Steakhouse king picks Penrith for cult burger chain launch
Hospitality entrepreneur Bradley Michael will open the country’s first Five Guys restaurant in Penrith, in outer Western Sydney, after reversing earlier plans to launch the cult American burger and fries chain in the Sydney CBD.
Mr Michael said “astronomical” rental demands from CBD landlords despite the city shutting down completely during the pandemic and the inability to find a suitable venue pushed his Seagrass Hospitality (which secured the master franchise rights to Five Guys last year) to look for opportunities in the major suburban hubs.
“$1.5 million in annual rent for a joint in the city is not what we wanted,” Mr Michael told The Australian Financial Review.
“So I said to Five Guys, I’m changing strategy. I’m going out [of the city first] and then coming in … and they agreed and said I should go ahead,”
Private equity-backed Seagrass, which operates more than 40 restaurants in Australia including its popular Meat & Wine Co and Ribs & Burgers venues, has since signed a 10-year lease with rugby league’s Panthers Group for a restaurant site next to its expansive entertainment and dining precinct on Penrith’s Mulgoa Road, one of western Sydney’s busiest roads, after winning a tender process.
Mr Michael said Seagrass Hospitality would pay about a $200,000 a year in rent for the 500-square-metre free-standing pad site that was previously a Spur steakhouse (it closed during the pandemic and never reopened) on a road where more than 40,000 cars drive past every day.
‘It’s a cracker of site. Right next to KFC, McDonald’s and Krispy Kreme.” said Mr Michael, who late last year kick-started the hospitality sector’s recovery with new restaurants opening in Sydney and Adelaide.
With rents now falling in the city – Mr Michael reckons asking rents are down 45-50 per cent in some parts of the CBD – Seagrass is looking closely at a site on George Street as a potential second Five Guys venue.
“[Sydney city] landlords are starting to be more reasonable, especially the ones that need the cash flow. Those rents are starting to come back,” Mr Michael said.
“The ones with cash are just sitting on their hands and holding their rentals.”
Mr Michael, who openly admits JobKeeper helped keep his business afloat during the pandemic, is also keen to expand Five Guys into Melbourne, the Gold Coast and New Zealand, as part of its master franchise agreement to open 10 restaurants in the region.
The burger chain, founded by Janie and Jerry Murrell and their four sons, Jim, Matt, Chad and Ben the “five guys” its named after – in Arlington, Virginia in 1986, is famous for its freshly made burgers and milkshakes topped with crumbled applewood-smoked bacon. The chain has grown to more than 1500 restaurants around the world.
“I don’t think we need another burger chain in Australia, but I think this one will fit in well,” said Mr Michael.
“Nothing is frozen. They make their burger patties fresh and cut their chips fresh everyday. They also bake their hamburger buns every day.
“No fast food chain at that size is delivering that calibre of fresh product,” Mr Michael said. “You can taste the difference straight away – that’s what I like about them.”
