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494. Restaurant Growth Strategies: How to Grow Sales Without Lowering Prices - Mike Montagano,

Restaurant Rockstars Podcast · 2026-06-27 · 34 min

0:00--:--

Key moments - from our scoring

Substance score

53 / 100

Five dimensions, 20 points each

Insight Density11 / 20
Originality9 / 20
Guest Caliber13 / 20
Specificity & Evidence13 / 20
Conversational Craft7 / 20

Doghouse has built a profitable growth engine by refusing to compete on price, instead leveraging brand experience, celebrity partnerships, and operational efficiency. CEO Michael Montagano explains how the company secured Jake Paul as both franchisee and board member - generating over a billion impressions in the first week - while maintaining a disciplined approach to unit economics. The 2,000-2,500 square foot footprint with a full bar creates a Buffalo Wild Wings-like experience at lower capital and labor costs, allowing Doghouse to keep AUVs climbing toward $2 million without relying on discount promotions. Key differentiators include a loyalty platform driving 10% of traffic, a 20% alcohol sales mix anchored by craft beers and nostalgic beverages (dirty sodas, non-alcoholic options), breakfast day-part innovation from COVID pivots, and a chef-driven product philosophy (hormone-free, antibiotic-free proteins, nitrate-free hot dogs) that drives continuous menu innovation. The brand appeals to Gen Z through nostalgia and localization while maintaining multi-generational appeal, with 24 taps giving franchisees control over local brewery selection. Montagano emphasizes how tight footprints and strong bar revenue reduce labor intensity compared to traditional sports bars.

Key takeaways

  • →Doghouse maintains alcohol sales at 20% of revenue across growth by embracing non-alcoholic alternatives (dirty sodas, non-alcoholic beer) rather than competing on price.
  • →The company's 2,000-2,500 square foot footprint with full bar model requires significantly fewer labor hours and lower build costs than traditional 5,000-10,000 sf sports bars while delivering similar experience.
  • →Jake Paul's board-level partnership and billion impressions in week one demonstrates that celebrity influencer value lies in collaborative strategy and ongoing activations, not just social reach.
  • →Breakfast day-part innovation (born from COVID survival) uses existing kitchen labor during prep periods for incremental pickup/delivery orders, smoothing throughput across day parts.
  • →Loyalty platform enrollment and first-party app traffic (10% of volume) enables margin-protecting customer retention strategies without racing to the bottom on deals.

In this episode

  1. 1Introduction to Doghouse: 50+ Locations and Sustainable Growth Model
  2. 2Jake Paul Partnership: Celebrity Influencer Strategy and Brand Awareness
  3. 3Staying Relevant: Loyalty Programs and Customer Experience Over Price Competition
  4. 4Bar Business as Differentiator: 20% of Sales with Full Liquor Program
  5. 5Appealing to Gen Z: Nostalgia, Localization, and Beverage Innovation
  6. 6Labor Model and Compact Footprint: 2,000-2,500 Square Feet with Full Bar
  7. 7Chef-Driven Menu Innovation: Quality Proteins and Cost of Goods Optimization

Mentioned

DoghouseJake PaulMike TysonBuffalo Wild WingsTaco BellGoogleOwner.comSmithfield SelectMichael MontaganoHaga GossianNFL Sunday Ticket

Guests

Mike Montagano

Topics in this episode

Cost of Goods Sold reductionDoghouse (hot dog and burger concept)Jake Paul (franchisee and board member)Loyalty platform and first-party appCraft beer and local brewery partnershipsDirty sodas and non-alcoholic beveragesBuffalo Wild Wings (operational comparison)Gen Z marketing and nostalgia strategyTaco Bell (marketing analog)Breakfast burrito day-part innovation

Questions this episode answers

How much of Doghouse sales come from the bar and alcohol program?

Alcohol and bar sales represent 20% of total sales and have maintained that percentage even as overall revenue has grown from $1.6M to approaching $2M AUVs.

What is Jake Paul's role at Doghouse and how much did his involvement boost awareness?

Jake Paul is a franchisee, board member, and active collaborator on marketing and positioning. The partnership generated over one billion impressions in the first seven days.

How does Doghouse appeal to Gen Z while leaning into nostalgia?

Gen Z consumers are actually driving nostalgia trends, as evidenced by Taco Bell's success; Doghouse appeals to them through social media, menu innovation, non-alcoholic beverages, and localized partnerships with regional breweries rather than relying on national chains.

What are the key operational advantages of Doghouse's smaller footprint model?

The 2,000-2,500 square foot stores with full bars reduce fixed occupancy costs, build costs, and labor requirements compared to traditional 5,000-10,000 sf sports bars while maintaining high capacity utilization when events draw crowds.

How did Doghouse innovate its menu without sacrificing quality?

The founding culinary partner Haga Gossian collaborates with national chefs and LTO influencers on continuous innovation while staying true to hormone-free, antibiotic-free, responsibly raised, nitrate-free proteins; the team reduced cost of goods sold by five points by eliminating 25 SKUs without sacrificing protein quality.

What our scoring noted

Our reviewer’s read on each dimension, with quotes from the episode.

Insight Density

11 / 20

The episode contains a handful of genuinely useful operational data points - SKU rationalisation to pull five COGS points, maintaining 20% bar-sales share, day-part layering from a COVID pivot - but large portions are brand narrative, promotional positioning, and platitudes that dilute the density.

we're able to take five points out of the business and we did that by eliminating 25 SKUs all without sacrificing the protein quality, the innovation, the core menu offering
our LTO sales are up 60%

Originality

9 / 20

There are a few non-obvious angles - framing price-taking as laziness relative to supply-chain work, a closed-LLM franchisee portal, and sustaining bar sales by pivoting to dirty sodas and NA beer - but most of the episode recycles familiar restaurant-growth talking points about loyalty, influencers, and experience.

taking price often is not always but sometimes a lazy person's approach to profitability. You know, the hard work happens in the supply chain and labor management
we have layered on an LLM on top of that so that our franchisees in a closed network

Guest Caliber

13 / 20

Montagano is a working CEO with verifiable operational metrics at a 50-plus-location franchise system, giving him genuine practitioner credibility; however, he is primarily a growth/investor profile rather than a deep multi-decade restaurant operator, and the episode skews promotional.

When I joined the company, our AUVs were about 1.6. Our kind of first push as a brand through that first year was really continuing to fine tune our core fundamentals... We've been able to take that AUV up closer to 1.9
we have almost effectively sold out the country on a new innovative way of franchising where we have brought in a litany of the world's greatest operators from a, from multi unit, multi brand operators and actually cut them into the business

Specificity & Evidence

13 / 20

The guest provides a solid number of concrete figures - AUVs, bar-sales percentage, SKU count, COGS points removed, LTO sales lift, impression count, footprint size, and seat counts - giving the episode above-average evidential grounding for a mid-market restaurant podcast.

in the first seven days of the partnership we had over a billion impressions
we sit around a capacity of about 100. In, in one of our stores you're sitting in, you have about 15 bar seats, you know, about 25 additional seats within the, the, uh, the dining room

Conversational Craft

7 / 20

The host introduces topical pivots (alcohol decline trends, throughput, KPIs) that produce some useful disclosure, but questions are consistently soft and leading, and no claim - celebrity ROI beyond impressions, the franchisee profitability model, or same-store sales specifics - is ever challenged or interrogated further.

Michael, it's been a super pleasure having you on the show. What a dynamic concept.
How about technology using AI at all?

Conversation analysis

Computed from the transcript - who did the talking, and the words that came up most.

Share of words spoken

  • Speaker B79%
  • Speaker A21%

Most-used words

brand36customers21experience19back17store17restaurant16team16marketing16menu15part15stores15sales13continue13costs12stay11true11

Episode notes

If you're looking for restaurant growth strategies that increase sales without relying on constant discounts, this episode is for you. Roger sits down with Dog Haus CEO Mike Montagano to discuss how one of the industry's fastest-growing brands is building customer loyalty, protecting margins, and growing sales through memorable guest experiences, smart marketing, AI, menu innovation, and operational excellence. In this episode, you'll learn: • Why competing on price is a losing strategy • How loyalty programs drive repeat business • Restaurant marketing ideas that keep your brand relevant • How AI is improving restaurant operations • Why a strong bar program can become a major profit center • Menu engineering strategies that improve profitability • The KPIs every restaurant owner should monitor • How to create an experience that keeps guests coming back Whether you operate a single independent restaurant or a growing restaurant group, you'll walk away with practical ideas you can implement immediately to grow sales and protect your profits. Take the FREE Restaurant Menu Makeover Challenge!

Full transcript

34 min

Transcribed and scored by The B2B Podcast Index.

Speaker A: What if I told you a hot dog concept is outperforming much of the restaurant industry by refusing to race to the bottom on price? By leveraging celebrity influencers, building a bar business that drives 20% of sales and creating cult like customer loyalty. Today I sit down with Michael, the CEO of Doghouse, a fast growing brand with more than 50 locations that's rewriting the rules of restaurant growth. We dive into how they're using influencer partnerships, loyalty programs, AI menu innovation and and a unique guest experience to boost sales, protect margins, attract talent and stay relevant in a rapidly changing marketplace. If you're looking for practical strategies to grow your restaurant profitably, don't miss this conversation. Stay tuned. Michael, how are you today? Glad to have you on the show.

Speaker B: Thanks Roger. It's great to be here. Thanks for having me.

Speaker A: Well, you've got a really dynamic concept and brand with 50 plus locations and after 15 years it's like. What would you consider to be the biggest game changers to the success of, of the Doghouse?

Speaker B: You know, I think back to why I was attracted to the brand close to five years ago, first joining as an investor board member and then now ultimately the CEO and uh, member of the board. And I think about kind of a business or a restaurant similar to a tree. My dad used to always say this, that a business should grow up at the same pace that it grows down, kind of like a tree does with its roots that can sustain, you know, any storms or macroeconomic conditions in the case of a business that may lie in front of us. And I think about what we're facing as a restaurant industry, whether it's GOP1s increasing input costs, et cetera. And what is so amazing about Doghouse, and I believe it's game changer that has developed over 15 years, is that it's been very incremental in its growth over time to where the roots have outpaced the size of the tree by probably a fold of 10 times. And as a growth guy like me, what was so exciting is to be able to take that amazing infrastructure that our founders have built and our management team that's been here for 10 plus years each and be able to really accelerate the growth of the brand. And so that's what I've been laser focused on over the last two and a half years now. Would love to walk you through our plan and more specifics on what's changing the game for us and how we believe we're disrupting the franchise industry as we all know.

Speaker A: How about disrupting I mean, interestingly, Jake Paul is a franchisee and a board member. Now Jake Paul needs no introduction, but he certainly disrupted the fighting world first with his fight against Mike Tyson again and God, the notoriety and the acclaim and what a dynamic personality. Is he driving any sort of brand awareness as well himself?

Speaker B: Absolutely. You know, when we thought through the partnership with Jake, obviously we're an edgier brand. You know, it's part of our culture that you walk into our stores, there's signs that say we love wieners and, and the, and the seats say hot buns. And so we've never been afraid to be who we are. And I think it's really resonated with our customers over our time. And what attracted us to Jake was, was one, obviously he has an insanely loud megaphone, uh, you know, one of the pioneers of social media influencing with his early days as a child on YouTube and has just adapted and evolved over time and now into the sport of boxing as you point out. And so it was yes, about that megaphone that Jake brings to us, but we wanted the partnership to be richer and you know, obviously he joined as a franchisee, he's joined as a member of the board, he's very active on how we position ourselves, how we market, et cetera. It was really his brain plus his megaphone that made the partnership so interesting to us. And I'll tell you, in the first seven days of the partnership we had over a billion impressions and that has only continued to grow whether it was being on the front cover of Franchise Times, whether it's his ongoing engagement and showing up at store openings and being involved, and a really cross platform dynamic marketing approach that goes all the way from obviously social and influencing to paid media and advertising, to in store activations through outside activations, to menu collaborations, to kind of across the entire gamut. It was important for us in bringing in a partner, was a true partner and could collaborate with us across the board and definitely has hit a home run for us. And I think our internal team, credit to them as well. You know, our marketing team and our CMO have done absolutely fantastic job in cultivating that and integrating it into our, our, our brand. And it's been a huge win for us and definitely part of our, you know, we have a four point plan which I'm happy to walk you through, but that's part two and becoming a national brand. It's tough as a mid market restaurant brand, you know, to be able to get that kind of awareness nationally, to continue to grow and expand yeah, it's

Speaker A: really hard to compete with that. Not everyone has a celebrity that is part of the brand themselves. So I'm really glad you told us about that. But you know, what speaks to, and I hate using cliches out of the box comes to mind. But you know, being resourceful, being creative, being dynamic and really sort of standing apart and being a bit irreverent like you said, you know, some of your marketing and your catchy hooks are irreverent. And I also noticed that the menu item names themselves are catchy. So all these things, they draw attention, don't they?

Speaker B: They 100% do. And a lot of those things predated Jake and a lot of those things are about how to integrate with him and, and, and continue to evolve our brand to be relevant. I think that word is so important in the restaurant industry and even more so amongst mid market restaurant brands is how do you break through and be relevant? It may not always be how do you race to the bottom on price? How do you uh, you know we obviously offer a lot of value but it may not be giving away food and value meals. It may be about how are we relevant both in how we market ourselves, but how are we relevant when our, when our customers come in that they have an amazing experience. We believe that is going to be the true differentiator going forward as maybe dining occasions go down with GOP ones. But we think it's about the fabric of our community has always been about breaking bread and that experience that people are having. And we think a brand like ours that really focuses on what's that in store experience. Not, not just getting your food on time and hot food is hot and cold food is cold. Obviously critical, but what does that feeling that people get, what is that warmth when they come in. And obviously you know we. With TVs and TV walls and the games on and a full service bar and dynamic bartenders. You know we aim to be that spot where you want to go with the boys after work. You also want to bring your kids after the soccer game and you want to. It's also a spot to come with the family on a uh, on a lazy Saturday afternoon or, or, or watch NFL Sunday ticket on, on Sunday throughout the day. And it's that dynamic experience that we really lead into and the way we market ourselves is just to create awareness to what they're going to experience within the store.

Speaker A: Staying relevant is about nurturing and developing your raving fans, keeping them coming back for more while finding new guests all the time. Are you finding that balance?

Speaker B: We a hundred percent are. And I think that has been a differentiator of the brand, but it's also been what's powered some really impressive same store sales growth for our brand during really tough times in the industry over the last couple years. One is obviously your customers are king. We nurture our existing customers. One of my first initiatives was rolling out a loyalty platform for the brand. I know it sounds a little archaic, but it makes such a difference. We now drive about 10% of our traffic through first party with our application, both pickup and delivery, and then have a lion's share of our customers on our loyalty platform. And it may not be about always racing to the bottom on value deals, but it's about treating your best customers best, you know, and so it's happy hours throughout, happy hours at the bar. Unique things for our, uh, most loyal customers to keep bringing them back. Then on, um, the fact of being able to attract new customers, well, things like Jake and otherwise certainly help that, you know, your, your, your megaphone is loud and we're able to attract new people in. But really key to the business is that when they come in that that experience is perfect and that they want to come back. Acquisition cost is only expensive if they don't come back two and three and four times. And so you got to make sure that that funnel is not porous and you're retaining your very best customers.

Speaker A: I find it really interesting that you have a beer garden and a full liquor program in what many people would consider all American burgers and dogs and brats and all that kind of stuff. That to me is a hook. So it's obviously working as a draw. But are you finding, you know, there's, there's so much talk on the street that alcohol sales are declining. They've been declining for a while. Are you finding that to be true or people come in and they want a brew, they want a cocktail. You've got signature cocktails too. I mean, it's a really cool program you've established.

Speaker B: Yeah, well, thank you for that. Uh, yeah. You know, alcohol makes up 20% of sales. It's continued to make up 20% of sales even as sales has continued to grow. When I joined the company, our AUVs were about 1.6. Our kind of first push as a brand through that first year was really continuing to fine tune our core fundamentals, take a step back and work really on the core of the business. We've been able to take that AUV up closer to 1.9. We anticipate Cross Crossing $2 million shortly. A lot of those were about activating the experience. Some are, you know, tertiary items like catering and loyalty and so forth. But throughout that entire process, our alcohol sales, or we call bar sales, you know, have, have stayed very, very true to that 20% marker. And part of it is our brand's ability to continue to stay relevant. That means embracing a mocktail program. It means being some of the first to embrace non alcoholic beer. It also means that we have completely transformed our soda program. We've seen soda continue to pull back around the country. We've transformed it. We're not going to the two major players. We're going through to more of a, what we call a nostalgic feel and embracing dirty sodas. And so I think we think about that bar program more holistically that yes, there'll be trends and maybe a trend now we're seeing some alcohol consumption pullback, particularly among the Gen Z audience. But how do we appeal to them, particularly with, you know, obviously great outreach to Gen Zs on social media? How do we engage them in our store and create that same warm experience with other alternative beverages? So no, we've continued to see the bar sales perform very, very well and we anticipate it continuing to go up well into the future.

Speaker A: So you mentioned nostalgia and there's a sort of reference there to kind of pop culture and what people remember from days gone by. Yet, uh, you're also talking about attracting Gen. How do you find that balance? I mean, do they get it, do they get this sort of nostalgia stuff that perhaps uh, another generation appreciates that they don't quite get or do they get it?

Speaker B: Yeah, look, and this is, you know, a little bit of the outside looking in. I, I wish I was still a Gen Z, but I'm not. But I, I'll tell you, from what we've seen and obviously, you know, we spend, you know, a lot of time talking to our partners. It's the great part about having influencers so closely tied to the brand is we're getting kind of direct feedback and we're able to make our brand relevant, have amazing people here on the marketing team that are both in and out of that generation that, that, that obviously study it very, very closely. And what, what, what we're seeing and what I've seen is that Gen Z's are actually driving this, that that kind of nostalgia feel is very attractive to them. And it's not the old dogs that are bringing it back because they want to listen to the music or they want to, you know, engage with the beverages. It's actually their feel. I think there's been some great brands that were on the early stage of capturing that. Taco Bell is one of them. And, and, and so we see that as, you know, a very interesting analog, at least on the marketing side, on how they have appealed to a much broader audience with a, uh, with a quite legacy brand. And they've embraced kind of their history. And that's something that we're really excited to do. We've been doing it slowly and incrementally and, and then, you know, part of it is localization. I think it is nostalgia, but it's also how do we appeal to the local culture? How are we that local watering hole where people want to come and hang out and feel warm? And part of that is how we structure our menu and our brand. You know, we have 24 beers on tap. We have, we, we mandate very few of those. Seven of those are nationally mandated brands. We work with our franchise partners on choosing local options so that, you know, they're, they're getting that local brewery feel and then expanding to things like cold brew and other things that are more dynamic and attract a broader audience that only we can do because we have this entire infrastructure built in all of our stores. So I think it's partly nostalgia, it's partly localization, and that's what we feel has been the secret to success in navigating, you know, the last several years.

Speaker A: Is your team made up of Gen Z? Do you have a large percentage of younger people that are working in your locations?

Speaker B: You know, ours is a balance. You know, obviously in our stores there's, there's lots of Gen Z people that work, you know, at the store level. Also we have a nice mix of, you know, kind of your historic experience with a lot of new energy within, within corporate. Obviously, there's no litmus test to come work here other than just a passion for the brand and a passion for the customer and a passion for the franchisee. But, you know, we've, we've focused on building, you know, a diverse group of people in thought and mind that can come in and, and really figure out how to appeal to a broad set of customers. You know, we also have a lot of our customers are, are, are not from that generation. We want to continue to bring them back and appeal to them. So I think it's always a balance in marketing between being cutting edge and the block and tackling on, on, uh, just being a great restaurant brand. And doing right by your by your customers and your franchisees.

Speaker A: You're touching a big part of the country and you do have a lot of locations and you're continuing to grow and you're growing international as well. Are any of the stores experiencing labor challenges still because so many restaurants are, or is there something so appealing about the brand that naturally attracts great people? The number one way to grow your restaurant in 2026 is Google search. 70% of diners searching for a place to eat start on Google. If your restaurant isn't showing up when customers search for your cuisine, you're invisible. Google uses more than 90 ranking factors and SEO changes constantly. Big restaurant brands spend millions staying on top of this. Independent operators simply don't have the time or the budget. Owner.com is the solution. Owner.com helps restaurants get discovered by more customers and increase both direct online orders and repeat business with loyalty, email, SMS and push marketing. For more visibility, more repeat business and more direct sales, visit owner.comrockstars Ask any chef what makes a great BLT and watch how fast they start talking about the bacon. Well, that's why there's Smithfield Select. It's premium ready to cook bacon that will elevate your menu and your bottom line because there are menu items and then there are menu magnets. That's Smithfield select bacon. It pleases patrons while saving you time, labor and back of house costs. It's thick cut, crispy and golden brown with a texture and appearance that make it seem freshly cooked from raw. But you could just heat and serve. Funny thing about bacon guests notice to order yours, visit Smithfield select.com yeah look,

Speaker B: I think you know, the experience you offer your guest is so important and the people on the front lines of doing that are team members at the store level. And so being able to integrate and evangelize our culture is so important with our team members. We've been blessed to have so many great team members across the country. Over a thousand people every day put on a doghouse shirt and go to work and, and we're so thankful and appreciative of all the hard work that they do. I will tell you that, you know, part of what makes the doghouse model so special is that we are, you know, I don't want to say the word we're a hack on a model because we have our own unique model. But if you think about we're a smaller footprint version of like a Buffalo Wild wings where we don't have to build a 5,000 to 10,000 square foot box that costs millions and millions of dollars. We like our tight footprint, 2,000 to 2,500 square foot and always full bar. And we can emulate that same experience in a smaller, more compact, what we would consider homier, warmer feel. And a consequence of that is not only lighter fixed occupancy costs because we have less square feet or lighter build costs, but also it takes less people to manage the store. Our uh, bartender is the heart and soul of that store and so their air traffic can control. And you're able to do that when your bar makes up about a third of your front of house. You know, so like, you know, it is a tighter footprint. And so our labor model is also materially leaner. So why we're, why we think we have world class team. We also get to have a much smaller one than the average restaurant and are just more thoughtful about the unit economics for our franchisees.

Speaker A: That's really smart. How many seats are a typical location, including at the bar?

Speaker B: Yeah, so they range. We kind of tap out at a capacity. You know, in our, uh, restaurants we like to talk about it more on the capacity side because you know, when the game's on and people are hard rooting and there's two, three deep at the bar and so forth, but we sit around a capacity of about 100. In, in one of our stores you're sitting in, you have about 15 bar seats, you know, about 25 additional seats within the, the, uh, the dining room. But you know, if there's, if you're in Roseville, California and the 49ers game is on, you better believe you're right up to that fire marshal code and, and, and packed in there and having an awesome time. We're also blessed to have terraces. So the, the beer garden is that we, we really lean into our outdoor space and you may say, well that's because you're a California based brand. Yes, our 20 stores in California have big terraces. We get to use them all year round. But they're a pinnacle of driving customer engagement and value from Chicago to Maryland to D.C. even in climates that maybe you get a more limited use of it. But from Texas, Arizona, California, etc. You know, it allows us to really expand the capacity of our stores. And so that allows us to have a little bit more breathing room beyond that kind of in store capacity and overall seating.

Speaker A: You know what comes to mind? Sports bars, the 49ers, whatever the sport happens to be, you, uh, fill the place. But is that causing any challenges with, throughput and table turns none.

Speaker B: You know, I think that what happens in some of those times is that it is a, it is definitely a heavy, heavier beverage crowd and so it generally doesn't impact the kitchen. And we're really fortunate to have our volume spread out across three day parts. So we don't see these bottlenecks as much maybe in the evening as some other stores would ultimately see. We have a breakfast day part which interestingly enough came out of a COVID 19 innovation. As you know, bars pulled back, it was more of a survival move and we opened up these breakfast burritos that have become a cult following for the brand. And the coolest part about them, our stores open anywhere between 8 to 10. It's franchisee discretion in the mornings. But the, the uh, interesting thing is that was always a prep period anyways for lunch. So the labor was already in the kitchen. And these are all incremental orders that are coming in and leads to a really smooth throughput. There's less of a dining occasion in store dining occasion during that breakfast day, it's mostly pickup and delivery. So you can staff front of house super lean, you already have your back of house there and, and leads to a really smooth labor transition from day part to day part. And then as we get into the evening, you see the day part transition to more beverage, less food. And so everything seems to be right now a ah, cohesive unit. Obviously we think there's more capacity in our storage is why we want to continue to take those AUVs up. But we feel real comfortable with the way throughput works right, right now throughout our system.

Speaker A: So you've got chef driven menu and we're talking burgers and dogs and relatively simple foods. Yet it's sort of creative in a way. And my mind is turning of, you know, how often are you innovating, changing the menu, you're doing ltos, all that kind of stuff. Tell us about the chef and what he's adding to the doghouse brand himself.

Speaker B: Yeah, I'll tell you what, we are so blessed that from day one we have had the same founding partner that has spearheaded and owned the product. And our product continues to be our biggest differentiator in the market. Haga, uh, here Gossian, um, handles all of that. He also collaborates from day one with amazing national chefs as well as great LTO influencers. And so it's a 15 year old brand that constantly is innovating and, and you know, a lot of that is the strategy that's taken by the Culinary team. The so there are a couple points I'd love to hit on. One is that we've stayed while we continue to innovate, we've stayed extraordinarily true to our core principles, which is hormone free, antibiotic free, responsibly raised meats. We have our own blend of hot dogs that we produce as well as our own blend of sausages. All those are nitrate free. Our chicken is obviously world class as well. So that protein quality is what we're known for and at no point are we open to sacrificing on that. So we stay true to those kind of quality elements of our brand but continue to innovate on it. And I think that speaks through kind of these chef driven aspects of the menu. The second thing is that just because we stay true to those proteins doesn't mean we're constantly trying to improve cost of goods sold with input costs rising. And I think what's really interesting about our team is that you can continue to be cutting edge in quality and innovation, but continue to drive down costs of goods sold. Like this year for example, one of our main initiatives was to last year technically was to, was to rein in the cost of goods sold. We're able to take five points out of the business and we did that by eliminating 25 SKUs all without sacrificing the protein quality, the innovation, the core menu offering. And so we're constantly looking at ways to tweak the supply chain and to make it work better for our franchisees. And then lastly, I'll leave you with, with this is obviously a topic I'm passionate about but we also last year transitioned our LTOs to a partnership with, with a uh, food influencer, Josh Elkin. So it's not just Jake that's out there speaking about the, the brand, we're also doing it on the food influencing side. And Josh collaborated with Hog up and team on coming up with a series of LTOs throughout the UH year and then he took the lead on promoting that in tandem with our marketing team and our LTO sales are up 60%. So you know, one, it was, it was about, you know, how do we take those trends? Kind of what you were talking about. How do you know what gen ZS1? How do you know what is on the cutting edges? Because we're bringing in excellent people to help advise us on it and then collaborate with us on what that menu is and then ultimately promote it. And it worked famously. And so uh, culinary is in our blood is obviously something we're all passionate about, even those that, that, uh, you know, that, that, that aren't spending as much time, you know, behind the grill.

Speaker A: So synergy there, for sure, you're doing a lot of right stuff and the influencers and bringing in those people and staying relevant. All this is really powerful. And it's brand building and it's marketing and you're doing a great job. You know, value, uh, came up a moment ago, but I think I heard you said that you're maintaining margins are not really shrinking because a lot of restaurants are challenged with obviously maintaining value to the guests without continuing to raise prices while their costs keep going up. Where does Dog House stand in that realm?

Speaker B: Look, I think that there's two important points here that we continue to stay, you know, very disciplined about. One is we have not taken much price over the last couple years at all. You know, we want to stay true to kind of what our customers know and love. And that falls under that, that, that same umbrella of bringing back our most loyal customers. They're the heart and soul of the brand. Hm. But at the same time, a lot of brands have raced to the bottom on these value wars, whether it's value meals, et cetera, and putting loss leaders in place. We've also stayed completely clear of that in that we feel like that devalues the brand and that we're not afraid to charge if we're delivering the highest quality proteins, new menu innovations, a great experience, the greatest beers around the country, and that we're proud of the product that we're putting forward. And we don't want to take away from that. We want to signal to our customers that we produce, uh, a quality product and we're proud of that and we're appreciative of them. That doesn't mean that we want to gouge them or take a whole bunch of price. It's why we, you know, our strategy is don't take price, but also don't race to the bottom on loss leaders and stay more disciplined and ride out this, this kind of what we would consider to be interim storm. And it worked. Sales are up year over year and so, and, and staying true to that kind of underlying principle. It also doesn't mean that we don't offer some promos from time to time, as we said, our most loyal customers, we want to reward them. And for being loyal, we want to, you know, offer them great opportunities to come into the store, including, including loyalty, member happy hours and, and so forth. So we're still on the cutting edge of, uh, of, of, of that, but very principled about our pricing and, and, and our relationship with our customers.

Speaker A: Um, I'm guessing you have a CFO that reports to you, but what are some of the financial KPIs that your stores have to stay on top of and what direction do you provide to them?

Speaker B: Yeah, so there's a couple things. You know, one is we pay super close attention to the error rates coming out of our stores. We use software to track this, both 3 PD as well as in store. And we want to make sure that the guests food, when they order it, is coming out on time. So we track fire times very, very closely. We track error rates very, very closely. We track refund rates very, very closely. And all of these kind of metrics around ensuring that the guest experience is fantastic. We're so proud of our product. And so we want that product to be enjoyed exactly the way that it was designed to be enjoyed. And we know if they can enjoy it the way it was designed to be enjoyed in the experience that it was designed for the customer to have, they will come back over and over and over and over again. Because we believe we have architected something that is tried and true. Now 15 years old and only getting better and improving. So we look at a lot of those kitchen efficiency metrics in the product that we're ultimately delivering. We also do secret shopper. We also do steritek. We do a lot of different things in the stores to make sure that customer experience, not just the food experience, but the customer experience and the hospitality is top notch. And obviously we take a lot of pride in the cleanliness of our stores and food, uh, safety. And so we continue to be on, on the, on the weeding edge there as well. And then, you know, we're looking at, you know, other metrics that we think are equally as important, which is the amount of volume that's going into the store, where that volume is coming from, third party versus first party versus in store. They're very different profit profiles amongst those three channels. And making sure that we're using our marketing dollars wisely, both local area marketing and national marketing, to drive the right volume into the stores, et cetera, to kind of maximize profitability. And then we're looking, you know, very closely at cost of goods sold, new software that we've, that we're implementing to, to track it extraordinarily tightly on both inventory management and just to make sure that we're hitting our theoretical costs and, and we can continue to, you know, keep solid operating margins for our franchisees around the country. So kind of wide array that, that lead into our larger scorecard. But, but you know, we're at the end of the day we just want to, you know, at a franchisor level just ensure the health of each one of our stores and our franchisees and then the experience of our customers to the extent that we ultimately can, you

Speaker A: know, if your menus are regularly costed out to make sure your profitability is where you want it to be.

Speaker B: Oh, this is something that we hammer. So you know, we've got, you know, to the most granular level, you know, the theoretical costs and then working with our supply chain team to ensure that we can always get better and smarter and then making sure we're pricing accordingly so that, you know, we're always pulling forward those things. Like I said, we don't take a lot of price but we want to make sure that menu item is narrowly tailored to produce that, that, that, that level of, of earnings that we expect. So yeah, we take a scalpel to that and are constantly looking at it over and over and over and over again. It's a, it's a never ending process. It's like, I think like, you know, they say, you know, painting the Golden Gate Bridge, once they start, they start back again. And so that's, that's kind of how we look at making sure that we are just laser focused on, on that food cost. And that's ultimately what, what led to the idea of, you know, maybe there's some lesser performing items on the menu, Maybe there's some SKUs that can be replaced with other things without sacrificing taste or quality and really impact, you know, bringing down those costs. We don't, we don't have to go take price to our customers because we're getting, you know, we're so attuned to our own house. I think taking price often is not always but sometimes a lazy person's approach to profitability. You know, the hard work happens in the supply chain and labor management and kind of the overall ecosystem of the brand.

Speaker A: Awesome. Fantastic. How about technology using AI at all?

Speaker B: We, we use AI every single day. You know, I use it personally, I think, you know, we're using it both administrative tasks on, on things from finance and accounting to leveraging it for marketing and messaging and design. Uh, we're leveraging it with how we analyze our own data. I'd say, you know, more, more leverage is there on how we're looking at all the data that's coming into the brand. How we're taking the data out of Toast and parsing up in ways to try to find, you know, where that gold vein may exist that we weren't able to see it in the, in the past. More from a product standpoint. We have something called My House Portal, which is a portal where our franchisees log in and it's, it's the playbook, so to speak, of everything from recipes to how to videos to marketing to, you know, development to kind of the whole spectrum of what it takes to, you know, successfully run a store. In our system. We have layered on an LLM on top of that so that our franchisees in a closed network not, you know, how do you build a cowboy dog on, on, on chatgpt that could send you a whole bunch of different things back, you know, maybe an actual dog dressed like a cowboy. But you know, in, in, in our closed LLM universe of the My House Portal, it can, it is a conversation that they can have with this litany of data that's been developed over time to not only give quick answers, but to help train better and to give on the fly resources to our staff on the ground. If a question comes up, they don't have to guess, you know, it's all right there at their fingertips through an application of being able to get real time information that is, that is exactly the way that we want them to get it through a closed universe LLM. So, um, yeah, we're, we're more forward. We're not a tech company. I don't perform, you know, you know, we're not sweet green, you know, pretending to be a tech, uh, company. But, but, but we a hundred percent are a company that is forward thinking and embracing tech at every single stage.

Speaker A: Fantastic. Michael, it's been a super pleasure having you on the show. What a dynamic concept. You talked so much about all the different competitive advantages, staying relevant, the marketing, the hooks, the bar program. It's like everything about what you're doing has multiple appeals to a wide range of guests. So I think you've offered uh, our audience a lot of value, a lot of key nuggets of operational wisdom there. Hard one, of course. So thanks for being on the show.

Speaker B: Well, I really appreciate that, Roger. And one thing I'd love to get back on and talk to you about at some point is we have almost effectively sold out the country on a new innovative way of franchising where we have brought in a uh, litany of the world's greatest operators from a, from multi unit, multi brand operators and actually cut them into the business. So we're aligning franchisor and franchisee for the first time where if we win, they win and if they win, we win. There's no more us and them. Um, it's one team marching forward together. So we're thrilled about that and, and thank you for having me on and all the topics that we covered. And most importantly, I'm a big fan of the pod. So it's one of those moments where you actually get to come on and contribute to all the great content that you've produced over time and true, uh, honor to do that. Thank you very much and thank you for you do for the industry as, as well. We're all fans.

Speaker A: Oh, wow. Well, thanks so much for the kind words. You know, one aspect of a really successful franchise operation is systems. And you clearly have your systems dialed. So kudos to you for that. Was the Restaurant Rock Stars podcast. Thank you audience for tuning in. Can't wait to see you in the next episode. Thank you to our sponsors this week. Stay well, stay tuned and I'll see you next time. And that's a wrap. Restaurant owners and general managers, listen up. Your biggest challenges are labor and shrinking margins. Both kill your profit. I help restaurants find and fix those leaks. Last year I uncovered over $300,000 in lost profit in two independent restaurants and $885,000 in a five location pizza chain. I specialize in controlling costs to maximize profit, training managers to become leaders, training front of house staff to sell, and marketing that drives trackable new and repeat business. If you want more profit, less hours and a dream team staffing your restaurant, book a free 30 minute profit strategy session with me. Email rogerestro restaurantrockstars. Com That's R O G e r@ah restaurantrockstars.com.

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