Charton Management Inc.

Charton Management Qdoba

Charton Management is building a balanced portfolio of

Burger King and Qdoba restaurants throughout West Virginia and Ohio.

By Tim O'Connor, Senior Editor at Knighthouse Media

When building a new restaurant, Charton Management not only wants to own its own land but it also tries to acquire a nearby lot. That extra purchase is a bet on itself. The opening of a new restaurant tends to raise surrounding property values and Charton can then sell the additional lot to help pay off the lot it operates on, giving it more flexibility and strength going forward.

“Part of our M.O. has been to own the land that we build on if at all possible,” Charton owner Matt Herridge says. “When you control your own property, it allows you a lot of leverage with your franchisor as far as collaboration and goal setting. It also, from a banking perspective, provides a lot of strength if you do need financing or are looking for opportunities for new growth.”

Shifting Market

Charton Management infoIt’s a strategy that has helped Charton keep pace with the changing restaurant industry for nearly 40 years. Gene and Joyce Wharton, Herridge’s father- and mother-in-law, started Charton in 1979 when they opened their first Burger King franchise in Vienna, W.V. The couple went on to expand their business throughout West Virginia and southeastern Ohio, and at its peak Charton owned 24 Burger King Restaurants.

The next generation of leadership came to Charton in 2000 when the couple’s son, Grant Wharton, graduated college and entered the family business. Herridge joined the company five years later, just as it was beginning to see the consumer trend away from traditional fast-food “big three” toward fast-casual restaurants that offer higher-quality meals.

“We decided that it was going to be important for us for multiple reasons to hedge our company direction in that we wanted to look into the fast-casual world of QSR [quick-service restaurants] as another option for the future,” Herridge says. “We really felt that having a foot in the fast-food world and the fast-casual world would be wise given the share gains we’ve been seeing in fast casual and the continued need for convenience and familiarity of fast food.”

Charton realized it had to balance its portfolio so it sold 15 Burger King restaurants. Using the proceeds from the sale to pay off all debt and create funds for growth, Charton entered the fast-casual market in 2013 with its first Qdoba location in Marietta, Ohio. It will open its second location in Athens, Ohio, this spring. Herridge says the company plans to open another three to five Qdobas in the next three years.

Even as it makes a push into the fast-casual market, Charton has found that its remaining Burger King locations are performing better. When choosing which restaurants to sell, Charton chose to keep the locations that were within a 45-minute radius of its headquarters in Vienna, allowing it to provide better oversight and hands-on management.

“We found that having limited our presence within our specific DMA [designated market area] we are actually able to run much higher-volume restaurants less distraction from restaurant problems that were more typical on the outskirts of our territory,” Herridge says. “We have been much more successful and grown our average unit volume to nearly $2 million.”

Charton Management Burger KingBecause of that success, Charton continues to invest in Burger King alongside its new Qdoba locations. The company recently began remodeling its restaurants to the new Burger King Garden Grill concept, which features community tables, natural wood, sofa chairs, earth tone colors, open spaces and an overall more upscale design. Five locations have already been remodeled and the remaining three will be upgraded in the next few years.

Support Software

Updating the look of its restaurants makes them more attractive to guests, but it’s equally important to invest in the behind the scenes systems that make them run efficiently. Where many franchisees rely on outside service providers, Charton created its own software development company, Valley Tech LLC, to create business intelligence solutions for its restaurants. Charton’s IT director and former Burger King general manager, Joshua Loy, serves as the CIO for Valley Tech and the director of operations for both its Burger King and Qdoba restaurants, Ord Delaney, also serves as Valley Tech’s CEO.

The software allows Charton’s restaurants to better manage food costs, food preparation, inventory and labor using real-time projections and reporting. The company uses some of this Valley Tech technology in its Burger King restaurants as well as in Qdoba. “We are very excited about developing our own new solution for our Qdoba restaurants that is basically a back-of-the-house kitchen intelligence solution,” Herridge explains.

The software is used only by Charton now but the company is hopeful that it can become available to other franchisees in the future.

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