Dog Haus has grown to about 90 locations in its 13-year history, and it has done so with a wildly diverse portfolio of traditional restaurants, biergartens, digital-only ghost kitchens, virtual brands, and venue locations such as Live Nation Amphitheaters and the Rose Bowl.
According to Datassential’s 2022 Top 500, the California-based hot dog/sausage/burger concept grew its footprint by nearly 7.5% from 2021 to 2022, while sales jumped by over 36%. Cofounder André Vener said the company is opening about two stores a month, with 15 more expected by the end of this year and a goal of being at 100 locations by the end of next year.
“We have a lot of franchise interest, and we still say no more than we say yes,” Vener said during a recent interview. “It’s a true partnership; if they’re successful, we’re successful. If they grow, we get more royalties. If they’re happy, they’ll open more stores.”
Dog Haus’ approach to selecting franchisees may be considered a bit unusual. Prospects are invited to the company’s headquarters in Pasadena so the Dog Haus team can get to know them.
“We’ll go out for a drink and usually in 15-to-20 minutes, we’ll know if it’s somebody we want to partner with,” he said.
There also aren’t definitive qualifications, and Vener noted that eight out of the top 10 Dog Haus stores are run by franchisees who have never before worked in a restaurant.
“We have a franchisee who runs five stores in the DC area who works at Microsoft full-time and he’s crushing it. We just want to like the people and if the person has some skillset, whether it’s marketing or finance, we can teach them the food part,” he said.
Dog Haus’ sweet spot is that five-to-10-store franchisee, though there have been 20-and-30-unit deals signed. Notably, “we don’t really want to be thrown in with a bunch of other brands,” Vener said.
The current franchise interest is driven by several factors. In addition to diverse format opportunities, Dog Haus has retained a significant chunk of its off-premises business from the pandemic; delivery alone accounts for over 50% of the sales mix, for example.
“What’s happened is we’ve always been ahead of the game on delivery. We started testing out ghost kitchens in 2018 and had the packaging and technology to get it ready and off the ground. Then we started virtual brands in 2019, that’s obviously an important part of delivery. Then in the pandemic, we went flying and were ahead on same-store sales because of our virtual brands,” Vener said. “We thought it was going to crash after the pandemic, but it’s completely steady.”
On the virtual side, the company’s Bad-Ass Breakfast Burritos concept has far exceeded expectations and could surpass the signature Dog Haus business within the next few years. Dog Haus also remains bullish on the ghost kitchen model, using them to prime and test a market before considering brick and mortar options. Vener said they’re also a good base to try out new menu items.
Of course, to maintain such a robust off-premises presence, the company needs to have sufficient labor. Vener said it’s still hard to find people, but the labor pool has improved “significantly” over the past two years, while turnover rates have also improved.
“We treat everyone right and have things like tip sharing with back-of-house and front-of-house employees and profit sharing with managers, letting them see the P&L so they can start managing labor the right way,” Vener said. “We’ve also gotten really good at cross training so we can promote people from within. Upward growth is a good thing and as our company grows, we can bring them along.”
Contact Alicia Kelso at [email protected]