Fatburger Expands, Thanks to Kanye West

Rapper Turned Franchisee to Open Chain's First Store in Chicago

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CHICAGO (AdAge.com) -- Here's a cheap marketing strategy that gets attention: sign a celebrity as franchisee. Fatburger, the Santa Monica, Calif.-based fast-food chain, is expanding into Chicago behind Kanye West, one of the city's favorite sons. The rapper has rights to open 10 locations in the city's metropolitan area, with the first slated to open in September.
Kanye West is the latest African-American tastemaker to aid in Fatburger's expansion.
Kanye West is the latest African-American tastemaker to aid in Fatburger's expansion. Credit: AP

"You're looking for a way to be able to call attention to what generally would be a yawn, in terms of Chicago and restaurants," said Robert Passikoff, president of Brand Keys. "But given that it's his hometown, people are going to attribute more realism to it than turn and say, 'It's another celebrity taking another check.'"

Fatburger declined to comment for this story, and also declined to comment on whether it works with an ad agency. Mr. West did not immediately respond to requests for comment.

Celebs back Fatburger
The rapper, producer and sometimes political activist isn't the first celebrity franchisee to stake new territory for the 56-year-old chain. Fatburger has focused on African-American tastemakers to aid its expansion. Last year, talk-show host Montel Williams opened stores in Colorado and rapper Pharrell Williams opened the first locations in New York. Former Baltimore Raven Orlando Brown also bought rights to open Fatburgers last year in Washington.

At the same time, Fatburger's measured-media spending declined, according to TNS Media Intelligence. The company spent just $336,000 in 2006 and $192,000 in 2007. Perhaps the biggest fish in the Fatburger celebrity pool is former investor Earvin "Magic" Johnson, who held a stake in the company from 2001 to 2003. Mr. Johnson now owns more than 30 Burger King restaurants.

"It's a smart move on both Kanye's and Fatburger's parts," Mr. Johnson said. "Kanye has a big brand and it takes someone like him to bring Fatburger to Chicago. It just shows you that Kanye West is not only a great entertainer but a smart businessman as well."

Still, it's a relatively surprising alliance for Mr. West, who has made a name for himself in high-fashion circles. For instance, during a 2007 performance honoring Salvatore Ferragamo on Rodeo Drive, Mr. West said, "I'm glad I got the chance to earn back some of the money I've spent on this street."

Darren Tristano, exec VP of restaurant consulting firm Technomic, said Fatburger, known of course for its burgers, is also "a pretty cool place to go." The restaurants have a '50s-style, retro design and feature web-enabled jukeboxes with 150,000 songs to choose from.

'Upscale' reputation
"It's not your 99-cent burger place," Mr. Tristano said. "It does have somewhat of an upscale feel and reputation. Just because it's fast food doesn't really mean it's not upscale within fast food."

With heavy dependence on word-of-mouth, Fatburger has gained a cult following for its one-third-pound made-to-order burgers -- and sassy signage. The stark, yellow-and-black signs focus on quality with slogans like "Heat lamps. Where burgers are sent for bad behavior." Although the chain does have a veggie burger on the menu, most of the ads are crafted for meat eaters. One sign from the archives jokes, "Attention carnivores: Fatburger's this way. Attention vegetarians: Hey look, a tree."

Still, Mr. Tristano said the company is going to have to do more as they near the benchmark of 100 U.S. stores. (Fatburger had 88 U.S. locations by the end of 2007.)

Mr. Tristano noted that Fatburger's 53 franchised restaurants brought in an average of $800,000 each in 2007, for a total of about $42 million. Most fast-feeders aim for ad budgets between 2% and 3% of sales, which would put Fatburger's target conservatively between $800,000 and $1.2 million.

While he said the celebrity factor will boost brand awareness right now, "obviously spending on marketing is going to the best way to do it."
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