Nostalgia for Hot Dogs and Soft Serve are at an All-Time High
An Interview with Wienerschnitzel President and COO J.R. Galardi
It’s impossible to be unhappy when you’re eating a hot dog. Even the thought of hot dogs brings happy memories of backyard barbecues, baseball games, and spending quality time with family. In these times, when millions of Americans are facing uncertain times, they are turning to the food that brings the most comfort and the most happiness – and the hot dog delivers.
It shouldn’t come as a surprise then that the hot dog saw a surge in popularity as the economy came to a screeching halt. According to the research firm IRI, hot dog sales have increased by more than 120% during the pandemic. Wienerschnitzel, the country’s largest hot dog chain, has seen 12 weeks of record sales since March 2020.
Wienerschnitzel has thrived in business since its founding by cultivating a family culture from its leadership team to its franchise owners and their teams. Even better, the iconic hot dog franchise has been consistently ranked No. 1 in the hot dog category by Entrepreneur magazine, which is a testament to its proven business model, core menu, and gourmet-style hot dogs, which is bridging the gap for people discovering our brand as we expand into new markets.
In this wide-ranging interview, J.R. Galardi, President and COO of Wienerschnitzel, shares how the recent pandemic impacted Wienerschnitzel, how its working to change the negative perception of hot dogs, what makes the Wienerschnitzel franchise a best-bet investment, and more.
Wienerschnitzel is one of the few food brands in franchising that is doing remarkably well during this unfortunate time. Can you share a bit about what you learned?
Galardi: This whole thing has been a roller coaster, as it’s been a foreign experience to everybody. It’s definitely been a pretty steep learning curve navigating through this pandemic, but we’re fortunate enough to have a business model that is ideal for the situation at hand. Now with all the restaurants, the diamond restaurants, and the fast-casual, the majority are hitting a roadblock because they primarily only offer dine-in, delivery and take out. For Wienerschnitzel on a normal average, about 65% of our business in a typical week runs through our drive-thru. So we are already situated for the drive-thru customer now. It’s ramped up to about 95% of our business due to dining room closures. Having said that, throughout this whole time we’ve had to shift our operations a little bit. Overall, we were ready and we’ve been able to stay afloat, navigate, and actually thrive during this time.
During the pandemic, Wienerschnitzel was able to satisfy the demand for affordable meals that could feed an entire family. What is special about the way you’ve engineered your menu?
Galardi: First, our menu is designed to order in quantity. We have family packs, bundle deals like five hot dogs for $6.95, where you can mix and match and buy a lot of food at an affordable price. Secondly, our menu is Americana and it is nostalgic. If you ask anybody what comes top of mind when they think about a memory with a hot dog, it’s a sporting event, a barbecue, time with family — it’s always a positive memory. So during a pandemic, where everything is so unknown, you’re quarantined, and not really sure what’s going on out there, you look for things that bring you positive memories and comfort. A hot dog is one of those things and not only can you get it in bulk, but it can also be stored in your refrigerator for a pretty reasonable amount of time. Additionally, there are studies that show food, the delight of food, or the smell of a certain food will bring back a kind of dopamine rush that you got from a specific memory of your life. So, we’re lucky enough that our brand hits on all of those at the same time.
Too few people realize that hot dogs are actually a lot healthier than other fast food options. Can you talk about the negative perception of the hot dog and how Wienerschnitzel is combating that?
Galardi: We’ve been battling this halo around a hot dog that has a negative perception for a long time and it’s one of our goals to change the way people perceive the hot dog. We know our hot dogs come from quality cuts of meat. Our head of marketing calls the making of a hot dog an Epicurean process. It’s not something you can do at home, right? You have to have these quality cuts of meat, then you have to grind it down, put it in a casing and steam it. Unless you have some specialized equipment at home, the whole process is actually quite difficult to make and pretty amazing. Whereas like a hamburger, you ground beef, throw it on a grill, and you’re done. So it’s just the negative halo around it, and it’s something we’re working on changing. It’s all about educating people on the truth because our hot dogs are a low calorie, high-quality item.
Communities across the country are oversaturated with chicken, pizza, and burgers. As popular as hot dogs are, it’s still a very underserved segment. Can you explain why an investor should take a look at a hot dog franchise?
Galardi: Yes, 100%. The most common question I’m asked is ‘who is your largest competitor?’ Well, there’s two ways to look at it. Every restaurant is a competitor because you’re competing for a share of the stomach and that meal occasion. But when it comes to just, item for item competitor that really isn’t many. You could argue Sonic or Dairy Queen, but there really isn’t anybody in our category to compete with. So if you’re franchising a new market, you’re going to dominate that market. Why? Because there isn’t anything like it as a franchise. There’s a lot of concepts, depending on the real estate, and what you’re looking at can get you excluded. For example, if you’re a burger concept, and there’s already a burger concept in the same complex, often on the lease, they won’t let you do it. However, there’s rarely a hot dog concept in those centers. So when you’re searching for real estate as a potential, new or existing franchisee, you have a lot more options on where to expand into.
One of the things we’ve learned is that whenever society goes through these big events, such as September 11 or the housing bust, franchising historically has rebounded in tremendous ways. What makes Wienerschnitzel’s franchising model more attractive than it was before this pandemic?
Galardi: When you hit hard times families band together — and Wienerschnitzel is a family business. My dad founded it, my mom and I work in the business, and my sister was running philanthropy. We treat our corporate employees and our franchisees like they’re family. We even call them the Wiener fam. We want to get through this together, so in hard times, as a family, you band together and help each other out. What does that look like? For us, we lowered the royalties to 4% for a month, renegotiated leases and attempted to lower rent for franchisees, and came up with various marketing offers. Additionally, my phone is on all the time as I field calls from franchisees any time of the day or night. So, it’s a typical family environment. Granted, we do a thorough process to make sure that someone new coming in, whether that’s somebody working in the corporate office or a new franchisee coming in wanting to build the brand out, is going to fit our company culture. And so it’s not just, we’ll take your money and here’s a restaurant. You have to fit the culture and the culture is a loving family.
Ready To Own A Hot Dog Franchise?
If you are thinking that there must be a silver lining to this epidemic and you are able to think several months ahead, now is an excellent time to research and learn more about investing in a proven Wienerschnitzel business for your market.