BangBang Mongolian Grill Sounds and Smells Like Success

There’s more than yellow fin tuna and fresh vegetables sizzling on the circular grill at BangBang Mongolian Grill, where customers heap bowls with fresh, healthy ingredients, listen to the rhythmic “bang-bang” of the chefs' spatulas and return to their tables with plates of steaming Asian cuisine – all in a matter of minutes.

What else is hot in restaurateur Steve McFadden’s start-up — a sensory mix of aromatic curries and tongue-tickling spices — in West Des Moines’ tony Jordan Creek area?

Six months shy of its two-year anniversary, BangBang Mongolian Grill has sold its first national franchises. Two restaurants are set to open in Baltimore in February, four more will follow this spring, and final agreements are in the works for another half dozen scattered around the country.

“He is a genuis, but he also puts in a lot of hard work. For everything he’s built, there were 10 things that he looked at that weren’t right.”

By appealing to the finickier tastes of Americans who still want to eat on the run, but without the fat, sodium and stomach-turning ingredients (“pink slime,” franchiser McDonald’s hamburger additive, anyone?) McFadden has built a business his new partner says is not only riding national trends for healthy fast casual dining, but defining new ones.

BangBang’s expansion is bucking industry trends. A study suggesting that 90 percent of restaurants fail has been debunked, but the failure rate after one year is still daunting: as low as 30 percent, according to a University of Central Florida study.

“I truly believe that BangBang is on the cusp,” said Bob Bernotas of Baltimore, the managing partner of the new BangBang Franchise Holdings LLC created to oversee the restaurant’s national operations.

The partners include Dr. Shawn Dhillon, a Baltimore internist whose focus on managing cardiovascular disease among his patients attracted him to dining options that allow customers to tailor their choices to their dietary needs.

“It’s not reinventing the wheel, but taking elements from other successful concepts,” Bernotas said. “There’s nothing new, component by component, but no one out there has put them together the way we have.”

New National Franchise Adds to Fast-Dining Landscape

McFadden’s BangBang Mongolian Grill borrows from fast-casual restaurant trend-setters like Chipotle, a multi-billion-dollar Mexican chain that provides fresh meals fast; Pei Wei Asian Diner, P.F. Chang’s upscale fast-food subsidiary that builds on consumer; and Panera, which is still showing strong profits in 1,400 restaurants built around the premise that customers will pay more for higher-quality fare.

McFadden and his partners have also removed a big chunk of the financial risk for franchisees by reducing

The national iteration of BangBang Mongolian Grill still focuses on fresh, healthy ingredients, but in server-less operation that shaves $20,000 in monthly labor and related costs. Each location will employ 22 full- and part-time workers, compared with 50 at the West Des Moines restaurant. A smaller footprint — 4,200 square feet versus 6,200 seats in the full-service West Des Moines restaurant — sacrifices only 18 seats.

“It shows what people on the franchise level can be part of without a lot of start-up costs,” said Micholyn Fajen, a West Des Moines marketing consultant who, with the restaurant’s national expansion, signs on as social media director.

Bernotas said BangBang beats its competition in other respects, as well. Chipotle, for example, has a fixed menu with healthy choices, but BangBang’s “significant advantage” is that customers can “make it as healthy as they want it to be.”

Midas Touch for Iowa Business Owner
McFadden, who built a popular regional franchise with Mickey’s Irish Pub, has developed a reputation for having a Midas touch when it comes to picking business models that work.

“He’s phenomenal,” Bernotas said. “He understands restaurants thoroughly and has a great deal of vision. Everything he’s gotten involved in seems to have succeeded in a big way. That he launched against stiff competition in Des Moines and is doing as well as he is shows his visionary aptitude is second to none.”

McFadden's wife and business partner, Trisha, says that’s true, but he also works hard.

“He is a genuis, but he also puts in a lot of hard work,” Trisha McFadden said. “He turns over every rock. For everything he’s built, there were 10 things that he looked at that weren’t right.”

Bernotas thinks the goal of opening 500 restaurants within five years is realistic.

For one thing, McFadden “has been successful at about everything he’s done,” Bernotas said. For another, the restaurant has competition, but not what the Baltimore franchising expert would call distinctive competition.

“Looking at how the competitors have done in this subcategory of Mongolian cuisine, looking at their general lack of sophistication and watching the growth of Chipotle, I’m pretty confident we can achieve that goal,” he said.

HuHot, one of the leaders in the Mongolian grill subcategory, beat McFadden’s BangBang Mongolian Grill to the market by several years, opening its first restaurant in Missoula, MT, in 1999. There are others, but in general, they lack the sophistication of McFadden’s concept, Bernotas said.

“We thought this was a tremendous opportunity, a blank canvas,” he said.

Kids Aren’t “Grumpy” About Eating Vegetables
McFadden said his restaurant “takes what they’ve done and is doing it better.” BangBang adds a soup of the day, a salad and a healthy frozen yogurt dessert with lots of fresh fruit. Fajitas and appetizers are available, as well. Lunch costs around $10, dinner about $15 — prices that compare favorably with the competition.

Mongolian grills use a flash stir-fry method that retains the nutrients of the fresh vegetables and thin-sliced meats and fish. Trisha McFadden says it’s never been so easy to get the couple’s three daughters — ages 10, 7 and 4 — to eat their vegetables.

“They love it,” she said. “They’re not grumpy about it. Before, eating their vegetables was something they had to do, but now they get to decide which vegetables they want.”

McFadden, 42, has been in business since he was a 19-year-old who borrowed against his car to open a small pizza business in Allison, a wide spot in the road in northeast Iowa. A year later, he opened a second location in nearby Reinbeck. The businesses didn’t have a beer permit, McFadden said, because he wasn’t yet old enough to drink.

He eventually sold the business to pay for a sales and marketing degree, which he has since parlayed into a number of successful businesses. The first, Mickey’s Irish Pub, grew from a single location on 86th Street in Clive to a regional chain of eight bars in Iowa, Nebraska, Missouri and Kansas.

Owner Sells Chain of Bars to Give Daughters Better Legacy

He had an epiphany on his daughter’s birthday, when Trisha was pregnant with the couple’s third daughter.

“I don’t want to pass bars down to daughters,” he decided at the time. “Owning bars in four states and being out until 4 in the morning wasn’t good for me.”

So he began selling off the Mickey’s bars, and invested the profits in Massage Heights, a San Antonio-based franchise, and became one of the first franchisees to open a location outside of Texas. His 10 businesses include the West Des Moines location at 640 S. 50th St., as well locations in Ankeny, Clive and Johnston in central Iowa.

The experience added to McFadden’s franchise repertoire. He opened BangBang Mongolian Grill with the idea of taking the concept to the national market. It happened more quickly than he expected once he sold a local real estate broker on the idea that his restaurant was a better fit for the area than a collection of national franchises haggling for a spot in the fast-growing commercial area of West Des Moines.

The property had been developed by O’Charleys, a casual restaurant that fell victim to the economy and closed in 2009.

The broker, Mick Grossman of Iowa Realty Commercial, said McFadden offered “something exciting and new, besides burgers, fries and inexpensive steaks”

“If you look at BangBang, you wouldn’t know it wasn’t a national franchise right from the start,” he said. “People had no idea it wasn’t a multi-location corporate restaurant.”

Grossman said the restaurant establishes itself at the door as “a place you want to be part of. It has a great-looking atmosphere, with great food, and providing something that’s a little different from the standard what’s been out there forever and repackaged with a different name.”