BurgerFuel's coup in getting Americans to take a bite of the firm is part of a new wave of international exposure.

There's a bit of a "coals to Newcastle" feel about the exciting news that US investors have backed Kiwi gourmet burger chain BurgerFuel Worldwide.

America is the spiritual home of the hamburger. Burger lovers in this country still go silly at the arrival of any new US franchise. Business news stories about Carl's Jnr have a habit of soaring off the Herald's web readership charts. The hysteria about the mere hint of the possible arrival of the Californian In-N-Out Burger chain last year was incredible.

So it was exciting to hear that the Yanks are buying into a home-grown burger success story. And not just any Yanks - Franchise Brands, which has taken a 10 per cent stake in BurgerFuel, with an option on 50 per cent, is the investment company set up by Subway founders Fred DeLuca and Peter Buck to seek out new opportunities.

The shares have soared on the news - in fact they've doubled since the announcement on Tuesday.


It is a fantastic success for the founders and management team who have worked hard to take their vision to the world for several years and have stuck at it when the odds looked very much against them.

It also provides another great example of how much better New Zealand business has become at selling its own story internationally.

Looking back through the archives (always a risky thing to do) it is fair to say I was sceptical about BurgerFuel when it listed in 2007.

Since its inception in Ponsonby in 1995 BurgerFuel has always been cool and popular with inner city Aucklanders. It has a bright neon, retro-futuristic style decor and tasty menu of giant burgers made with quality ingredients. But that kind of hip, foodie popularity is hardly unique. Similar ideas come and go all the time in most big urban centres throughout the world.

What appears to have made the difference here is the people behind the brand and the work they have done on the operations and strategy behind the shopfront. As a listed proposition it looked pretty weak in 2007. There was a feeling among brokers that it was overpriced at $1 a share - valuing the company at $60 million.

That price factored in hopes for international expansion but that looked like a tough task with the gourmet burger niche already well developed in the obvious markets such as Australia and the UK.

The float aimed to raise $15 million but managed just $5.25 million. In short, it was not a great success.

It looked like the cynics would be proved right and worse was to come as the shares fell over coming months. But something was about to change. The management team, led by Josef Roberts, had a clever idea that seemed at the time to come out of left field.

In 2008 the company announced it had a Middle Eastern franchise deal and planned to open stores throughout the region.

It seemed pretty ambitious for a company that was still struggling to break the Australian market and it certainly didn't help the share price which slid to an all-time low of just 20c by March 2009.

Not long after that the company announced the appointment of a new director, Alan Dunn, a man who could probably claim to be New Zealand's leading authority on selling hamburgers. He was chairman and chief executive of McDonald's in New Zealand from 1993 to 2004 before spending three years at the company's Chicago head office where he had responsibility for around 500 McDonald's stores across Sweden, Finland, Iceland, Denmark and Norway.

Despite difficulties and long delays BurgerFuel eventually opened a store in Saudi Arabia in early 2010.

More Middle East expansion followed, with stores in Dubai, Kuwait and an attention-grabbing move into Iraq.

Things have gone well in the Middle East where the company cleverly picked the high demand for Western food and the high level of disposal wealth in key geographic locations. It seems to have done a great job of handling the cultural differences and logistical challenges of operating in the Middle East and has found good people on the ground to work with there.

There are now 18 BurgerFuel restaurants operating in the region.

Last year the company posted a net profit of $1.1 million, in the 12 months ended March 31, up from $708,000 a year earlier. Revenue climbed 25 per cent to $12 million, led by a 35 per cent gain from the Middle East.

Those kinds of earnings still don't justify the current share price but some heavyweight investors, including locals, like the BurgerFuel story and have picked it as a growth stock. And that throws it into a similar category with high-flying tech stocks such as Xero and Wynyard Group with the focus on reinvesting revenue in expansion rather than returning big profits - for now.

Growth stocks are risky. Specialist funds run disciplined strategies to manage that risk. They spread their investments across wide selections of growth stocks and are able to buy in, and sell down, their holdings on peaks and troughs so that they can often book a solid gain well before companies deliver on fundamentals. So the shares still aren't necessarily one for the average investor.

But the great thing about BurgerFuel and the tech stocks such as Xero that have led the way on the NZX is that they all contribute to the idea that New Zealand is a place where innovative business can thrive.

What these companies are achieving now in terms of international exposure was hard to imagine a decade go.

Kiwis selling a story to US or Asian investors were up against it. Let's face it we were that weird little farming nation on the edge of the world, that sailed and played rugby.

That has changed and the New Zealand story gets better with each one of these success stories.

The local tech boom is a fantastic work in progress. Like most of those tech stocks BurgerFuel still has a long way to go until its profits justify its valuation. It was valued at nearly $166 million by the close of trading on Friday.

BurgerFuel differs in that it is thoroughly old school - a real world, retailing, marketing and branding story - achieved without any high tech, intellectual property. It doesn't even appear to have any secret herbs or spices - all the ingredients are there on the menu.

But the company has a winning formula and is definitely part of a new generation of New Zealand businesses that are unafraid to sell an idea anywhere in the world.