iowa, the Metro-98 is much more compact than the traditional 120-seater commonly built through much of Culver’s expansion. While the Metro-98 has less seating to offer guests, it also reduces the amount of land needed for construction by around 20%. Culver’s hopes that the smaller size and lower startup costs will enable them to penetrate urban markets such as Chicago, St. Louis, Dallas, and Denver where space is at a premium. Another significant departure from the traditional design is the flat roof in place of the sloped blue roof that has become iconic of Culver’s throughout the Midwest. Additionally, Culver’s is considering the development of an even smaller 75-seat option at this time.
Venture into casual dining
Culver’s Blue Spoon Cafe, opened its first store in Prairie du Sac, Wisconsin in 2000 as a soup-sandwich-salad restaurant as Blue Spoon Creamery Cafe. The name Blue Spoon comes from the color of the spoons used at the Culver’s fast food restaurants. A second store in Middleton, Wisconsin was open for two years, but closed in August 2010.
Culver’s menu features Culver’s trademark ButterBurgers and frozen custard, (which is also sold in bulk). The rest of the menu runs the gamut from pork and fish, fried chicken to salads and specialty sundaes. The menu is divided into seven sections: sandwiches, sides, drinks, kids meals, dinners, salads, and desserts. Items are made to order and are served at table-side. All Culver’s restaurants resemble one another. Culver’s also features its own brand of root beer.