Entrepreneur Rolls Out Hot Dog Restaurants Despite Pandemic

Restaurant owners are struggling to survive in the pandemic, never mind trying to open a business. But Aaron Anderson is even going beyond starting a single restaurant, with plans to open a handful of hot dog franchises in his hometown of Philadelphia.

The 40-year-old entrepreneur has debuted or readied to open four The Original Hot Dog Factory eateries this year in the City of Brotherly Love. The menu includes an array of designer dogs, many named after cities and states.

The move provides one recipe for restaurant expansion at a time when owners of eateries are closing or barely hanging on: flexibility and adaptability. He turned starting a restaurant in a pandemic into an advantage by planning the business for the era of the coronavirus, taking advantage of the fact that he wouldn't have to change an already established concept.

Anderson adapted his franchise locations to survive on takeout and delivery orders, making sure to immediately sign up with third-party delivery services because Philadelphia had banned indoor dining during the COVID-19 outbreak. That citywide restriction ended only this week.

He opened his first Hot Dog Factory location, a concession at Subaru Park, in February before the pandemic started. But that sports venue was soon closed down when the Major League Soccer season was suspended. Anderson had hired about two dozen employees to work at the stadium, and about a third of them said they needed the job to provide for their families.

Keeping those workers employed motivated him to open an 800-square-foot grab-and-go site in the Center City neighborhood, at 125 N. 15th St., and then a 400-square-foot spot at The Bourse food hall at 111 S. Independence Mall East. Anderson has another Hot Dog Factory, at 1,500 square feet, under construction in the Fishtown section of the city, at 2401 Aramingo Ave.

And he isn't finished expanding his fledgling restaurant portfolio. Anderson has recruited a franchisee to open a Hot Dog Factory in Voorhees, New Jersey. And he is working on a steakhouse concept that he plans to be a prototype for a national franchise chain. The first Steakhouse 1635 is slated to open by the end of the year in Philadelphia, possibly on New Year's Eve, according to Anderson.

He is operating his eateries in a tough environment. The COVID-19 outbreak has crushed many small businesses, and disproportionately hurt enterprises run by people of color, according to a report released last month by New York City. In general, Black entrepreneurs cited lack of access to capital, lack of experience and resources, difficulty finding customers and not having affordable workspace as their top problems even without the pandemic, a survey contained in that report found.

And corporate America has been accused of racial bias, of not providing an equal playing field to Black business people. Last week, more than 50 former franchisees of McDonald’s restaurants who are Black filed suit against the fast-food chain, alleging they were steered to inferior sites with low sales and in high-crime areas.

But a determined Anderson had enjoyed success in the business world long before the Hot Dog Factory. He was born and grew up in Philadelphia, raised by a single mother as one of five children. As an adult working as an assistant to a Sony record executive, Anderson launched a screen-printing company, Union Printing, in 2009. He landed Sony as a customer, and his printing company thrived, providing him the financial stability and capital to invest in other businesses, such as the hot dog restaurants.

Anderson didn't have a background in the restaurant industry. That didn't stop him from signing up as a Hot Dog Factory franchisee as well as an investor in the Smyrna, Georgia-based company. The Hot Dog Factory gained national attention, and caught Anderson's eye, through the Bravo show "The Real Housewives of Atlanta." The chain's owner, Dennis McKinley, is engaged to “Real Housewives” star Porsha Williams. Anderson was intrigued by the restaurant concept.

“There’s definitely a market for it," he said. "And there’s not even any competition because every other person that does sell hot dogs, their concept is nothing like this one. So once that started registering in my mind I flew down to Atlanta and I tried the food."

While the national chain Nathan's features frankfurters, they are served up traditionally. In contrast, the Hot Dog Factory offers up 20 specialty weiners, including the Jamaican Jerk Chicken Dog, topped with grilled pineapples, onions and a sweet island sauce; a surf-and-turf dog, which is sprinkled with lump crab meat; and the Italian dog, a deep-fried sausage dressed with peppers and onions.

Anderson took the Hot Dog Factory's training for franchisees but wasn't daunted by his lack of experience in the restaurant industry.

“For myself, the way that I tend to think is I like to do multiple different things," he said. "And with that being said, I don’t ever feel the need to perfect a business in and of just because I own it. I feel like I can get a lot more done and help another person if I’m hiring somebody that has a college degree. So I tend to pick certain things that peak my interest, and I actually hire help that are really good at what they do.”

In addition to being a franchisee, Anderson is now also an area representative for the Hot Dog Factory.

While the pandemic created challenges for Anderson, dampening the sales he expected, its impact on the retail real estate market provided some positives, including negotiating a couple of good deals on leases. For his Fishtown location, for example, Anderson said his rent will be about 33% less than it would have been pre-COVID-19. And it's a great location.

“They’re building a Chick-fil-A right next door," he said. "Anytime you see a Chick-fil-A or a Starbucks, you just go. It’s like they already did the homework for you.”

Anderson also said he did well negotiating for the 2,200 square feet at 1635 Market St. where he is constructing his steakhouse prototype. He wants Steakhouse 1635 to put a modern spin on a traditional steakhouse.

“I go out to eat a lot, and one of my favorite dishes is steak," Anderson said. "I love Ruth's Chris, that’s one of my favorite places, and Del Frisco's. And I just thought that they all are very nice restaurants, but they’re traditional. I wanted to create a concept that I can ultimately franchise and put in every city, but a very sexy, midcentury modern feel to it. Just something I’d like to go to and feel really good when I walk in.”

Its menu will be different than traditional steakhouses, with offerings such as a a plant-based steak for vegans, according to Anderson. He said he hopes to have it open by the end of the year, perhaps with a kickoff on New Year's Eve.