Culver's Is Punching Way Above Its Weight In the Fast Food World, Thanks to This Unique Growth Strategy Despite being much smaller than its competitors, Culver's landed at #6 on this year's Franchise 500 by making deliberate decisions and a series of innovations.
By Margot Boyer-Dry •
This story appears in the January 2024 issue of Entrepreneur. Subscribe »
To view our entire 2024 Franchise 500 list, including category rankings, click HERE
Started Franchising: 1988
Total Units: 918
Cost to Open: $2.5M-$7.2M
Some people might see Culver's in our Top 10 for the sixth year in a row and wonder, How?
It's a reasonable question. Unlike the other brands in our Top 10, which have national or international footprints, Culver's is open in only 26 states. But here's what you might overlook: The Franchise 500 is not just about size; it's also about strength and growth.
Culver's shows steady, consistent growth of about 50 units per year, which is impressive for its size, especially when each unit can cost $2.5 million and up to open. Culver's U.S. franchise units increased by 5.3% this year, which is a lot compared to similar brands (our No. 1 company, Taco Bell, saw 2.9% U.S. franchise growth). And in the last four years, Culver's has had only two closures, both due to owner-operator retirement — a true feat which speaks to how carefully it chooses and supports franchisees, and how thoughtful it is about expansion. As a result, Culver's rose to No. 7 from its No. 8 spot last year.
Related: Culver's Hasn't Closed a Store in 4 Years — And It's All Thanks to One Smart Strategy
When you look at Culver's operations, you see even more promise. While many other restaurant chains are reducing their store sizes, Culver's has kept its spacious dining rooms — most freestanding locations measure about 4,000 square feet — and focused on outstanding hospitality inside them, which Culver Franchising System president and CEO Rick Silva says is key.
To keep up with demand, the chain improved how customers order and receive their food. Fresh patty presses and fry dispensers help streamline order fulfillment, and new systems allow guests to order straight from their tables without visiting the front counter.
Outside of the dining room, the brand is adding a second drive-thru at select locations and improving technology. They've put tablets in order lanes and added a way for customers to pay right when they order.
That efficiency makes a sizeable impact on a business where, as of this year, drive-thru accounted for about 70% of orders.
Related: Making Your Community The Secret Weapon in Rapid Franchise Expansion
Each of those orders is placed through Culver's new point-of-sale system, which provides data that franchisees can use to scale their production up and down in real time. The system is also the basis for a new app and loyalty program.
Culver's is also fostering loyalty within its own ranks. It rolled out a new manager certification and training program in 2023 to support career growth, and has invested in a program for existing franchisees to mentor their proven managers — with the goal of helping them become franchisees themselves. "It's a powerful program that allows restaurant managers to fulfill their dreams," Silva says.
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