McDonald’s rival closes after 79 years

Very few fast-food chains have stood the test of time. Since McDonald’s was founded in 1940, dozens of would-be rivals have launched, had a moment in the sun, then disappeared into the great food court in the sky.

Burger Chef, which had more than 1,000 locations, closed in 1996, according to The New York Times, while Red Barn, once a 400-restaurant chain, closed its final 22 locations in 1986, a UPI report confirmed.

Burger Queen, which also used the Druther’s name, shut down in 1990 when most locations were converted to Dairy Queens, the company history web page shows.

Those are just some of the bigger names, not accounting for chains. Steak ‘n Shake, BurgerFi, and Jack in the Box remain in operation after collectively closing hundreds of locations.

Hi-Ho Burgers and Brew has been operating for 79 years. That’s not quite as long as McDonald’s 86 years and counting, but it’s an impressive run that’s coming to an end.

Hi-Ho Burgers and Brews closing its flagship location

Hi-Ho Burgers and Brews has a unique origin story.

“It all started when a resident of Dilworth, MN, wanted to open a burger joint up on the north side of Highway 10. His name was Glenn Tollefson, but he didn’t have a name for his burger joint. Leading up to the time he had to come up with a name for his new business, he was eating his favorite cracker, the Hi-Ho cracker. In 1947, the Hi-Ho Burgers and Brews was born,” the chain shared on its website.

The company also operates a location in South Fargo, which won’t be closing.

“Hi-Ho Burgers and Brews closed its doors for good at its Dilworth, Minnesota, location, but the family who owns the business says it’s time for something new. The Cariveau family told Valley News Live about the closure Sunday, thanking the community and staff for decades of support,” Valley News Live reported on the April 19 shutdown.

The Cariveau family shared a message on Facebook about the closure.

“We are excited to announce that there will be a new business coming to this location on June 1st. We hope all of you will welcome Kris Benlioglu, his family, and Grill 10 to the community and show them support like you have for us over the generations,” they posted.

Hi-Ho in South Fargo remains open and they will honor all gift cards and coupons at that location, according to the family.

“A sister company of that location is opening Hi-Ho on the Lake at Middle Cormorant Lake in the Swanies Resort starting on May 1,” KVRR reported.

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That new location, because it’s under different ownership, will not accept gift cards or coupons from the closed Dilworth location, or the remaining South Fargo restaurant, the local news website reported.

Hi-Ho on the Lake opens May at Swanies Resort on Middle Cormorant Lake.

“The Cariveau family lives at the resort and says the opportunity to take over the space — previously home to Sauce’d, which recently closed — was too good to pass up,” the family told Valley News Live.

Size and scale make fast-food chains difficult competitors for local players.

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McDonald’s has a major supply-chain edge

Hi-Ho’s closure reflects a broader reality: Small burger chains have struggled for decades to compete with the scale of giants like McDonald’s.

McDonald’s scale gives it significant leverage over suppliers, allowing it to secure lower costs and maintain consistency across its global system.

Stephen Zagor, a consultant focused on restaurants and food businesses and an adjunct assistant professor of business at Columbia Business School, explained why this is such an advantage.

“The biggest thing that restaurants do badly is purchase,” he told Business Insider.

He also noted that McDonald’s has been using Artificial Intelligence (AI) “to maximize everything from its point-of-sale to its supply chain.”

The fast-food giant has partnered with Google Cloud and IBM on various AI solutions, Business Insider reported.

In a space where margins are typically low, buying everything cheaper than your rivals allows for lower prices.

“QSRs operate in a highly competitive and cost-sensitive environment. Profit margins in the QSR industry typically range from three percent to nine percent of revenue, with most earnings derived from high sales volumes. However, achieving these margins requires maintaining operational efficiency, effective cost management, and continuous innovation to attract and retain customers,” Erik Vogelzang addressed in a deep dive for commercial real estate firm Matthews.

A smaller chain like Hi-Ho Burgers and Brews, a brand that prided itself on the quality of its burgers, has a built-in disadvantage because it’s paying more for everything, from meat to packaging, than its chain rivals.

Related: 57-year-old celebrity fried chicken chain down to 1 location

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