Article

Philly Pretzel Factory expands into non-traditional locations

A QSR can work in a nontraditional venue. Here's one CEO who was willing to take the unknown path.

A Philly Pretzel Factory store located inside a Shop Rite grocery store in Philadelphia.

March 18, 2016 by Travis Wagoner — Editor, Networld Media Group

When it comes to expanding a brand by putting locations in nontraditional venues, Philly Pretzel Factory Co-founder and CEO Dan DiZio is willing to try a variety of avenues first before franchisees have to take the unknown path. By investing his own money to see what works and doesn't work, Philly Pretzel Factory locations, which originally were only stand-alone stores, can now be found in transportation and entertainment venues, and in the nation's largest retailer, Walmart. Its first grocery location opened last month inside a Shop Rite located at 2358 Cheltenham Ave., in Philadelphia.

Continuing down this path of curiosity, DiZio recently opened the first Philly Pretzel Factory location inside a grocery store as a part of a larger expansion plan for the brand into grocery stores. 

Philly Pretzel Factory was founded in 1998, by college buddies DiZio and Len Lehman, and has grown into the largest Philly-style pretzel bakery in the world. It feeds customers at more than 150-franchised locations primarily in the Northeast and Mid-Atlantic, expanding from New York to Florida. Philly Pretzel Factory's menu offers the traditional Philly-style pretzel and also includes pretzel twists, mini pretzels, rivets, pretzel dogs, cheesesteak pretzels and a variety of mustards. Its products can be found in a stand-alone bakery, 

QSRWeb chatted with DiZio to find out how and why he opted to open a unit inside a grocery store.

Q: When and why did Philly Pretzel Factory begin expanding into transportation and entertainment venues — airports, train stations, stadiums, etc.?

DiZio: Within a few years after opening our flagship store. We knew we had a simple and scalable franchise concept and wanted to expand. We started at the Frankford Terminal location in Philadelphia and expanded from there.  

Q: When and why did it expand into a grocery story? What store is it and where is it?

DiZio: I've noticed that there has been a trend in franchising of small, scalable franchise concepts in non-traditional venues such as Walmart. Grocery markets appear to be a logical location for a small pretzel bakery as customers are there for food and could go home with a bag of fresh, hot Philly pretzels. 

Q: Are there plans to expand into additional grocery stores/chains or other nontraditional locations?

DiZio: Yes. We are currently looking at other grocery opportunities and are always open to other types of non-traditional locations.

Q: What drives your approach to this concept?

DiZio:Giving the customer a great pretzel, which turns into a great experience and a great memory.

Q: Was it cheaper to open in a grocery store than a traditional location? 

DiZio: Yes, it is, because of a smaller footprint, rent overhead and build out are all a lot less expensive. Basically, the shell is already there, so we don't need to start from scratch.

Q: What was the startup cost?

DiZio: It was very minimal. We already had a lot of extra equipment that we used in this store, so we don't have an exact number for the start-up. 

Q: What's been the ROI? 

DiZio: It's been good, based on the first two questions we just discussed, and the foot traffic has been very high. Because people are around food, to grab a quick snack from Philly Pretzel Factory is definitely on their minds.

About Travis Wagoner

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Travis Wagoner spent nearly 18 years in education as an alumni relations and communications director, coordinating numerous annual events and writing, editing and producing a quarterly, 72-plus-page magazine. Travis also was a ghostwriter for an insurance firm, writing about the Affordable Care Act. He holds a BA degree in communications/public relations from Xavier University.