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Korea's Kraze Burger Aims to Cash in on US Craze


A patron enters the recently opened Kraze Burger franchise in Bethesda, Maryland.

A patron enters the recently opened Kraze Burger franchise in Bethesda, Maryland.

Americans are used to hearing about the latest McDonald’s opening in a remote part of the world, but it’s unusual to see a foreign food franchise setting up in the United States, especially one selling the most quintessential of American foods: hamburgers.

However, one plucky chain of Korean restaurants is doing just that, and recently opened its first U.S. branch in Bethesda, Maryland, just outside of Washington, DC.

Grace Lee, the vice president of business development for Kraze Burger, Inc., said her colleagues considered several Korean franchises to bring to the U.S. and were met with some skepticism when they decided on a burger chain.

“There were a lot of kimchi jokes,” she said.

Kraze, pronounced “crazy,” started in 1998 and was inspired by an American hamburger chain called Johnny Rockets. It has grown quickly, and there are now over 100 locations in Korea. The company has recently expanded to Singapore, Hong Kong and Macao, with plans to open five outlets in the DC area through 2012. Further expansion to Canada, Japan and Australia isn’t far off, according to the company.

One patron, Terra Hollander, a Korean-American now living in Bethesda, said she was familiar with Kraze before it opened near her and thought it could do well in the U.S.

“I think it’s very different from American hamburgers,” she said. “It’s less greasy, and I think the ingredients are more healthy.”

Another customer, Gail Kauffman of Bethesda, called Kraze “bright, cheery and delicious.”

There are some differences between the Korean and American versions of Kraze. The biggest, perhaps, is the “My Burger” offering which allows customers to build their own burger. Americans demand choices, whether it be in the cars they buy or the hamburgers they eat. And so far, "My Burger" accounts for 70 percent of sales at the Bethesda store. Korea has a pared down version of the concept, but it only makes up about five percent of sales there.

Another difference is that in Korea, diners often eat hamburgers with a knife and fork, so the burgers are served cut in half. In the U.S., they’re served whole. Kraze also offers several salad options, two kinds of vegetarian burgers, and you can choose grilled asparagus spears instead of French fries.

Matt Hilburn
Among the healthy offerings at Kraze Burger is the Vege & Bean burger. You can also order grilled asparagus instead of fries.

U.S. CEO Richard MacDowell said the idea to bring Kraze to the States came in a roundabout way.

“I’d been working with the Korean-American community in northern Virginia for the past several years, assisting them with Small Business Administration [SBA] loans,” he said, referring to the federally funded agency tasked with helping small businesses. “We found they could get better rates through franchises, so we cast about to franchises.”

That was the easy part. Adjusting to the American work culture has been a little eye opening.

“In Korea, there’s no overtime,” Lee said. “They work all the time, including 14-hour shifts. It’s an eight to nine hour shift here.”

Despite the shorter workdays, MacDowell says the demands are still high.

“There’s a really strong training program, and when they bring their chefs and training people here, there’s a culture shock about what’s expected,” he said. “Our primary trainer has been here night and day. He’s working 16 hours a day - an amazing level of commitment.”

In recent years, there has been a boom in the American premium, or gourmet, burger market. In the DC area alone, there are several companies already established, which will make it a tough market for a new arrival. But MacDowell thinks Kraze can compete.

“What we’ve tried to do is focus on the healthy alternatives and high quality,” he said. “It’s not just meat eaters that can have a good dining experience.”

On a recent lunchtime visit to the Bethesda store, business was brisk despite no marketing or advertising efforts. So far, Lee said about one third of the clientele has been Korean-Americans who wonder if it’s the same Kraze they know from the other side of the world.

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