The popular hamburger chain with the funny name — Fuddruckers — is back in South Florida. That’s thanks to two Miami investors who identified an attractive business opportunity and were nostalgic for tasty burgers.
“We used to take our kids to Fuddruckers when they were small, and we loved to eat there,” said Marcelo Montalvan, who with his wife, Berny, are the franchisees who own and operate five Fuddruckers in Doral, Hialeah, Kendall, Pembroke Pines and Palmetto Bay.
Like other South Florida residents, they noticed that several Fuddruckers operating in the area during the 1990s were closing, with the last turning off its grill in 2007. After surveying the restaurant market, they saw that traditional fast-food outlets like McDonald’s were rapidly losing customers and that many consumers — especially families — were turning to fast-casual restaurants, which offer better quality food at prices sandwiched between fast-food outlets and standard, full-service restaurants.
So in 2004, the Montalvans secured a franchise agreement with Texas-based Fuddruckers, and they opened their first restaurant on NW 19th St. in Doral.
“The Doral store was an immediate success,” said Berny Montalvan, vice president of Vitafoods Enterprises, the family-owned company that owns the franchises through separate operating units. Marcelo, her husband, is the president.
Since opening, the Doral store has regularly been ranked No. 1 or No. 2 among all Fuddruckers stores nationwide. Four other Fuddruckers openings followed, the last being the site on Kendall Drive in 2014.
“I knew very well what the good locations were in the area,” Marcelo said. “I drove around Miami-Dade and Broward routes constantly on my earlier jobs and for our prior business. The big challenge is to find the right location at the right price.”
Before getting into the restaurant business in 2004, the Montalvans ran several GNC vitamin stores. They decided to sell the vitamin outlets and invested the proceeds in their Fuddruckers operations.
“Each of the South Florida Fuddruckers cost between $1.6 million and $2.5 million to build, equip and launch,” said Marcelo. “The investment required depends on the size of the restaurant and the location,” he said. “We lease all our properties.”
The Montalvans, who came here from Nicaragua 32 years ago, associated themselves with a popular restaurant that is expanding in the United States and overseas through franchises.
The Fuddruckers brand — which includes the phrase “World’s greatest hamburgers” — is owned by Luby’s Inc., a large restaurant operator based in Houston, Texas. Aside from Fuddruckers, Luby’s has two other principal brands — Luby’s Cafeteria (mainly in Texas) and Cheeseburger in Paradise, as well as a food services company called Luby’s Culinary Services.
Fuddruckers has been around for over 35 years. It was founded in Texas in 1979 as Freddie Fuddruckers by restauranteur Ray J. Romano, who later left the company and set up Romano’s Macaroni Grill.
Following Romano’s exit, Fuddruckers changed owners, went into bankruptcy and later was acquired by Luby’s.
Publicly traded Luby’s owns and operates 175 restaurants under its various brands, and had sales of nearly $272 million during the first three quarters of fiscal year 2015.
Luby’s owns and operates 74 Fuddruckers locations, and is the franchisor for 106 Fuddruckers in the U.S., Canada, Latin America and Europe. In addition, a licensee operates 31 restaurants under the Fuddruckers brand in the Middle East.
There are two other Fuddruckers in Florida, both in Orlando, but they are operated by another franchisee.
What does Fuddruckers offer customers?
The Palmetto Bay Fuddruckers on South Dixie Highway is the largest of the five in South Florida, covering 7,500 square feet, seating more than 250 inside and 36 on the patio.
It is a pleasant, open environment, with large windows and spacious seating, decorated with old curios like a Texaco gas pump, a toy fire engine, a radio and posters. Kids can play games in an arcade adjacent to the dining area.
Customers order and pay at a main food counter, serve themselves soft drinks or order shakes, retrieve their orders when a pager tells them the food is ready and add condiments. Employees pick up food trays and clean the tables after clients finish eating.
At all Fuddruckers, hamburgers are the main characters: a half-pound burger, cooked to taste, served on fresh buns baked daily at each restaurant.
The burgers come with fries and a drink ($8.69), fries and dessert ($9.69), or fries and a shake ($10.29). There are three-cheese burgers, bacon cheddar burgers, bourbon sauce burgers, portobello mushroom burgers and a herd of others under the make-your-own category.
The restaurant also offers chicken sandwiches, grilled chicken, crispy chicken, steaks, fish, salads, shakes, sides galore, beer, wine and a separate display section with a large variety of desserts, including Latin specialties like alfajores (a sweet popular in Argentina).
For the adventurous, there are exotic burgers made with buffalo and elk meat.
Fuddruckers wants franchisees to offer their popular trademark menu items and garnishes in all their restaurants. But franchisees can add items they think people will like. For example, the Palmetto Bay menu includes soups, chili, fish and Latin desserts.
“Our most popular plate is the half-pound burger combo, but clients also like our buffalo burgers,” said Marcelo. “People love the shakes and the desserts.”
During a recent visit on a weekday at noon, the restaurant was about half full, mostly families.
“Families are our biggest demographic,” Berny said. “We also get business people, local workers and singles. We have a lot of repeat customers.”
The quality and taste of Fuddruckers burgers is a key attraction, the owners and their customers say.
“We use premium beef that is ground here every day and is never frozen,” Berny said. “We bake our buns and cookies fresh daily, and you can see that the tomatoes and lettuce — they’re displayed in that colorful arrangement — are always fresh. Our restaurant is clean, and our employees are happy to help. All this make a big difference to customers.”
“People are looking for great-tasting hamburgers and friendly service, and they find them here,” Berny said.
Carlos Diaz works in Hialeah and has been eating at the nearby Fuddruckers on West 49th Street for about three years. Hamburgers are his favorite. “I eat there two or three times a week at least,” Diaz said. “Their hamburgers taste like they were cooked on your barbecue at home. They use fresh meat, not frozen like other places, and it doesn’t have any additives. It tastes like meat is supposed to taste.”
Diaz, who also likes Fuddruckers salads and hot dogs, has tried other fast and casual food outlets near where he works but always returns to Fuddruckers. “The prices are affordable, the quality is always good, and the people who work there are always friendly and smiling.”
Luis Rodriguez, a Kendall resident who works in international sales, has been a Fuddruckers customer for several years. “I go to the Doral Fuddruckers three to four times a week, and sometimes another location,” he said.
“I come in so frequently the cashiers put in my order as soon as they see me. I usually have the grilled chicken sandwich on whole wheat, with no spices. Sometimes, when I want to overeat, I’ll have the buffalo burger with sweet potato fries.”
Rodriguez enjoys the food, but he prefers Fuddruckers to any other restaurant because it provides him with “an oasis” in the middle of the day. “While I’m eating, I use the WiFi and my iPad to read, catch up and relax. The quality of the food is very good, the prices are reasonable. It’s clean, and even when it’s full it’s quiet and you have plenty of room.”
A restaurant expert at Miami Dade College gave Fuddruckers high grades.
As a brand, “Fuddruckers is here to stay,” said Jesus Vazquez, program coordinator at Miami Dade College’s Miami Culinary Institute.
“The atmosphere is upbeat, with posters and antiques from famous movies and actors decorating the restaurant, making it an appealing place for families and customers of all ages,” said Vazquez, a restaurant consultant and entrepreneur. “Fuddruckers offers its customers a consistently great burger and shake at a reasonable price. While burgers are their signature, the menu offers a variety of sandwiches, platters and salads. Customers get to customize their meals with a “Build Your Own” salad bar, which includes sun-ripened tomatoes, lettuce, sliced onions, dill pickles and classic cheese sauce.”
Commenting on a recent visit he made to the Fuddruckers in Palmetto Bay, Vazquez said he enjoyed a “delicious, satisfying and reasonably priced” meal. “The fact that I could ‘create’ my own burger with the ingredients and quantities of my choosing from the ‘Build Your Own’ bar made the burger taste that much better. Being able to have a beer with my burger didn’t hurt, either,” he said.
But, Vazquez warned, success is not guaranteed to Fuddruckers or any other fast-casual competitor.
“Today, in order to succeed, fast-casual restaurants need to appeal to customers of all ages,” he said. It’s about satisfying comfort food, incorporating healthy ingredients, at a reasonable price. And you must have a strong lunch, dinner and weekend traffic.”
Managing the food factories
The five franchises run by the Montalvans typically serve about 28,000 people per week, and their combined annual revenues are about $18 million.
The Doral and Pembroke Pines outlets regularly rank among the top Fuddruckers/Luby’s sellers nationwide, Marcelo said.
To make sure that the restaurants operate smoothly seven days a week and maintain top-quality service, Marcelo relies on five well trained managers and five assistant managers. At the Vitafoods headquarters, he keeps track of activity at each restaurant — reception area, kitchen, dining room, etc. — through closed-circuit TV. He usually spends a full day at each restaurant every day, six days a week, helping out in the kitchen (he’s also a cook) and taking orders. “He puts in 80 hours a week,” said Berny, checking deliveries and inventory, the quality of myriad products brought in by vendors, managing personnel, and talking to employees and customers.
In an industry where employee turnover is high, Fuddruckers has been able to maintain much of its staff. “We have 260 employees, and some of our people in Doral have been with us 11 years,” he said.
Fuddruckers is far from alone in the fast-casual category. Several new competitors have joined the South Florida restaurant smorgasbord in recent years — like Smashburger and the Brazilian Giraffas chain, to name just two — while others, including Chipotle Grill and Panera Bread, have been around for years.
Marcelo doesn’t underestimate the competition, but he believes there are still opportunities in the local market.
“Our restaurants are doing well,” he said. “What we offer is high quality and economical prices, and customers have responded. Our plans? Open five more in Miami-Dade and Broward.”
Business: The five Fuddruckers restaurants in South Florida are franchises owned and managed by local investors. Fuddruckers specializes in hamburgers made from freshly ground premium beef. They also sell a variety of other items, including chicken sandwiches, crispy chicken, burgers made from exotic meats like buffalo and elk, salads, fries, shakes, and desserts. Fuddruckers offers casual dining in an attractive, spacious environment. The Fuddruckers brand is owned by Houston-based Luby’s Inc., which operates restaurants under the Luby’s Cafeteria, Fuddruckers and Cheeseburger in Paradise brands, among others, as well as food management services. Luby’s owns and operates 74 Fuddruckers and is the franchisor of 106 other Fuddruckers in the United States and overseas. There are two other Fuddruckers in Orlando that are not related to the Miami franchise operation.
Ownership: The Fuddruckers franchises in South Florida are part of Vitafoods Enterprises, a family-owned company set up in Miami by a husband and wife team: Marcelo and Berny Montalvan.
Founded: Fuddruckers was founded as Freddie Fuddruckers in Texas in 1979 by Ray J. Romano, who later left the chain and went on to establish Romano’s Macaroni Grill. After Romano, Fuddruckers changed owners, declared bankruptcy and eventually was acquired by Luby’s.
Corporate headquarters: Luby’s is based in Houston, Texas.
Regional headquarters: Vitafoods’ main office is at 8603 S. Dixie Hwy., Miami.
Regional management: Marcelo Montalvan, president, and Berny Montalvan, vice president, of Vitafoods Enterprises.
Operations: Five Fuddruckers in South Florida: Doral, Palmetto Bay, Hialeah, Pembroke Pines and Kendall. Vitafoods opened its first Fuddruckers in Doral in 2004.
Sales: The five South Florida locations have combined sales of more then $18 million per year.
Websites: fuddruckers.com and lubysinc.com
Sources: Vitafoods Enterprises, Fuddruckers, Luby’s Inc., media reports.