Bruster’s Ice Cream franchise warms to idea of co-branding with Nathans Hot Dogs

After growing a successful franchise selling desserts, Bruster’s Real Ice Cream  is ready to serve up a full meal.Tim Schooley reports in the Pittsburgh Business Times, that the Bridgewater, PA, based ice cream chain recently began a strategy to co-brand its stores with The Nathan’s Famous Corp., the publicly traded New York-based hot dog chain known for its nationally televised Fourth of July hot dog-eating contests.

So far, six of Bruster’s 260 locations have become two-in-one Bruster’s/Nathan’s stores, including the region’s first in Dormont, said Dave Guido, vice president of concept development for Bruster’s. Two more area locations are slated for conversions, said Guido, estimating that 15 to 20 Bruster’s could operate jointly with Nathan’s by the end of the year.

While Bruster’s only began testing the co-branding strategy in February, and the Dormont location was the pilot store, Guido sees broad potential from early sales tallies, which he declined to disclose. “The results are going to tell the tale. But early on, we’re very, very happy with how it’s gone,” said Guido, adding the company is considering co-branding with other franchises, although he declined to name them.

“If we continue to get favorable results, it will be an option for everyone who is an existing store.”

Randy Watts, vice president of operations for Nathan’s, sees the co-branding franchising effort as a way for Nathan’s to reach new markets through Bruster’s territory, which extends throughout the eastern United States.

“It seemed like a natural synergy for the two brands to use their real estate a little better,” Watts said. “We’re the No. 1-selling all-beef premium hot dog in the world. We definitely think they have a real top-quality ice cream brand.”

Co-branding is nothing new for Nathan’s, which also owns Kenny Rogers Roasters. Nathan’s also operates joint locations with Subway in Wal-Mart locations, Sbarro and Pizza Hut, among others.

Bruster’s began considering teaming with Nathan’s because it wanted a daytime component to add to its made-from-scratch ice cream, which sells better at night.

Adding Nathan’s to established Bruster’s locations has not been complicated.

Besides adding a fryer and a few other pieces of cooking equipment, as well as new signage, Bruster’s expanded its menu to include hot dogs, french fries, chicken tenders and lemonade.

Co-branding in franchising is an increasingly popular formula employed by such companies as Yum! Brands, which often operates its Pizza Hut, Taco Bell and KFC restaurants out of single locations.

“The advantage is you save money in management and personnel,” said Gary Garda, principal of Downtown-based TLC Brokers/Garda Realty, and formerly an area supervisor for Pizza Hut.

“With Yum! Brands, you have one manager managing three concepts in one location.”

Garda also said rising real estate costs made it increasingly difficult for a fast-food chain to exist on a single-menu item alone.

Cross Posted at: Let’s Talk Franchising

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