🍟 9/5/2022 – Mr. Beast Should Franchise Beast Burger

DEEP DIVE

Why Mr. Beast Should Franchise Beast Burger

Yesterday, Jimmy Donaldson AKA Mr. Beast, opened his first physical Beast Burger location at The American Dream Mall in East Rutherford, New Jersey. 

The Beast Burger brand originally launched via ghost kitchens in 2020, making yesterday a milestone moment where fans and customers alike could walk up and order their Beast Burger in person for the first time.

This won’t be the only Beast Burger restaurant that you’ll see – Mr. Beast has big plans for his burger brand. 

In today’s newsletter, I make the case that Mr. Beast is sitting on a multi-billion dollar brand in the making (as long as he franchises it). 

But first…

Who’s Mr. Beast?

Jimmy Donaldson, the creator of the YouTube channel “Mr Beast” is a 23 year old YouTube sensation. 

He’s been YouTubing since he was 13 years old, and has made viral videos ranging from giving a homeless person $10,000, to recreating Squid Games (which has racked up an absurd 286 million views).

Mr. Beast also spends a ridiculous $4,000,000 per month on creating his videos. 

Why? 

Because his goal is to be the top YouTuber in the world. The dude lives for this shit – and he’s gone on record in numerous interviews stating he doesn’t care about making money, he literally just wants to make the best YouTube videos on the planet.

So far, it’s all going according to plan. Today, he’s the 3rd largest YouTuber in the world, and his subscriber statistics are outrageous:

  • Main channel: 103 million subscribers
  • All US channels: 183.2 million subscribers
  • International channels: 47.3 million subscribers 

And given his massive audience, he’s been able to turn that attention into a few successful ventures already..

Feastables

In January of this year, Jimmy launched Feastables chocolate bars. They’re made with organic cacao, and only have 4 ingredients in total – a healthier and natural alternative relative to what’s on the market. 

Within 72 hours of launch, he sold 1M+ bars and has already generated $10M+ in revenue. 

In typical Mr. Beast fashion, he integrates Willy Wonka style golden tickets, allowing customers to win all sorts of prizes, from Tesla’s to Jet Skis. 

Mr Beast Philanthropy 

In October of 2020, Jimmy Launched his own charity, Beast Philanthropy. 

Beast Philanthropy currently operates a food pantry with a mobile food distribution network, established to address the food insecurity needs of remote and under-served food deserts.

A “food desert” is a community that doesn’t have access to traditional food banks or food pantries.

To date, the charity has delivered 1.2M+ meals, feeding over 110K individuals

Beast Burger

During covid in 2020, Mr Beast Launched Beast Burger – a delivery only food chain that operated via ghost kitchens across the country.

Menu items include loaded fries, smashed burgers, chicken sandwiches, and limited time offers like Shrek-themed quesadillas.

Since launch, he’s opened over 1,000 ghost kitchens across the United States and Europe, and the brand has done over $100 million in revenue.

But yesterday was the beginning of a new journey – *physical* Beast Burger restaurants. And to understand Jimmy Donaldson’s ambitions with his burger brand, listen to what he said on a podcast with Logan Paul:

“Here’s the way I look at it – if something like f*cking Five Guys can be successful, why can’t Beast Burger? As long as we have competitive prices and the food tastes phenomenal – which I think it does – I just don’t see why it won’t work”. 

He clearly wants to make Beast Burger a national brand, and even called out Five Guys (still love you Five Guys 🥲). 

So this begs the question – given that he’s a millionaire already, and has the funds to build more Beast Burger locations on his own…

Why Franchise It?

Let’s start with the obvious answers that apply to every franchise:

1. Less Overhead

Majority of franchises today barely operate any of their own stores. From Domino’s to OrangeTheory, franchisors increasingly opt for an asset-lite model, in favor of collecting royalties from their franchisees. 

2. Less Capital Expenditures

By franchising the concept, Beast Burger can outsource the capital required to build new stores to franchise owners around the country. They also wouldn’t have to manage staffing at locations, as that also falls under the tasks a franchisee takes care of.

Beyond these reasons, Beast Burger would also have a few MASSIVE advantages relative to other franchises..

3. Mr. Beasts Audience

Jimmy has 183M subscribers on YouTube alone, nevermind the 15.3M he has on Twitter, 19.8M on Instagram, and 43M on TikTok. 

Factoring in his international YouTube channels, Mr. Beast has more followers/subscribers than the population of the United Kingdom, Australia, Spain, Canada, and Mexico…combined!

And it’s not vanity metrics, his audience is engaged AF, hence why over 10,000+ people showed up to The American Dream Mall yesterday. 

That amount of people showing up should not be overlooked.

Mark Wahlberg opened Wahlberger’s Boston Flagship in 2010 – we’re talking Marky Mark, one of the most beloved New Englander’s to walk the planet – and he’d never come close to a grand opening like what Mr. Beast pulled off!

In the context of franchises, this means a very important thing – Mr. Beast can drive customers to stores – guaranteed. And assuming the food and service is comparable or better than other options, they’ll keep coming back!

In addition to customers, the sheer scope of Mr. Beast’s audience means he’s bound to have some franchise owners that are fans. I firmly believe that with his marketing funnel, he could sell franchises in every territory across the United States in under a year.

After everything you’ve learned about him, would you bet against him? 

4. Mr. Beasts Resources

When you have an audience the size of Mr. Beast, and an impressive talent management company like Night Media on your side, big opportunities will come your way that few brands can even dream of.

An example of this is when Dreamworks let him license Shrek’s IP for a limited time quesadilla product via Beast Burger. The product was a smash hit, and provided a fun, unique experience only available to customers of Beast burger.

If on top of his hundreds of millions of social media followers he also had thousands of Beast Burger locations open and operating, the in-store experiences and limited-time offers he could provide would be unmatched.

I can see him basically recreating the magic of McDonald’s happy meals, but for millennials, gen-z’s, and heck even older generations. 

Bonus: How Would I Do It?

If I was on Mr. Beast’s business team, these would be my first two steps:

1. Hire An Experienced CEO To Run The Franchise 

When I say experienced, I mean someone who knows franchise development, restaurant operations, as well as supporting, training, and scaling franchisees.

Bringing in a veteran is part of the playbook Mr. Beast is used to running. For Feastables, they brought in the former President of RxBar (acquired by Kellogg for $600M) to run the company. 

It’s a very smart operation Jimmy has with Night Media – Jimmy does what he does best (create YouTube videos) and lets others run the businesses under his brand. He should do the same for Beast Burger.

The biggest objectives for the CEO would be:

– Figuring out how to best convert Jimmy’s social following into franchise sales

– Keeping up with training and supporting the undoubted wave of franchise owners that are chomping at the bit to open their own Beast Burger franchise 

2. Target Tier One Cities

New York, Chicago, Los Angeles, San Francisco, Boston, etc. 

After what we just saw in East Rutherford, I’d target every tier 1 city in America and establish a “flagship” store of sorts in each one. Mr. Beast can make an appearance for each opening, which would bring thousands of customers and generate millions of impressions in local PR.

The grand openings alone will let the entire city and surrounding region know that Beast Burger has arrived, and from there you can grow into tier 2, 3, etc. type markets.

Overall, franchising is a model that accelerates scale. If Mr. Beast wants to expand his brand as fast as possible, while spending as little of his own capital as possible, franchising is 100% the way to go.

Just like he says in his conversation with Logan Paul, as long as the food tastes great and pricing is competitive, why won’t this work?


FRANCHISE HEADLINES

Big Chicken…Anotha One! 🐔

Big Chicken, founded by Shaq, recently signed another large multi-unit deal – this time a 45-unit agreement in Florida. This comes about 1 year after they launched franchising – the brand now has 200+ units in development, an impressive first year of growth! I’ll be excited to see the numbers once some of these stores are open and operating.

The King of Fast-Food In America 🍔

In 1994, Greg Flynn graduated from Stanford Business School. He didn’t start a world famous company, become a VC, or go into tech – instead he bought 8 Applebee’s. Today, he’s the largest franchise owner in the world, and in addition to Applebee’s, he owns brands like Taco Bell, Wendy’s, Panera, Pizza Hut, and Arby’s. Read about his journey here.

Disclaimer: This Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained on this site constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All Content in this email is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the email constitutes professional and/or financial advice, nor does any information in the email constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other Content in this email before making any decisions based on such information or other Content.