Editor’s note: This article is part of an ongoing franchise series, which highlights brands that are new to or are aggressively expanding via franchising. Is your restaurant starting to franchise? Email us at [email protected].
When Dog Haus founders Hagop Giragossian, Quasim Riaz and Andre Vener opened their first Dog Haus restaurant in October 2010 in Pasadena, California, franchising was far from their minds. But after opening their second location a year later, and then a third unit six months after that one, franchising started to enter into the conversation, said Erik Hartung, executive vice president at Dog Haus.
By 2013, Dog Haus created the nuts and bolts of its franchising program. The only problem was none of the founders had a background in franchising, Hartung said. Dog Haus was able to bring on a head of marketing and restaurant designer with extensive experience, but not with franchising, he said. In the beginning, Dog Haus did everything franchisors aren’t supported to do. It partnered with anyone with an interest in the brand and took a scattershot approach to development, Hartung said. The company made up for the lack of franchising experience with hard work and a lot of late nights, he said.
Over time and after attending several conferences, management started to have a better understanding of franchising needs and refocused on attracting multi-unit operators, which was a push for several years. But one day, Dog Haus reviewed its sales roots and found its top five locations were all operated by people with no previous restaurant experience, Hartung said.
“We’re very hands on and collaborative. We really go out of our way to have constant communications with our franchisees and we realized that that really provide the opportunity to cast a broader net in terms of who we can potentially franchise with,” Hartung said
Widening its net was also made possible by providing a lot of support to franchisees, Hartung said. After initial training, Dog Haus sends four trainers to each location to train everyone at the restaurant to get it ready to open. Its marketing team is also “extremely hands on,” and the company offers franchisees weekly calls with operations and marketing, he said.
Since launching franchising, Dog Haus has grown to have one corporate location and 50 franchised locations as of early December. Interest in franchising has grown as the Dog Haus footprint has expanded, which Hartung attributed to the company being “an it brand.” Average unit volumes at its locations have consistently risen in the last three years. AUVs grew from 1.2 million in 2019 to 1.8 million in 2021, he said. Hartung says he is now fielding 10 to 20 calls per day from interested franchisees.
Dog Haus also allows franchisees to add a variety of ghost kitchen brands to their operations to provide an additional revenue stream, Hartung said. Virtual brands were an idea management was thinking about for some time, but after discussing with franchisees in 2020 and receiving positive feedback, Dog Haus launched six brands under the moniker The Absolute Brands.
Dog Haus requires franchisees to use Toast POS, which offers various tools outside of point-of-sales, including inventory management, Hartung said. It also partners with online ordering and payment platform Bbot to drive diners to its first-party delivery ordering channels.
Development plans: Dog Haus has sold over 100 franchised locations that are expected to open within the next five years, Hartung said. A little over 20 locations are in development with leases signed. Hartung expects to add a significant number of franchisees next year, since he is seeing a lot of interest in the brand. In 2023, he plans to add 20 to 25 new franchisees and open about 20 locations, in addition to signing anywhere from 10 to 20 new leases. He said he expects 2024 to be a significant jump in franchising growth in comparison.
Dog Haus has largely been growing organically, but since developing a franchise marketing plan during the COVID-19 pandemic, expansion has been more targeted, Hartung said, adding that the company is working to fill in the gaps from its earlier scattershot approach. The chain has been targeting Florida, New England, Texas and the Pacific Northwest, and is looking to grow in markets like Kansas City, Hartung said.
Ideal franchisees: Dog Haus looks for people with business and/or restaurant experience and acumen, financial stability, and who are a cultural fit for the organization. The company is also registered with the Small Business Administration so franchisees would have the ability to apply for an SBA loan, which requires 20% of liquid capital contribution.
