And in that life, there are some major themes emerging. But here is the most basic theme: The nation's appetite for burgers remains strong -- listen, despite its struggles, McDonald's (MCD) still sells a load of burgers. Statistics show that nearly 50% of consumers purchase burgers from fast-food restaurants at least once every three weeks, and approximately 21% of people eat them at a fast-casual chain at least once a month. The number of burger lovers who make their own burgers once a week has only increased by 3% since 2007.
What the likes of Shake Shack, Smashburger and Five Guys, a.k.a. the "better burger" chains, are causing is fundamental changes in the industry. The changes reach well beyond what appears on the menu. It has to do with a U.S. farming industry that is ill-equipped to handle surging demands for all-natural burgers. Every Shake Shack that opens to crowds roaring for hormone-free burgers places extra stress on the beef supply chain. In all honesty, organic beef prices may continue to climb over the next five to 10 years due to the rise in better burger fast-food chains. A couple of other major themes are below.
Refranchising: Refranchising is basically a restaurant operator unloading its owned stores onto franchisees. It does this to reduce operating expenses and collect more lucrative fee income from franchisees. McDonald's is refranchising hundreds of restaurants. Wendy's (WEN) has unloaded a ton, and will divest more in coming months.Burger King (BKW) is mostly franchisee operated. Even juice maker Jamba Juice (JMBA) is going "asset light," as those in the business call it.