Smashburger’s new CEO embraces opportunities for growth and menu improvement

After 25 years at Starbucks, Denise Nelsen was looking for an opportunity that met three requirements: the chance to grow a brand, be creative and work with a powerful team. The role of Smashburger CEO has achieved all of these objectives.

It wasn’t a big surprise for the quick service veteran. She has lived in Colorado, home of Smashburger, on and off for almost thirteen years, so was familiar with the menu and food quality. She also appreciated the reputation of Jollibee Foods Corporation, the parent company of fast casual, which “brings truly inspiring growth ambitions for the next five years.”

“It all came together and it really felt like what I was looking for,” Nelsen says. “I believe fate intervenes and in some ways it felt that way.”

Smashburger ended 2023 with 210 U.S. restaurants, consisting of 133 company-owned or operated outlets and 78 franchise units. The brand’s store count has remained fairly stable in recent years, with a net loss of three domestic restaurants since the start of 2021. The brand also owns a handful of locations in about a half-dozen other countries.

Nelsen spent the first few months listening to feedback from various stakeholders, including team members, franchisees and customers. The new CEO wants to strengthen the identity of the chain, especially through menu optimization and a renewed emphasis on the core offering, such as the classic smash-style burgers and milkshakes. This has received the approval of Jollibee, which has identified Smashburger as one of its top four global growth brands. In terms of unit count, the fast casual plans to pursue growth opportunities both domestically and internationally. In addition, Nelsen emphasizes the importance of increasing support for franchisees to foster a collaborative and mutually beneficial relationship.

“I don’t think it can be said enough: our dedication to the taste and quality of food, I’ve never seen anything like it,” Nelsen says. “And the more I’m here, the more I really see that dedication coming through. That’s an incredible power we have. There is so much dedication from our team and from the team members I have met at our restaurants, both owned and franchised. There is such a commitment to the guest experience and a deep care for the communities they are a part of. To seize opportunities again, we have a real chance to position the brand strongly and become owners of the hit. Smashburger really introduced this concept through our founder Tom Ryan. We have an opportunity to really take ownership of the hit and its quality and then really focus on our growth for the future.”

Richard Shin, CFO of Jollibee Foods Corporation, told analysts in March that Smashburger’s losses have “definitely reduced.” He noted that more work remains, but not much; In fact, he said the fast casual will soon report net operating profits. Leadership has achieved this momentum by making the chain less promotional, including fewer BOGO deals and discounts for online orders. While this resulted in better profits, it also caused a 1.3 percent decline in same-store sales in the fourth quarter year over year. But Smashburger is willing to absorb that decline so the company doesn’t “build a business based on promos,” Shin said.

More than 80 percent of Jollibee Foods Corporation’s business growth in North America will be through franchising. Smashburger does not plan to open any company-owned stores until 2024. Although fast casual restaurants will be lost by 2023, Shin says the brand is making sure “we know 100 percent what we’re doing.”

After spending time with Nelsen in Denver, he said, “She’s a great executive, and I think we’re in good hands there.”

She is one of the best examples of climbing the fast service ladder. She started as a barista at Starbucks and worked her way up to senior vice president of U.S. operations over the next twenty years. When she started, the coffee giant had a presence in about 500 locations around the world, and when she left the brand had more than 35,000 stores. She recalls experiences where the brand opened markets and customers did not recognize the company. During her tenure, Nelsen navigated business declines and led initiatives to revive growth and promote collaboration across teams and markets. Working with company-owned and licensed stores, she knew how to co-expand a business with other operators and best understand their priorities. Her background includes leadership in global operations services, where she prioritized operational efficiency and strategic planning to achieve objectives. Her most recent role as head of the US business gave her a holistic perspective on ownership models and different markets.

Now at Smashburger, Nelsen will use her expertise to brainstorm with the team and define a robust growth strategy.

“(Franchisees are) incredibly proud of their company and they’re very excited about Smashburger and the quality and the things that brought them to the brand in the first place,” Nelsen says. “What they give me feedback on, I think we collectively agree as a team that there are more opportunities for growth. There are more opportunities to take a stronger position within the brand and honestly drive the business by creating brand awareness and consistency. And one of the things that I’m excited about and honestly pleasantly surprised by is that they’ve all asked for more support and more follow-up, and they feel comfortable enough to excel and expand the brand really represent. When I think about the things we’ve talked about, I feel like we’re very aligned when it comes to our desire to grow. We all want to represent the brand. We know there are opportunities to do more. And so I think together we will certainly continue to chart a course to do that.”