Kolache Factory has taken an age old Czech delicacy and given it an American twist. Some of the traditional flavors still reside here, but imagination is what fuels this organization. We spoke with a very excited Director of Franchise Sales Aaron Nielsen and Vice President Dawn Nielsen.
Kolaches are soft, rich yeast dough pastries with a depression in the middle that has traditionally been filled with poppy seeds and fruits such as plums. I am Czech and grew up knowing and loving Czech food. The dough is the hero here and it is so versatile that you can put just about anything in it. One of the latest varieties is the sausage and gravy kolache, which makes me wish that Kolache Factory was in Canada!
The company’s most popular offerings are dependent on the region. Customers in the Indianapolis area and surrounding region enjoy traditional fruit kolaches. In Texas, the sausage and cheese combination is the big seller, as are egg and sausage, egg and cheese, or egg, potato, and cheese combinations. New varieties are always coming out, and the potential for new flavors and combinations seems unlimited.
What the company refers to as the ‘Kolache Olympics’ takes place every year in which each store competes to come up with new flavors. One of the flavors that is being tested currently is the steak, egg, and cheese. The difficulty in bringing this one to market lies in finding a source for an affordable, high quality steak. The release date is set for some time in 2017.
“The way the ‘Kolache Olympics’ works, is that all of the stores compete with VIP judges overseeing the efforts. The recipes from the winners and runners-up may be adjusted for the mainstream before coming out the following year on the ‘Kolache of the Month’ rotation.”
Mexican flavors seem to be the most popular. Chicken enchilada and jalapeño popper came out as flavors of the month as a result of the contest and are especially sought after in the Texas market.
“It’s good when we have new franchisees come on board because they are thinking outside of the box. Perhaps it is because they do not have any concept of what we’ve been doing in regards to flavors, so it’s all new and exciting and they come in with a breath of fresh air that benefits our company. This is how the sausage and gravy idea came to be.”
There are many options for people who want to eat healthily. For those who are watching calories and sugars, the company has partnered with healthydiningfinder.com to perform the nutritional analysis. Healthy Dining Finder has picked five items that are designated as “healthy” by its standards which are lower in calories, sodium and sugar. The egg and cheese kolache along with the Italian chicken kolache and fruit kolaches are on that list.
There are complications on the horizon coming from an FDA ruling which aims to remove trans fat from foods. “We have not had luck with removing all trans fat because of the margarine that we use. Removing the trans fat makes the product very dry, so we are struggling with that and trying to find a product that would not affect the recipe. Our recipe has not changed in thirty-four years, and we don’t want to change it, but as regulations change, we are forced to do things we don’t want to do.” Kolache Factory is actively trying to find a remedy to this situation that will not affect the taste or texture of their prized kolache dough.
Sports partnerships have been a way for the Kolache Factory to connect with the community, especially in the Houston area. These partnerships are in this area because most of the kolache stores are in Houston. The Houston Texans are the primary sponsorship. The company also works with the Houston Astros baseball team and a minor league baseball chain called the Sugar Land Skeeters, which has been a fantastic opportunity for Kolache Factory to connect with our local community according to Dawn, as the Skeeters are a fairly new team.
Director of Franchise Sales, Aaron Nielsen sees the potential growth as unlimited. Currently, there is a franchisee in Dallas who wants to expand operations to his hometown in South Korea. Kolache Factory has been approached by people in Canada, Mexico and all over the world who are drawn to the concept, how fast the company is growing, and the price point. The people that Kolache Factory looks for to run a franchise must have an entrepreneurial spirit, know how to follow the business plan, and be a good fit with the company.
Aaron explains the process: “We don’t want them to re-create Kolache Factory. They do not have to possess any cooking experience. They just need to know how to deal with customers and be good listeners. The biggest test for them is to go through our two step approval process. Once I have approved them as a candidate, they must then go before our Franchisee Board.”
Most of the new units are incorporating an espresso program. Kolache Factory does not expect to compete with Starbucks for a piece of the coffee shop pie, but “maybe just a sliver would be nice, and it would increase our drink sales. We want our customers to not have to make two stops. We believe our coffee and espresso stand up and are excellently paired with our Kolaches.”
Kolache Factory has a loyalty program called Thanx that has been in effect since October of 2014. The Thanx app allows customers to register their credit card(s) they most frequently use to earn $5 cash back when they reach the $50 spent at Kolache Factory.
“It allows nearly real-time access to reviews and expenditures by our customers and what location they visited. This is great if we get a low score, because we can immediately offer a remedy and connect with the customer with an apology, as well as promptly notify the store in question of a potential problem. We have a very high ranking with our customers within the system.”
When we last spoke with Kolache Factory, plans were underway to open new locations in New Mexico, Colorado, and Virginia. The Denver and Virginia Beach stores are now doing remarkably well. “It’s one of those grand openings that never stops.” In Virginia Beach, the franchisee actually purchased the land and was able to build a drive through which is ideal for Kolache Factory.
New Mexico does not have a large Czech population, and the Albuquerque store is a little tucked away in a strip mall, so getting the word out is most important. On May 16, the franchise owner, Bob Rundle and Hermann Gruebler who is training director of franchisee operations, were featured on local news channel KRQE. “We were very excited about the TV aspect, as they were able to display the food and explain what it is. From what we have heard, we were well received.”
The popularity of kolaches is such that company momentum seems inevitable. For over thirty years, the Czech recipe has been impressing people all over the U.S. People are rushed and crave something unique and nutritious that appeals to their taste buds, and kolaches come in many different varieties to please many palates.
The demand for Kolache fare is rapidly increasing. “We have more outlets in social media, so more information is being thrown out there. Texas is our home base, and there are a lot of Czech people here which explains why it is a popular offering. When we opened in Virginia Beach and New Mexico, more people were exposed to our brand, and that has fueled our rapid and continued growth.”
If you look at the landscape of food offerings out there, general restaurants and franchise restaurants are commonplace, but more ethnic foods are entering the market. America is a melting pot, and people are trying new things. With kolaches, the appeal lies in the variety of flavor choices and the convenience. Kolache Factory prides itself in getting people in and served very quickly which makes them want to come back for more.
“We have our loyal fan base, and we’ve seen generations of families come into our stores. A family member may come in from out of state and be introduced to Kolache Factory at breakfast, and that is how we get exposed. Houston is an oil town with a lot of transplanted Houstonians. When they get back home, the word is out about our delicious kolaches and the question becomes when or how will we get there.”