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RECENT GRAD FINDS A NEW NICHE IN FRESH FAST FOOD
Chicago alumni don't usually flip burgers for a living, and Greg
Schulson, ’98, is no exception. He wraps gourmet burritos instead.
Although not literally tossing the tortilla, Schulson, 29, is
on the fast-food front line carving out a new niche in the restaurant
industry. He is founder and president of Burrito Beach, L.L.C.,
a fresh-food, quick-service restaurant chain that he opened two
weeks before starting classes in the campus program in 1995.
“I thought, there are not going to be many students at the University
of Chicago who want to be in fast-food service,” he says, smiling
as he hunts for a vacant table in Citicorp Center’s bustling food
court in downtown Chicago, where the newest of his five restaurants
is located. The line for Burrito Beach is long and constant.
The restaurant offers what Schulson thinks today’s customers want:
quick service with higher quality, fresher ingredients than typical
fast-food offerings. A best-selling item on the menu, for example,
is the Thai Chicken Wrap, a warm whole wheat tortilla filled with
marinated chicken, jasmine rice, romaine lettuce, bean sprouts,
cucumbers, carrots, mozzarella cheese, and Thai peanut sauce.
In addition to four food court locations, Schulson also has one
stand-alone restaurant on LaSalle Street in the heart of Chicago’s
business district. Referred to in the industry as “fast casual,”
the restaurant caters to the consumer who has little time but
wants “a high-quality product at the right price in a nice environment,”
Schulson says. “People often don’t have time for a full-service
restaurant, but they still want a pleasant escape from their work
environment.”
As with many GSB students, experience preceded the pursuit of
an M.B.A. Schulson’s father owns Lunan Corporation, which today
operates nearly sixty Arby’s Roast Beef restaurants in Illinois,
Nevada, and California, and Schulson literally grew up with the
fast-food business. He began learning the ropes in high school,
then pursued a degree at Cornell University’s School of Hotel
Administration. He gained further experience with Chicago’s Levy
Restaurants as a manager of the fine-dining establishment Bistro
110 before deciding to attend b-school “to see the bigger picture,”
he says. “I wanted to challenge myself in new ways, and I knew
Chicago would do that.
“I applied to school thinking, this is the plan: Go to school,
do an internship like everybody else, and work for someone else
for a few years before returning to the family business.” As it
turned out, opportunity scrambled his neatly laid plan.
A downtown food court owned by Lunan, of which he is now vice
president for corporate development, included a languishing bakery.
Putting his restaurant management skills to work, Schulson analyzed
the situation, conducted market and trade research, reflected
on his own love of burritos, and determined that a restaurant
featuring gourmet burritos, fresh Mexican fare, and other wraps
would perform better than the bakery in that location. He opened
his first Burrito Beach restaurant as an affiliate of Lunan the
same week he began orientation at Chicago. Balancing class work
and the company was sometimes difficult, but Schulson says he
can name at least one advantage: “I always had a built-in case
study.”
He worked full time and maintained a full course load, opening
his second restaurant just eight months later. After graduation
in June 1998, he was back on the job the next day, supervising
construction at his fifth Burrito Beach location.
Now, after successfully launching that restaurant as a cobranded
enterprise with Chicago’s Ann Sather restaurants, he’s hoping
to grow the business at an even faster rate.
“We are looking for a good strategic partner to help us speed
up our growth,” Schulson says. “We have a very viable stand-alone
as well as cobranded concept and we’re excited about it’s potential.”
Schulson saw cobranding as a natural opportunity for his restaurants.
Both Burrito Beach and Ann Sather–known for its cinnamon rolls–offer
high-quality products that don’t compete with one another. Yet
they target the same audience, opening the door to a broader consumer
base by introducing Ann Sather customers to Burrito Beach and
vice versa.
Located in the Citicorp Center food court, the two restaurants
maintain separate identities on the front end but share preparation
space, employees, and even management. Ann Sather opens early,
to accommodate the breakfast crowd, and Burrito Beach opens later
for lunch and dinner.
Cobranding presents significant advantages for growing businesses
in addition to extending their customer reach. By sharing fixed
costs and some operational expenses, for example, high profile
locations become more affordable.
“The key to success with cobranding is to be able to communicate
two distinct identities–people don’t want the burrito guy making
their cinnamon rolls and vice versa–and at the same time be able
to recognize efficiencies behind the scenes,” Schulson says. “We
believe there are many more great cobranding opportunities beyond
what we’re currently doing.”
The formula appears to be working. So far, the cobranded restaurant
is Burrito Beach’s busiest, reporting the highest sales.
Now Schulson is ready for the next step: finding the right strategic
partner to spur growth. “Lunan was our first-stage partner; now
we need a second-stage partner,” he says. In the meantime, Schulson
will continue to visit his restaurants, all located in the Chicago
area, on a daily basis, monitoring the business and building relationships
with his fifty employees.
“This is a start-up business. If I can’t be involved in the details
now, when can I? Someday maybe I’ll have fifty restaurants, or
five hundred. Will I be in the restaurants then? I’m sure I will
be. I’ll always need to talk to the customer, if nothing else.”
“How’s your burrito?” he asks the customer seated next to him,
who responds enthusiastically.
“In the restaurant business,” he explains, “the customer is what
it’s all about.”–C.N.
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