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Now reading An Audience with the Burger King

An Audience with the Burger King

On fine dining, Shake Shack, and New York real estate.

Back in April, we sat down with Danny Meyer and learned about his trajectory as a businessman. Here are a couple tendrils of knowledge pruned from that featurette—about fine dining, New York City real estate, and the beginnings of Shake Shack—that we liked too much not to share. —Brette Warshaw

ON FINE DINING

I am completely aware that the magnitude of the good fortune that Shake Shack has had in its growth could lead some to the conclusion that I do not care about fine dining. But what I’m most fascinated by is not the price point, or what the food is—what I love to do is try to take one business philosophy and apply it to everything, whether it’s a barbecue joint or three-star dining.

When we had the hot dog cart in Madison Square Park—the original incarnation of what became Shake Shack—we lost about $4,500 the first year, and about $5,000 the second year. (There’s a reason that hot dog carts usually have one person working them, not four.) I wanted to see if our kind of hospitality could work with something as mundane as a hot dog cart. One of the reasons for the Chicago-style hot dog was that I wanted to see if eight toppings could be remembered. Oh, that’s the person who likes everything except sport peppers. That’s the person who likes everything except mustard. On and on and on. And it worked.

There’s no question that shows the cost structure of fine dining to be more challenging than what I call “fine casual.” But there’s every single truth to the notion that you can take away a number of the costs of fine dining and find a way to serve the same-quality food for far lower prices to far more people. At Shake Shack, there’s no host. There are no reservations. There are no waiters or waitresses or bartenders. There’s no florist. There’s no chef or sous chef or pastry chef. There’s no linen. There’s no dishwasher or china. So that allows us to take ingredients—all natural beef, cage-free eggs in our frozen custard, Mast Brothers chocolate, all the stuff we would use anywhere else—and offer them to people who could not otherwise afford to eat in some of our restaurants, and also to appeal to people who do eat in those restaurants.

I define hospitality as doing something that makes the guest feels like we’re on their side, and pricing becomes a subset of it. If you feel like we’re ripping you off, you feel like we’re not on your side. Our goal is to have a price point that is just within reach for someone for whom this is a huge treat—someone who, when they’ve wanted an inexpensive burger, all they’ve ever had as a choice was fast food. It can’t be outside of their grasp. And then we want it to be something that feels like a steal to someone who’s been getting the same quality for three or four times the price in a restaurant, but is willing to forgo the table service and the flowers and all that other stuff.

ON REAL ESTATE

Somebody many years ago said that their strategy for picking a new restaurant site was to follow where the prostitutes and art galleries went, because restaurants were always next. And once you have prostitutes, art galleries, and restaurants, then you get residences, which would then move out the prostitutes, and then you get stores and that kind of stuff.

If you’re lucky enough to buy the property, that’s the best-case scenario. We’ve only been able to do that once, at Gramercy Tavern. In the other cases, I think that our restaurants have made a pretty good bet, neighborhood-wise. I might argue that our restaurants in Battery Park City—North End Grill and Blue Smoke—may have been a year or a year and a half too soon. And I would also argue our catering company, which was born as Hudson Yards Catering, was probably ten years too early. But it didn’t matter for a catering company, because we could’ve been anywhere.

It is frustrating to have spent twenty years actively working in Union Square and contributing money to the community to help clean it up and supporting why people would want to come here in the first place—and then get priced out ourselves. But that’s the cycle. That’s how it goes. I can’t get up on a soapbox and say that’s wrong any more than I can say the waves in the ocean are wrong. Don’t be a surfer if you hate the waves. You have to kind of love the tough waves, because that gives you a chance to separate yourself from the guys who spend their energy getting angry with the waves, or the guys who can stay on their surfboard but their form isn’t really good, or the guys getting knocked off their surfboard. You try to catch a good wave and ride it as long as you possibly can.