Chain Leader

David Farkas

Dog Days
December 15, 2006

“There are two ways of building a brand,” George Goulson tells me in a recent phone interview. “You can acquire one or build your own brand.” Building is what Goulson and the descendants of Johnny and Minnie Colera are doing—beginning with a single 68-seat restaurant called Johnny’s Lunch—in Jamestown, N.Y.

I’ve never been there, though the place is usually mobbed on account of its hots (as in, hot dog) and secret-recipe sauce, Goulson claims. When I went to the Web site, I noticed another reason people showed up: The prices are ridiculously low. A Texas Hot is only 93 cents. So is a hamburger. A cheeseburger runs $1.05. A chicken sandwich will set you back $2.24. But Goulson says no one eats just one hot dog. Three is more like it..

Back to those descendants. Johnny’s daughter, Diane, and her husband, Gust, operate the 70-year-old Jamestown restaurant. For now, it’s the only Johnny’s, though not for long. Goulson, a veteran development officer who has worked for Little Caesars and A&W Restaurants, along with Anthony and John Calamunci, Johnny’s grandsons, intend to franchise 325 Johnny’s Lunches within five years.

The first will open early next year, perhaps in Detroit. Goulson says you can get one open—two days after trucks deliver the modular unit from Jamestown—for merely $173,000. That’s turnkey. You’ll ring up $800,000 in your first year, he adds. That’s pro forma. Yet who really knows how much you’ll put in the register. The original Johnny’s does $1.4 million on a check average of about $5, Goulson says. But then, it’s been around for seven decades.

Goulson retained MapInfo, an Ann Arbor, Mich.-based site-selection company to figure out psychographics and demographics. “Interestingly enough, the main demographic would be 25- to 49-year-olds. And lots of families. Also lots of teenagers and college kids. They are hot-dog eaters,” he explains.

Of course, if hot dogs were all that much in demand, wouldn’t there already be a large chain taking advantage of it? Goulson doesn’t look at it that way. He sees the competition for hots as fractured, mostly into operators with one and two shops. Even Wienerschnitzel and Nathan’s Famous—and a handful of other chains—have relatively few units compared to any national chain. Says Goulson, “It’s kind of how burger chains began.”

Posted by David Farkas on December 15, 2006 | Comments (0)