Back Yard Burgers wants to put new restaurants in Chattanooga

COMPANY AT A GLANCE• Name: Back Yard Burgers• Founded: 1986 in Cleveland Mississippi by Lattimore Michael• Owners: Pharos Capital Group LLC, which pumped $14 million into the company when it emerged from bankruptcy two years ago• Headquarters: Nashville• No. of units: 65 units, including 23 company-owned stores in 14 states. At its peak, there were 180 units• Franchise costs: $35,000 initial fee, plus 4 percent royalty and 1.5 percent for national advertising• Typical unit: Costs $500,000 to $1 million to equip and open and includes 30 to 50 seats

photo Backyard Burger was located on Highway 58 before closing in 2011.

The recession that hit the restaurant industry five years ago quelled the fire for Back Yard Burgers, which filed for bankruptcy three years ago and shuttered nearly two-thirds of its restaurants, including two in Chattanooga.

But with new owners and management, the Nashville-based restaurant chain is eager to return to the Scenic City.

David McDougall, the CEO for Back Yard Burgers who joined the company in January 2013, said Chattanooga is a prime market for the company as it rebuilds business lost during the economic downturn when Back yard Burgers struggled and tried unsuccessfully to compete with lower-priced rivals. The chain is looking for franchise operators interested in one or more units in the Chattanooga market.

Back Yard Burgers operated at 4047 Hixson Pike in Hixson and at 4417 Highway 58 in Chattanooga before the units closed in the recession.

"We clearly went through some difficult times as a company during the Great Recession and unfortunately during that time we had a lot of store closings and lost a lot of franchisees," McDougall said. "Back Yard Burgers is known for its great one-third-pound, Black Angus burgers done on a charcoal grill. We tried, unsuccessfully, to try to compete with the dollar-menu rivals and that wasn't successful for us."

McDougall is committed to building the brand on the quality burgers and service that began with founder Lattimore Michael in Cleveland, Miss., where the chain began in 1986.

"We've gone back to focusing on what makes us special - great hamburgers, chicken sandwiches, salads and wraps," he said.

Back Yard Burgers also is adding some new menu items to step up its offerings, including a prime rib burger and a Southern burger.

"We have room for additional growth and Chattanooga is a target market as we grow in concentric circles from our base in Nashville and Memphis," McDougall said.

The average classic burger at Back Yard Burgers is $4.69 - priced between many fast-food rivals and premium burger restaurants.

"There's no question that the hamburger segment of the restaurant business is very competitive, but it is the largest segment and I certainly believe with the quality of our food and the high marks we get from our customers we can carve out our own niche in the hamburger category," McDougall said.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.

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