Building the ButterBurger brand: How Culver’s took root in Sioux Falls

In the early days of his restaurant career, a slow lunch crowd meant it was time to hit the road.

Nick Magera would leave his Culver’s at 2509 S. Louise Ave. about 2 p.m. with to-go menus and coupons for free food, and start going door-to-door visiting other businesses.

“I’d go through the Meadows on the River area to the business park south of the mall explaining that we’re new, we just opened, here’s a menu,” he said. “I’d tell them we’re affordable, here’s why were different and don’t take my word for it, and I’d give them free certificates.”

He did that for about three months after opening in 1998. At the time, the commercial area around him was still maturing, and “we were kind of out there by ourselves on that curve,” he said. “I had to work at it.”

Almost two decades later, his franchises are thriving with five locations in Sioux Falls, one in Marshall, Minn., and one near Denver.

He’s a member of the franchise advisory council for Culver’s — a Wisconsin-based chain of almost 650 restaurants founded by Craig Culver and his family in 1984.

Culver will speak in Sioux Falls as the featured national family-business success story at the Prairie Family Business Association 2018 annual conference April 12 and 13.

“I connected with Culver’s as a brand and share that philosophy of a family-style business,” Magera said. “I’m a franchisee, but I’m a small-business owner. The Culver’s brand is all little individual family businesses. There are only seven company-owned restaurants. The others are all franchisee owner-operators who make a living doing this, and I think we connect on that level.”

Growing a franchise

A desire to spend more time with family prompted Magera to become a franchisee. He previously worked in health care sales, traveling nationwide, and decided he “didn’t want to be a weekend dad.”

“So I looked around Sioux Falls for a job, trying to find a job that would have comparable compensation, and that was difficult. At that point, I looked at going into business for myself,” he said. “I was a business developer already essentially, so we did the Culver’s franchise, and I’ve been doing it ever since.”

He was familiar with the brand from time living in Wisconsin, but he grew up in Tripp in southeast South Dakota. When Magera moved to Sioux Falls, he determined there was a niche for a restaurant with premium fresh custard and fresh hamburgers.

But he leapfrogged the Culver’s footprint by about four hours, “so there were a lot of people who didn’t know what a ButterBurger was,” Magera said.

“We had to start from the bottom. Frozen custard and ButterBurgers is not that marquee name where people think they want to try it. But once they know what it is, they do seem to like it. And from there it built. It was word of mouth and people I knew in town who would come and support me.”

Two years after opening the restaurant on Louise Avenue, Magera added a location at 2800 S. Minnesota Ave. Two years after that, he opened one inside The Empire Mall food court, and a year later Culver’s was on the east side at 5601 E. Arrowhead Parkway.

“If I had to do it again, I might do it a little slower because I know how stressful that time was,” Magera said. “But we’re very satisfied with the restaurants we have.”

The most recent store opened a year ago at 6301 S. Louise Ave.

“The new store is ahead of its time,” Magera said. “When we built on the east side, we were ahead of our time out there, too, so you have to go through the developmental part of it until the restaurant runs like it should. Right now, we’re built out in Sioux Falls. Five years from now, maybe there will be room for another one.”

Company culture

Company founder Craig Culver grew up in the hospitality business, working in Wisconsin supper clubs and later at McDonald’s for several years.

He opened Culver’s trying to blend a fast-food operation with supper club quality.

“He’s got a great family-business story,” Magera said. “They just wanted to make a living in their hometown. He had no vision of 650 stores nationwide with his name on it, but that’s what happened.”

Culver is authentic, Magera said, and a true “restaurant guy.”

“When he would stop in the restaurants, he’s not afraid to go right back in the kitchen and show somebody how to make a hamburger. He’s not afraid to grab a towel and wipe a table. He’s approachable by anybody and everybody. When he comes in, he introduces himself as Craig to all the staff.”

Culver also praises Magera’s leadership in the company.

“Nick has been with us for a long time. He took the chance on franchising with us back when we were hardly known outside the state of Wisconsin,” Culver said. “It takes a leader like Nick to make a business grow and thrive. We are very grateful Nick discovered us years ago.”

That makes him an ideal model for other family businesses, said Stephanie Larscheid, executive director of the Prairie Family Business Association.

“We can’t wait to hear Craig Culver share his experience with other family-business owners in our area,” she said. “Nick Magera and his team are an outstanding local example of the successful business model Culver’s has developed, and we know others will be eager to learn about it.”

The company also listens to its franchisees, Magera added, and appreciates the work that goes into running a business.

“They listen to what makes our day difficult and things we have to be concerned with in the future because this business is our livelihood and we have a lot of employees counting on jobs.”

In Sioux Falls, the market has responded to “the value, the quality of the food and the hospitality of our staff,” he said.

“But we work at it every day. It doesn’t matter how long we’ve been in business. We’re only as good as we are today.”