Built Custom Burgers Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$408,500 - $1,297,000
Franchise Fee
$20,000
Min Cash Required
$50,000
Total US Locations
3
Business Summary
Built Custom Burgers operates a fast-casual restaurant business specializing in build-your-own burgers, alongside signature burgers, side dishes, sandwiches, salads, desserts, ice-cream shakes, and a selection of non-alcoholic and alcoholic beverages including beer and wine. Customers personalize their orders by choosing proteins, cheeses, toppings, and sauces from a service line. Built Custom Burgers emphasizes product quality, nutritional value, customer service, and individual choice. The restaurants follow a fast-casual format, but can adapt to modified service or alternative formats in various venues like malls, airports, or schools, offering either a full or limited menu depending on the location type.
Corporate History
MTY Franchising USA, Inc. began offering Built Custom Burgers franchises in December 2017 after acquiring the brand's prior franchisor, Built Franchise Systems, LLC, which had been offering Built Custom Burgers franchises since 2014. The current MTY Franchising USA, Inc. entity, a Tennessee corporation, was formed in 2019 through a merger with an earlier Delaware corporation of the same name, originally incorporated in 2001. Built Custom Burgers is part of the larger MTY Food Group, Inc., a public corporation based in Canada, which operates and franchises over 55 different restaurant concepts.
Financial Overview
Investment Range
$408,500 - $1,297,000
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$30,000
Minimum Cash Required
$50,000
Royalty %
5%
Marketing %
1%
Equipment Costs (Low)
$127,000
Equipment Costs (High)
$319,000
Working Capital
$75,000
Audited Financials
Yes
Offers Financing
Yes
Financial Health Notes
The FDD's Maryland state-specific addendum highlights a special risk: the franchisor's financial condition, as reflected in its financial statements, calls into question Built Custom Burgers' financial ability to provide services and support to its franchisees. Due to this, the Maryland Securities Commissioner has mandated a financial assurance, requiring all initial fees and payments owed by Maryland franchisees to be deferred until the franchisor completes its pre-opening obligations under the franchise agreement.
Financing Details
Built Custom Burgers does not offer direct or indirect financing for its franchises, nor does it guarantee obligations under notes or other agreements, with one specific exception. If a franchisee purchases an 'as-is' corporate-owned restaurant from one of Built Custom Burgers' affiliates, financing for up to 100% of the purchase price may be offered at the franchisor's sole discretion. The annual interest rate for such financing can range between 0% and 12%, depending on the franchisee's creditworthiness, the financed amount, and the upfront payment. Repayment periods typically range from 12 to 60 months in equal monthly installments. This financing requires a first lien position on all equipment as security and also requires a personal guarantee from the individual franchisee (and their spouse) or all principals (and their spouses) of a business entity. Upon default, the franchisee faces accelerated payment obligations (with interest increasing to 18% annually), collection costs, potential termination of the franchise, and cross-defaults on other restaurants. Franchisees waive certain legal rights, including contesting or appealing the franchisor's right to repossess the restaurant without compensation upon default. Built Custom Burgers does not arrange financing from other sources or receive payments for referring financing.
Performance Metrics
Total US Locations
3
Franchised Units
3
Corporate Units
0
Avg Square Footage
1,500
Franchising Since
2014
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
21
Litigation Summary
Built Custom Burgers and its various affiliates within the MTY Food Group have been involved in 21 legal matters. Many of these cases predate MTY USA's direct franchising of Built Custom Burgers, or involve other brands under the MTY umbrella. Past cases include disputes over franchise investment laws and misrepresentation claims, such as a 2015 Washington FIPA violation claim against The Extreme Pita Franchising USA, Inc. which settled for $20,000, and a 2014 fraud and unfair practices arbitration against SweetFrog Enterprises, L.L.C. that settled for $300,000. Other examples include a 2013 implied indemnity and breach of contract case involving Fresh Enterprises (a Baja Fresh predecessor) settled for $585,000, and a 2019 arbitration against Wetzel's Pretzels, L.L.C. for misrepresentation that settled for $125,000. Additionally, two consolidated lawsuits from 2014 by Papa Murphy's International, L.L.C. franchisees alleged misrepresentations, which were settled through various compensation methods including monetary payments and store purchases. Public agency actions have also occurred against predecessors for franchise law violations, such as unregistered franchise offers. Most recently, during the fiscal year ending November 30, 2024, Kahala Franchising, L.L.C., an affiliate, filed a lawsuit for breach of contract in Illinois and a suit for forcible entry and detainer in Iowa, which are currently ongoing.
Bankruptcy History
Built Custom Burgers' co-Chief Operating Officer, Adam Lehr, filed for personal Chapter 13 bankruptcy in connection with his ownership of Lehr Restaurant Group and Lehr Real Estate on January 30, 2018. This bankruptcy was discharged on June 29, 2021.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their Built Custom Burgers franchise license for an additional five-year term, franchisees must provide at least 120 days' notice before the current term expires. They must be in good standing, meaning they are not in default of their franchise agreement or any other agreements with Built Custom Burgers or its affiliates, and are current on all financial obligations. Franchisees cannot have received more than three default notices during the entire term or more than two in the five years before renewal. They must either have the right to keep their current location or secure an approved new one, sign a general release, and execute Built Custom Burgers' then-current franchise agreement (which may have different terms, including higher fees). Additionally, franchisees must agree to update or refurbish their equipment, fixtures, and signage to meet current brand standards and upgrade their Point-of-Sale (POS) system within a specified timeframe.
Training & Support Program
Franchisor Assistance
Built Custom Burgers provides franchisees with pre-opening assistance, including optional site selection support and lease review services. The franchisor helps with construction by providing approved design drawings and specifications for fixtures, furnishings, and equipment. Franchisees also receive an electronic or print version of the Confidential Operations Manual. Initial training includes a 40-hour New Owner Training program and 120 hours of In-Store Training for up to three individuals, conducted online, at the corporate training center in Scottsdale, Arizona, or at designated locations. Built Custom Burgers also provides on-site grand opening support for up to twelve days for a first restaurant, ten days for a second, and seven days for a third, at its expense. Ongoing assistance includes maintaining an advisory relationship for marketing, merchandising, and general business operations, providing updated operating standards, conducting periodic inspections, and making software available for administrative and inventory control. Built Custom Burgers also reviews substitute locations for potential relocations and may offer a one-time renewal option.
Initial Training Hours
160
Training Location
Online, Scottsdale, Arizona, or other designated locations, including the franchisee's restaurant for in-store training
Ongoing Support
After opening, Built Custom Burgers franchisees receive a continuing advisory relationship that includes consultation on marketing, merchandising, and general business operations. The franchisor provides information on updated operating standards and maintains system-wide quality through periodic inspections and service checks. Built Custom Burgers may make franchisees aware of software for administrative, bookkeeping, accounting, and inventory control. The franchisor also reviews substitute locations if a franchisee wishes to relocate. Additionally, Built Custom Burgers offers the option for a one-time renewal of the Franchise Agreement, subject to meeting specific requirements. Area Representatives, if assigned to a franchisee's area, may also provide services such as site assistance, lease advice, POS system training, marketing advice, quality service cleanliness and experience (QSCE) evaluations, and coordination with other franchisees.
Franchise Requirements
Ideal Candidate Profile
Built Custom Burgers seeks franchisees who intend to actively participate in the direct operation and daily affairs of their restaurant, rather than acting as passive investors. Ideal candidates are expected to personally manage the franchise with on-premises supervision or employ a qualified manager who has successfully completed the training program. The franchisor strongly recommends that owners devote a substantial amount of time to their restaurant, as past experience indicates that owner-operated locations generally perform better. Additionally, successful candidates are financially acceptable, possess good moral character and reputation, have strong work experience and aptitude, demonstrate the ability to devote their best efforts to the business, and can communicate effectively in English with employees, customers, and suppliers.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
hands-on
Territory Type
non-exclusive
Territory Size Requirements
Built Custom Burgers franchisees do not receive an exclusive territory. The franchise is granted for a specific location only. Built Custom Burgers may face competition from other franchisees, company-owned restaurants, or other distribution channels controlled by Built Custom Burgers, including locations across the street or in the same venue. Built Custom Burgers retains the right to establish or license other Built Custom Burgers restaurants or any other business using its proprietary marks and system in any location, and to sell products through other distribution channels, such as grocery stores or the internet, which may compete with the franchisee's location. The Franchise Agreement does not specify measurable criteria like radius or population for a territory.
Staffing Notes
Built Custom Burgers franchisees are solely responsible for all aspects of hiring, firing, training, supervising, and compensating their employees. They must ensure that all employees who directly interact with the public are proficient in reading and speaking English, along with any other language necessary for the local customer base. Franchisees are required to employ at least one full-time, on-premises Manager who meets Built Custom Burgers' criteria for a qualified restaurant operator. This Manager must dedicate their entire work time to managing, operating, and developing the franchise business, and must adhere to confidentiality, trademark usage, non-competition covenants, and all operational standards outlined in the Franchise Agreement and Confidential Manual. All personnel must maintain high standards of sanitation, cleanliness, and demeanor, and wear uniforms approved by Built Custom Burgers.