CEO Adam Fleischman on Umami Burger's Plans for a Smart Global Expansion

Just about two months ago, Los Angeles-based hamburger startup Umami Burger announced that it is about to go bigger than ever on expansion. With a new $20 million in funding, Umami Burger plans to expand out across the United States, with its eye on Chicago, Philadelphia, and Washington, DC, in addition to those already being planned in Las Vegas, Miami and New York. The chain now a corporate team in place to handle this faster pace of expansion, a big change since Umami Burger's early days when it was pretty much just CEO Adam Fleischman. Here now, he talks about his philosophy when it comes to "global expansion in a smart way," what he looks for in new locations, and why the company doesn't franchise.

(cold open)

Are you in New York?

I'm in DC, actually.
We're actually looking at locations there for Umami.

Yeah, we're pretty excited about that over there.
Oh cool. Yeah that's my hometown. I grew up in DC. Thirty years there.

I saw you were planning to bring four different places here?
We would do a hub, which is what we typically do where they're spread out — there's one in Baltimore, one in DC, one in Virginia, one in Bethesda. Just do more of an impact. That's the hopes. But we'll see how it goes.

Makes sense. So I read that you had expansion in mind from the time you opened your first location.
Yeah, we created Umami to be sort of a global brand from the outset. It wasn't supposed to be like an LA brand or an old-school brand. It was supposed to be a global brand with lots of influence from different countries. That was how I conceived it. I didn't know it would be so popular, but once it was, it made sense to start thinking about global expansion in a smart way.

What does a smart way mean to you?
Well, non-franchise. A lot of these franchise players, I think there'll be a big shakeout because they just sell franchises. So they do 200, 300, 400 stores — like Smashburger and those guys — but they're not company-owned, they don't tailor them to the neighborhoods, they don't build community. So we're really looking to do all those things. We'll do less stores. Still be global, but just do much less stores and just run them in a way that we control the quality. We're self-financed, obviously. We're not taking outside franchise money.

And so prior to now you've certainly expanded, but it looks like you're about to go on a much quicker pace.
We added a whole corporate infrastructure team so we're able to do it. We have an opening team that just goes around all the restaurants. The same people opening the ones in LA will be the same ones opening in DC. They just travel around, they open stores for us. They've been with us for a long time, so they really know what they're doing. It's not like starting from scratch each time. We've got a really dedicated team.

How many people is that?
Well, our corporate staff now is 40 to 50 people. So they're all working on the expansion, whereas two years ago it was just me.

Wow. And how do you decide where to go? Do you get approached for a lot of locations?
We get approached, but it's really just based on where I want to be, the cities I like to be in. Obviously like Florida, DC, or some of my favorite cities, New York, San Francisco. It's really based on that. If it's not a great food city, we wouldn't be really interested in going into it.

Are all of these hubs?
DC and New York and Miami are intended to be hubs with five hub locations at a minimum.

What do you look for in a particular location? I know you try to make each one unique to its own neighborhood.
We make it unique, so we want it to be reflective of the area. We don't want just like a generic strip mall space. We want something that has some character to it and is older, usually, an older location that has been there a long time. So that has some character, that's in a good area, that gets a good daytime traffic and as well as nighttime residency. And we just look for the right infrastructure for the restaurant and having the right kitchen setups and so forth.

And how do you set them apart from each other?
We work with different designers and have a different concept for each one. Like the one in Palo Alto that just opened, it looks like you're in a library with lots of rows of books and encyclopedias and stuff.

Oh yeah, I saw the Palo Alto one. It looks neat.
Yeah cause there's so much information up there. It's Silicon Valley, so we figured what's more informative than books? So that concept sort of ties into the area, it's about information movement. For DC, I don't know what we'll do, but it should be something fun.

And also, as you make each location unique, how do you ensure consistency? Are you eating a lot of burgers?
No, we just have the same corporate chef teams opening each one so the consistency is the same. We use the same ingredients. But, you know, I'll try the burgers too at the new locations just to make sure they're good.

How much are you traveling?
Pretty much every month. Like one trip a month.

For your corporate team that's traveling, is it a smaller group that does all your opening travel?
Yes, it's an opening team, plus the executive staff, plus the development guys, the guys that oversee the construction and so forth. They travel a lot. They actually travel the most. We work with different brokers in the area. We have a lot of friends in DC. We're good friends with José Andrés, obviously, because of the SBE connections. So we lean on guys like that for intel.

And when you're opening a new location, what is the training process like? Do you leave people who have been with the company for a long time in each new location?
We do. We leave them there for several weeks and we also train people. Sometimes we move people to locations permanently and they just stay there. It really depends on the area. But the DC one, I'll be personally involved to make sure that it's as good as it can be.

And how do you know when to say no to a new location?
We say no all day long. We look at 100 locations for every one we choose. It just has to feel right. It has to be the right neighborhood and of the right internal infrastructure to work for what an Umami is. It can't be something that has like a four square foot kitchen or it can't be something where the kitchen is like a monster, you know? We've turned down places that were too big, too small, didn't have the right flow. It's really just how it feels, and does it feel like an Umami? We like to buy a lot of Asian restaurants that are already Asian and then convert them. That's one thing we've done a lot.

Why is that?
Because a lot of times they already look like an Umami. We'll buy like sushi places or whatever. But it's a variety.

And you're going into airports now too, huh?
We're going into LAX. I don't know if we're going to do more airports, but we probably will.

It seems like airport and stadium dining are starting to get a little better.
Yeah. I think they're realizing that they just can't have generic brands or people aren't going to eat there. So they want to put in real brands and good quality food and not just like fried stuff. Just a good selection. They're just getting smarter. LAX has got a Lemonade, which is a great salad-type place. They're really putting a lot of good stuff in there that's reflective of the city and not just generic-type national chains.

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