Burgers are economically bulletproof: Bobby Flay
In the crowded fast-casual market dominated by the likes of Chipotle (CMG) and Panera (PNRA), a celebrity-backed burger joint may also be a secret sauce to success.
"In any economy," restaurateur Bobby Flay told CNBC on Friday, "burgers are one of the great American dishes. Period."
Known for his high-end restaurants like Bar Americain in New York and Mesa Grill in Las Vegas, Flay has placed a big bet on Bobby's Burger Palace, and it appears to be paying off.
"[Bobby's Burger Palace] is not full service, but we bring the food to you, and we take it away from you," he said in a " Squawk Box " interview.
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Privately held Bobby's Burger Palace now has 18 U.S. locations, primarily in East Coast malls and plazas. Flay describes the chain as "convenient casual," aiming for speed but also comfort, while providing a high level of hospitality.
In an effort to enforce the fast-casual concept, BBP has made tipping optional, which Flay believes enhances its attraction. His signature items include the "Crunchburger" with double American cheese and potato chips, and the "L.A. Burger" with avocado relish, watercress, cheddar cheese and tomato. A "topless option" is offered for the carb-conscious.
"We're cash flow positive and have been since the day we opened. And it continues to rise. We feel like we're just beginning to grow this business," Flay said. "We're trying to give people what we want, which is great food. People in this country want better food every day. And as a chef, I feel like I can help deliver that."
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Food industry consultant Technomic said fast-casual industry sales grew 11 percent last year, becoming a $34.5 billion segment.
But not all casual dining chains are created equal. Shares of Noodles & Company (NDLS), Red Robin Gourmet Burgers (RRGB) and Ruby Tuesday (RT) are down double-digits in the past month.
Restaurateur Tim Love, co-star of CNBC primetime show " Restaurant Startup ," speculated about what's behind the troubles. "When you see a restaurant company go public, a lot of times you see that passion get dispersed throughout a bunch of people. And you have false money that allows you to expand quicker than maybe you should. And you start losing quality, and you choose that over sales."
Both Love and Flay suggested on CNBC's "Squawk Box" that struggling companies should look toward independent restaurants to see what's in their formula for success.
"My message to the restaurant analysts out there is, 'Don't get caught up in the hype.' This is food. Take a look at what's behind the curtain and see who's actually making the decisions and cooking the food," Flay said.
-By CNBC's Melody Hahm
Programming note: Watch "Restaurant Startup" Tuesdays at 10 p.m. ET on CNBC.
