In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Nathan’s Famous franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Nathan’s Famous franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Nathan’s Famous franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Nathan’s Famous’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average gross sales for all domestic Nathan’s Famous restaurants, including franchised and company-owned restaurants, in enclosed malls, transportation hubs, entertainment venues, freestanding restaurants, amusement parks, and limited menu restaurants that were in operation for the company’s full fiscal year ended March 26, 2017
- 2016 average food costs, paper costs, and direct labor costs for three of the franchisor’s company-owned Nathan’s Famous restaurants that were operated for the company’s entire fiscal year ended March 26, 2017
Section I – Background Information
14 Things You Need to Know About the Nathan’s Famous Franchise
Official Hot Dog of Major League Baseball
1. In late March 2017, Major League Baseball (MLB) announced that it had finally chosen Nathan’s Famous as the league’s official hot dog. While hot dogs have always been seen as the unofficial food of baseball, MLB had never officially signed a sponsorship deal with any single brand until then.
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Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does.2. As part of the partnership, Nathan’s Famous will be able to use MLB trademarks in its advertising. The company will also support the league’s “PLAY BALL” initiative, which promotes youth participation in baseball and softball. To celebrate the partnership, Nathan’s Famous and MLB brought a mobile unit to Midtown Manhattan to give out hot dogs and interact with fans.
3. Although Nathan’s Famous is now the official hot dog of MLB, individual teams and stadiums will retain their own hot dog partnerships. For example, Vienna Beef sponsors the Chicago Cubs and White Sox. Nathan’s Famous was already the official hot dog of the Miami Marlins, New York Mets, New York Yankees, and St. Louis Cardinals.
Donates Hot Dog Cart to Miracle League
4. In July 2017, Nathan’s Famous donated a new hot dog cart to the Miracle League of Miami-Dade. The brand also donated $1,000 in Publix Super Markets gift cards that the organization could use to fill the cart. The Miracle League of Miami-Dade works to offer special accommodations for special-needs children to play baseball.
5. Nathan’s Famous made the donation during a ribbon cutting ceremony and inauguration of the new Miracle League of Miami-Dade field at Tamiami Park. The field features a custom-designed synthetic turf baseball field that will provide access for more than 69,000 children and young adults with physical and mental challenges in Miami-Dade County, from Homestead to North Miami.
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code to see which franchises are still available near you, saving you months of wasted research.🔴Free Webinar: 6 Under-the-Radar Franchise Concepts That Serious Buyers Should Know
Every month we feature 6 standout franchises that could be the opportunity you've been looking for, each evaluated on disclosed financials and matched to the type of buyer most likely to succeed with it. Can't attend live on October 27 at 6PM EST? Register now and we'll send you the full recording the next day. Reserve your spot here.6. Wayne Norbitz, Nathan’s Famous executive board member and former 26-year president, said, “We are proud to once again support the Miracle League of Miami-Dade as they open this new field. It’s important to us that we help organizations who are helping others, especially special-needs children.”
Introduces Pre-Cooked, Quarter-Pound Steak Patties for Purchase at Retail Grocery Stores
7. At the end of August 2017, Nathan’s Famous expanded its grocery store offerings with the launch of Nathan’s Famous Pre-Cooked, Quarter-Pound Steak Patties. The brand’s pre-packaged hot dogs have been available at retail locations since the early 1980s. The burgers are made with fresh beef, with no fillers or artificial flavors. They are available in two varieties, Original and Cheddar Cheese, at select U.S. retailers including Kroger, Publix, and Super Target.
8. According to Nathan’s Famous, its steak patties are seared, slow cooked, and individually wrapped to lock in flavor and freshness. This pre-cooking process will allow customers to choose their level of doneness through microwaving of the patties for the specified amount of times in the instructions.
9. Mike Paribello, senior director of marketing for Smithfield Foods (the licensee of Nathan’s Famous pre-packaged hot dogs), said, “Nathan’s Famous Steak Patties give consumers exactly what they’re looking for – a fast, convenient way to enjoy a fresh burger in seconds, all without the hassles of the grill and regardless of the weather. We’re excited to bring a premium beef patty to the refrigerated aisle and show how pre-packaged, pre-cooked patties can be an easy and delicious meal solution for families across the country.”
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code to see which franchises are still available near you, saving you months of wasted research.📈Dreaming of Multi‑Unit Success? Lock In Prime Territories Before They're Gone.
Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations, before someone else does.Company History
10. Nathan’s Famous started out as a hot dog stand in Coney Island, New York in 1916; it was run by founder and company namesake Nathan Handwerker. He started the business with his wife Ida and used her hot dog recipe along with a secret spice mix created by Ida’s grandmother.
11. Prior to selling his own hot dogs, Handwerker worked at Feltman’s German Gardens, which was also on Coney Island, and sold hot dogs for 10 cents. Handwerker decided to undercut Feltman’s and only charged 5 cents for his hot dogs. The initial stand was an immediate success and for the next seven decades, the Handwerker family owned and operated Nathan’s Famous.
12. Nathan Handwerker’s son, Murray, expanded the business and opened a second location in 1955 and a third one a decade later. To meet the growing demand for Nathan’s Famous, a fourth location was opened in Times Square in the heart of New York City in 1971. A year later, Nathan’s Famous’ Fourth of July hot dog eating contest debuted at the original Coney Island location.
13. In 1987, the Handwerker family sold all of its Nathan’s Famous locations to a group of private investors, who started franchising the brand the following year. Today, there are over 260 Nathan’s Famous restaurants around the world and its branded hot dogs are sold at thousands of retail locations in all 50 states and internationally.
Entrepreneur’s Franchise 500
14. Nathan’s Famous has ranked on Entrepreneur’s annual Franchise 500 almost every year for the past 10 years, except in 2008, 2017, and 2018. The company’s highest rank was No. 128 in 2011, while its lowest rank was No. 493 in 2016.
Section II – Estimated Costs
- Please click here for detailed estimates of Nathan’s Famous franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Nathan’s Famous’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
- Please note that the information disclosed in this Item 19 only relates to Nathan’s Famous Restaurants, and not to Branded Menu Program Operations or Nathan’s Famous Co-Branded Operations within Miami Subs restaurants.
- You should not consider this information at all in deciding whether to establish a Branded Menu Program Operation or a Nathan’s Famous Co-Branded Operation (or a smaller-format Nathan’s Famous Restaurant, such as a Kiosk or a Mobile Unit) or in a Miami Subs restaurant.
Part 1 – Average Gross Sales for Domestic Restaurants
- Part 1 below provides the average gross sales, based on the reported sales, for all domestic Nathan’s Famous restaurants, including franchised and company-owned restaurants, but excluding: (a) Branded Menu Program Operations and Nathan’s Famous Co-Branded Operations with Miami Subs restaurants; and (b) restaurants that first opened for business after March 28, 2016 (i.e. restaurants that were not in operation for the company’s full fiscal year ended March 26, 2017).
- For the purpose of providing the information in Part 1, the franchisor divided the system of domestic Nathan’s Famous restaurants into the following six distinct categories:
- (1) restaurants located within enclosed shopping malls;
- (2) restaurants located within transport hubs (such as airports, train stations, and travel plazas);
- (3) restaurants located within entertainment venues (such as hotel casinos and game room establishments);
- (4) traditional freestanding restaurants;
- (5) restaurants located in amusement parks; and
- (6) limited menu restaurants, co-branded or otherwise, located within another concept (other than Branded Menu Program Operations and Nathan’s Famous Co-Branded Operations with Miami Subs restaurants) and seasonal restaurants.
- The sales numbers for franchised restaurants are based on sales reporting provided to the franchisor by its franchisees for the purposes of making royalty payments and marketing development fund contributions. The franchisor has not audited these figures and cannot verify their accuracy.
- The gross sales numbers in Part 1 are for the franchisor’s fiscal year ended March 26, 2017.
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am interested in a franchise of this particular hotdog ,nathans.please tell me if i can purchase a franchise to use it on a fast food truck . i well know the product .