The owner of fast-casual brand The Original Hot Dog Factory, Dennis McKinley, is no stranger to franchising. The serial entrepreneur is a mainstay on Bravo’s The Real Housewives of Atlanta, one of TV’s most popular guilty-please franchises.
Franchise businesses, of course, is another animal altogether, and it's one McKinley has tamed successfully. So successfully, in fact, that his hot dog franchise opened 15 new locations in just 90 days at the height of the COVID-19 crisis, a time when few other businesses were investing in expansion.
Growing up in Detroit, McKinley says he thought that all hot dogs were made Coney Island-style: on a steamed bun and topped with chili sauce, chopped raw onion and a bit of yellow mustard. Once McKinley graduated from college and started to see the world, he discovered a wide variety of different hot dog styles based on regional differences and came up with an idea.
In 2015, he purchased, revamped and rebranded the Smyrna, Michigan-based restaurant The Original Hot Dog Factory, where he would feature all of these hot dog styles on one menu.
In recent years, the franchise has gained nationwide recognition due to McKinley’s appearances on The Real Housewives of Atlanta. He is engaged to reality star Porsha Williams.
McKinley spoke with 1851 Franchise to discuss his secrets to franchising success amid COVID-19.
Finding The Right Time to Franchise
When it comes to the secrets to franchise success, McKinley notes that step one is finding a consumer offering that will fill a void in the marketplace and work anywhere and everywhere. To achieve this, franchisors need to be perceptive of what is working about their concept and what isn’t. One common mistake that emerging brands make is starting to franchise before they have optimized their consumer offering and business model.
For example, at McKinley’s original location in Smyrna, customers kept mentioning how far they drove just to get to the restaurant and how much they wished one would open in their area. Only then, McKinley says, did he know it was time to start franchising.
Perfecting The Business Model
Once the consumer demand is there, McKinley says step two is making sure the franchise model is sound. Instead of just growing for the sake of growing, franchisors need to take the time to optimize the concept’s unit-level economics by establishing the necessary operational and support infrastructure.
“I’ve been an entrepreneur since I was 18 and I bought my first franchise when I was 23,” said McKinley. “Quickly, I noticed that franchisors just wanted cash, even if that meant the franchisee wasn’t making any. I decided that I one day would start my own concept and become a franchisor that focused first and foremost on helping franchisees make money.”
What The Pandemic Means for Restaurants
Since franchising, The Original Hot Dog Factory has experienced tremendous growth, with 2020 being a particularly strong year, despite the pandemic.
“We’ve been lucky to be able to continue to grow despite the pandemic, as we were well-positioned for the changing consumer demand in the restaurant space,” said McKinley. “Most notably, our model wasn’t actually hurt by COVID because a large percentage of our business relies on take-out.”
Whether through adapting the menu, adopting new technology or pivoting operations, McKinley said that the pandemic presented a range of challenges and opportunities for restaurant owners to engage with customers.
“Hot dogs are quick and easy, customers can scarf a few down in a few minutes,” he said. “When COVID-19 came around, restaurants had to learn quickly that customers wanted something that was grab-and-go, and our businesses really boomed, especially with third-party delivery.”
What The Pandemic Means for Franchising
In general, franchised businesses have weathered this year’s economic crisis better than their independent counterparts. Especially in the restaurant industry, McKinley recommends entrepreneurs looking for new business opportunities check out franchises first because they have a strong advantage over independents.
”Franchising provides support, systems, brand recognition and an established customer base,” he said. “If you can find a franchise brand you love, it is a truly great career path.”
With an influx of unemployed professionals across the country looking for stability, franchising could actually be positioned for a resurgence in popularity. Plus, with 110,000 restaurants closed across the country, prime retail space is more available than ever for large operators in the franchising space.
“Even with COVID-19, we’ve seen a surge in interest from candidates that were laid off and want to take control of their own destiny,” said McKinley.
Finding The Right Franchisee
Now, McKinley has big plans for the hot dog brand and is ready to support those new franchisees in any and every way possible.
“We believe that we have the best hot dog in America and we plan on bringing it to every city, every stadium and every airport in the country,” McKinley said. “Our target is to have 100 locations in the next 24 to 36 months. We have 60 units already committed in cities like Detroit, Philadelphia, Charlotte, Raleigh, Houston, Dallas and Baton Rouge.”
While fast growth is great, McKinley also says that taking the time to find the right franchisee for the specific concept is a huge key to successful franchise development. Whether they are looking for multi-unit operators or people with specific career backgrounds, franchisors need to outline the profile of their ideal franchisee and market directly to those candidates.
Also, while many major franchisors have been called out for lack of diversity in their franchise system lately, McKinley’s The Original Hot Dog Factory is an example of a concept built with diversity in its DNA.
“100% of our owners are people of color — Black or Brown — and at least half are women,” he said. “We’re very proud of that fact.”
Advice For Franchise Professionals
McKinley isn’t just a CEO, he eats, sleeps and breathes franchising. Beyond The Original Hot Dog Factory, McKinley is also a part of Franchise Genies, a company that helps other franchisors through the process of franchising their business.
When it comes to boiling down all of his experience and giving a piece of advice for aspiring entrepreneurs entering the industry right now, he says it is simple.
“Never give up,” McKinley said. “Stay the course, perfect your offering and focus on whatever it is that you do better than everybody else. If you focus on that, and don’t spread yourself too thin, you can’t lose.”