Published : Tuesday, October 18, 2016 | 8:03 PM
A popular, upscale hot dog chain headquartered in Pasadena inked a deal worth $500 million on Tuesday that could see the business expand by more than 300 locations.
Old Pasadena’s Dog Haus, which has 21 locations across the United States, signed a deal with American Development Partners, a Nashville, Tennessee-based construction company to construct more locations in 12 states over the next seven years, according to Nation’s Restaurant News.
“We feel we’ve brought in an unbelievable group of operators,” said Quasim Riaz, a founding partner of Dog Haus, to Nation’s Restaurant News. “We’ll have excellent real estate, and we can put our franchisees in the best place to succeed.”
The new restaurants will be built on purchased land suited for Dog Haus locations, and the capital for the real estate construction will be provided by an unnamed wealth management fund, according to Nation’s Restaurant News.
Under the terms of the deal, eight experienced franchise operators will run the restaurants, though more are expected to be added. Those identified so far include operators of other fast food brands, such as Taco John’s, Checkers, Rally’s and Church’s Chicken.
One of the operators who signed onto the deal is Shawn Eby, former vice president of operations for Taco John’s, who also has experience working on the franchisor side for Dairy Queen, Burger and Arby’s and other ADP-connected businesses.
According to Nation’s Restaurant News, Eby, who said he was the one who started the deal between ADP and Dog Haus after a visit to one of the chain’s restaurants in California, said he plans to open 100 units over the next five years in four states.
The deal will bring the Dog Haus brand to the markets of Alabama, Florida, Georgia, Kentucky, Louisiana, Maryland, Michigan, New York, Pennsylvania, Texas, Tennessee and Wyoming.
“With this agreement, the franchisees can come in with a very aggressive growth plan,” Riaz said to Nation’s Restaurant News. “The first year we’ll see something like 20 open, then the second year 30, then 40 to 45 in the fourth year, and then it will start tapering down.”
Dog Haus is known for its playfully-named gourmet hot dogs, sausages and burgers, as well as its soft-serve ice cream and craft beers. An example of a menu entree would be the “Pig Lebowski,” a polish kielbasa with slaw, barbecue sauce and fries.
The ADP deal will only include Dog Haus locations with a “biergarten,” which is a dedicated bar area or patio with a bartender that will serve beer, according to Nation’s Restaurant News. Currently, only four Dog Haus restaurants have biergartens.