Hot dog chain Wienerschnitzel may be pushing 40, but this old dog has a few new tricks.
The Newport Beach-based fast-food chain is teaming up with Utica, Mich.-based Tastee-Freez International Inc. to offer soft-serve ice cream and other desserts at its entire 303-unit regional chain as part of a dual-branding pact. Wienerschnitzel also plans to introduce a new bratwurst dog in October and is starting to sell food in 13 miniature golf and entertainment parks. By 2003, it aims to open 100 new restaurants.
The moves are part of an expansion plan launched about five years ago. Wienerschnitzel, which is owned by Galardi Group Inc., had sales of $170 million last year and expects to grow to $200 million in 2000.
The Tastee-Freez alliance offers Wienerschnitzel something it doesn’t have now,desserts such as soft-serve ice cream cones, blizzards and sundaes.
Wienerschnitzel, which has been testing the Tastee-Freez concept at 11 company-owned stores, has seen an increase in business in the late afternoons and evenings, said Dennis Tase, Wienerschnitzel’s president and chief operating of ficer.
“Sales have increased 5% to 7% at stores with Tastee-Freez,” he said.
Tastee-Freez is an added convenience for Wienerschnitzel consumers, said Tony Cherbak, an analyst at Deloitte & Touche LLC in Costa Mesa.
“It makes sense because they are adding the dessert component,” he said. “These fast-food customers are after a quick meal at a nice price; this way they can catch an ice cream on the way out.”
A lot of fast-food restaurants have tried the dual-branding concept, including Anaheim-based CKE Restaurants Inc.’s Carl’s Jr. and Green Burrito. The biggest success has been Tricon Global Restaurants Inc.’s joining of its Pizza Hut, Taco Bell and KFC brands, according to Ron Paul, president of Technomic Inc., a Chicago-based consulting firm that tracks restaurant trends.
“It seems to work best when they combine items that are complimentary,” Paul said. “A snack like Tastee-Freez and a sandwich go together well.”
New Challenge
But the challenge for Wienerschnitzel is to learn a new business, train employees and avoid confusing customers, analysts said.
In a separate deal, the hot dog chain has agreed to sell food at about a dozen entertainment centers operated by Irvine-based Palace Entertainment Inc. The parks feature go-karts, pitching diamonds, putting greens and video games. Wienerschnitzel hot dogs, which are made from company recipes, already are sold in more than a dozen sports arenas, including Edison International Field.
Wienerschnitzel, recognized for its nostalgic A-frame restaurants, reached its peak in 1972 with 450 stores in 20 states. The regional chain introduced hamburgers in 1975 and converted about a dozen stores to the Original Hamburger brand. Other Wienerschnitzel stores were sold during a remodeling phase that added seating in a move away from the drive-through-only concepts.
The company lost ground in the 1980s to hamburgers, chicken, pizza and Mexican fare. Still, the regional chain is top dog in its market: smaller chains such as World Links, Hot Dog on a Stick and Jody Maroni’s Sausage Kingdom operate primarily in malls, airports and food courts. Restaurant experts say the Wienerschnitzel chain is the “granddaddy” of them all.
Tase, who joined Wienerschnitzel in 1981 as marketing director, has been streamlining the business and increasing profitability since becoming president in 1986. He’s cut costs by reducing corporate staff from 87 people five years ago to 50 today, reducing food costs from 37% to 24% of sales, installing a computer system that sends orders directly to kitchens, developing a runner system to keep cars moving in the drive-through lanes and building smaller restaurants with more seating.
As a result, Tase said, the privately held company has doubled profits in the past four years. Same-store sales have increased for each of the past 48 months and are up 8% year-to-date through July, he said.
“We outrank all other chains in terms of same-store sales growth,” Tase said. “Sales have grown 28% for the past three years.”
Focus on Expansion
Tase said his focus now is on expanding operations in the West and Southwest in a bid to build enough stores to warrant more television advertising and building up the Wienerschnitzel brand. Targeted areas include Tucson, Ariz., where there are six stores and plans to build three more, and Dallas, which has 12 stores with another 15 planned for next year.
DGWB Advertising in Irvine, which created Wienerschnitzel’s animated hot dog character, the Delicious One, has developed a new advertising campaign that’s set to launch in October to promote the chain’s new bratwurst dogs.
The bratwurst dog is served with grilled onions and mustard on a regular bun. Sauerkraut is optional. The bratwurst dogs are set to sell for 99 cents initially and later for $1.49.
The Delicious One’s tagline is “America’s Most Wanted” hot dog, but in one of three new TV spots he embarks on a spy adventure in Germany. California Raisins creator Wil Vinton Studios of Portland, Ore.,whose latest work is seen on the TV comedy series “The PJs,” featuring Eddie Murphy,was tapped this year to enhance the 2-year-old hot dog character’s animated TV spots.
Latin Flavor
DGWB’s Spanish language division, Adelante, created spots for the Hispanic community.
“This is the first time we have created new stuff specifically for Spanish language,” said Jon Gothold, creative director for DGWB. “Sales are up and operators are saying we are getting Latino customers like they have never had before.”
Tom Amberger, Wienerschnitzel’s director of marketing, is charged with reinventing the chain’s brand. He oversaw the creation of the Delicious One character three years ago and the targeting of teens and younger consumers with online promotional contests launched this year.
Wienerschnitzel plans to celebrate its 40th anniversary next year by bringing back some of its past favorites such as the Weldon P. Wienerschnitzel hamburger topped with pineapple and guacamole. Another comeback will be the Big and Beefy hot dog served Chicago style with the works, including chili and cheese and the Big Foot extra-long hot dog, Amberger said.
“We are going to take a look back at things that were successful over the past 40 years and reintroduce those as a special offer on July 3, 2001, which happens to also be during National Hot Dog Month,” Amberger said.
One of the company’s online challenges is to overcome the “unhealthy” stigma associated with the hot dog, Tase said.
“For many years, Wienerschnitzel franchisees have had low self-esteem because people talk about the hot dog in a negative way,” Tase said.
“Tonight Show” host Jay Leno is one of those who often pokes fun at Wienerschnitzel’s quirky A-frame restaurants. But he also helps create awareness of the brand by airing clips from the chain’s chili tug-of-war competitions and its Wiener National dachshund races.
“Next year, we plan to hold more regional races and have them culminate for the big race here,” Amberger said. n
