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Nathan’s wants to be famous for more than hot dogs

The company is upgrading its menu and its design as it looks to turn around its restaurant chain’s fortunes.
Photograph courtesy of Nathan's Famous

James Walker wants Nathan’s Famous to be known for more than just hot dogs.

So in the past several months, the Jericho, N.Y.-based chain has been upgrading its burgers and sandwiches, all with the goal of upping their quality to match what the chain is more, er, famous for.

“This is a higher-quality concept,” said Walker, a longtime industry executive hired last year to head Nathan’s restaurants division. “We wanted to elevate the entire menu to the level of the hot dog. They truly are best in class.

“We want to make sure every single thing we serve is at that level.”

It’s not just the menu. The company has been working to improve its prototype, add new technology and change the way it brings in new franchisees to run the chain’s restaurants, all in the goal of turning the brand around.

Nathan’s has seen a steady decline in sales and unit count for several years. The chain operated 300 U.S. locations in 2013, according to data from Restaurant Business sister company Technomic. That was down to 213 last year.

The company’s five-year U.S. system sales compound annual growth rate through 2018 was negative 5.5%.

“We certainly have a lot to do,” Walker said.

He said the company’s strategy isn’t a straight brand overhaul. “This is not a radical departure,” Walker said. “It truly is evolution and not revolution.”

The company began with the menu, upgrading the chain’s New York Cheesesteak and included items such as its chicken sandwiches. It also has a new line of shakes. “We have focused on elevating all of them to a very premium level,” Walker said. He noted the items are “very large from a portion-size standpoint” to provide customers with “great value.”

Walker believes the size of the menu items is a selling point for the brand. “I don’t know of any brands that serve sandwiches with 8 ounces of chicken. All our burgers are double burgers,” he said. “We elevated the quality and increased the portion size.”

That said, broad-menu concepts in recent years have taken something of a back seat to narrow-focused concepts, so why not just focus on hot dogs?

Yet Walker said that Nathan’s broad menu is a selling point for the brand. “When you think of Nathan’s, you think of a great burger and great chicken and great cheesesteak, along with that hot dog,” he said. “That was really important for us as well.”

Plus, he said, “That cheesesteak is doing so much for us,” Walker said.

The company is working on a new design, too. The chain has renderings and floor plans and is looking for potential locations in Tampa and its home market on New York’s Long Island. “We want the design to really convey that we’re more than just the best hot dogs,” Walker said. “This is a design that is very clearly in alignment with our positioning and menu strategy. As someone drives up, they see that we are more of a premium concept, and we are absolutely a concept very focused on speed of service.”

Nathan’s is looking at technology, too. The company recently added third-party delivery, but it is also examining “everything from point-of-sale, processing, innovation around technology from a marketing standpoint and innovation in the restaurant, from kiosks to menu boards,” Walker said.

The “fourth leg” of Nathan’s comeback stool is the company’s approach to franchising. The vast majority of the chain’s locations are franchisee operated. The company recently changed its recruitment process and its discovery day to find franchisees that “can be brand champions.” Nathan’s has already started recruiting new franchisees.

The company is targeting areas where the brand is well-known, such as Florida and Long Island. But Nathan’s does have a strong franchisee in Las Vegas, far away from its core markets. “One of the things I love about hot dogs is they’re synonymous with fun,” Walker said. “You can eat a hot dog and pull a slot machine or roll the dice.”

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