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Smashburger CEO Jim Sullivan Talks Franchising, Cyclospora and Pricing
Brief
Smashburger CEO Jim Sullivan joined Bloomberg to explain how the chain is scaling via franchising, managing food-safety headlines, and protecting margins. After the host noted +2.4% same-store sales in the fourth quarter and a plan for 12 new franchised units, Sullivan affirmed the company will move toward an asset-light model over the next 18 months and ramp both traditional and nontraditional franchising. He described a hybrid site-selection process that pairs an algorithmic performance model with on‑the‑ground market review, targeting trade areas that index above 100. In response to recent Cyclospora/Salmonella headlines, Sullivan detailed extra produce precautions (double washing whole-head green‑leaf lettuce, additional washing of pre-washed product) and a voluntary temporary removal of jalapeño; he said suppliers were verified and guest traffic remains positive. Facing beef inflation, Smashburger introduced a $4.99 Everyday Value item and is emphasizing other proteins and product innovation to protect margins.
Why it matters
Host (Speaker 2) reported Smashburger North America delivered +2.4% same-store sales in the fourth quarter and said the chain plans to open 12 new franchised locations this year.
Key details
- Jim Sullivan (Smashburger CEO) said the company is "completely committed" to franchising and plans to shift to an asset-light model over the next 18 months, accelerating both traditional and nontraditional franchise development; site selection uses an algorithm plus on-site review and targets trade areas that index above 100 versus the national average.
- On recent produce outbreaks (Cyclospora/Salmonella), Sullivan said Smashburger uses whole-head green-leaf lettuce and pre-cut product, has instituted double-washing of whole heads and an extra wash on pre-washed lettuce, verified supplier safety, and voluntarily removed jalapeño as a modifier until further review; he reported no guest questions and no traffic decline.
- Sullivan said beef inflation has pressured margins; Smashburger introduced an "Everyday Value" $4.99 offering, is disciplined on pricing, and is offsetting beef cost pressure by promoting other proteins and product innovation.