Supersizing Gourmet Burger Chains



They will gladly pay you, sometimes with some equity, for expansion capital to make even more hamburgers today.

As Americans go gonzo for the gourmet burger, small upscale chains are beefing up production thanks to private equity and lenders. Increasingly, it seems the lunchtime dining crowd wants an actual hamburger, preferably made of high-quality cow.

That adds another problem to the woes of established downmarket chains.

Consumers have drifted from Mickey D’s, and while the Shake Shacks and Five Guys of the gourmet burger business gorge themselves on revenue, Ronald McDonald gave up on a high-quality product.

McDonald’s Corp. announced in May, after a four-year run at the upscale market, that the Golden Arches eliminated Angus burgers from the menu, chalking it up to high prices — and, according to John Barone, president of research firm Market Vision Inc., they won’t come down for at least a few years. Perhaps Mickey D’s should have cited its stock price, instead — it has lagged the Dow substantially over the past 12 months. The future isn’t bright, either: According to a survey out earlier this year from Market Vision, McDonald’s doesn’t even make the top 10 list of restaurants favored by millennials — those defined as being between 23 and 36 years of age.

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