The Breakfast Specialist: Kolache Factory
Doughnuts, bagels and maybe breakfast tacos. If you’re bringing in breakfast for the office or the family, those are your main options in most places. Thanks to Kolache Factory, in some markets, there’s another choice.
This Houston-based chain specializes in, of course, kolaches. This baked Czech favorite features a dough paired with either sweet fillings, like apple or strawberry options; or savory options, including scrambled eggs, sausage and bacon.
Kolache Factory got its start in the early 1980s, when John Banks opened the first location with just five types of kolaches. Today, the company has about 60 restaurants (slightly more than half are franchised) located primarily in Texas but also found in markets sprinkled around the country. The chain sells 25 types of kolaches out of these locations, along with rotating seasonal flavors and specials.
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This approach serves Kolache Factory well, even in the age of COVID-19. While sales were understandably down in 2020, they bounced back in 2021, according to Dawn Nielsen, the company’s chief operating officer and Banks’ daughter. This past year’s same-store sales were up about 20% versus 2020, she says, and most stores posted more than 10% growth compared to 2019.
Nielsen believes part of this success is the quality of the food paired with the relative lack of competition. “Breakfast is one of the great opportunities out there,” she says. “There are so many concepts for lunch and dinner but fewer that are available for breakfast that aren’t in-and-out fast food. We’re definitely not fast food. We’re baked; it’s something we have to prepare for and plan our bakes accordingly.”
Indeed, the chain puts some serious work into making its kolaches. Stores either make their dough from scratch (for some corporate stores) or with a dough concentrate. In either case, staff must freeze the dough and then defrost it before baking, Nielsen says. That requires genuine planning to execute the menu.
The operation isn’t difficult to execute, though. All proteins, save for the liquid egg, arrive precooked, while the cooking equipment consists of the ovens for the initial bake and microwaves to warm kolaches at the customer’s request.
Images courtesy of Kolache Factory
Overall, then, the chain’s operations are simple. Simple enough that the company doesn’t require its franchisees to have restaurant experience, just an entrepreneurial spirit.
“This is not rocket science by any stretch of the imagination,” Nielsen says. “Franchisees are given four weeks of training on how to run a store, how to bake the product. It’s very easy to train people to come and work. It’s really not hard to feel comfortable.”
This ease of operation, combined with the relatively normal life a breakfast-focused concept offers, makes the chain particularly appealing to potential franchise partners who, for instance, want to have dinner every night with their family.
Though based in Texas, the company is willing to open stores in markets across the country. As it enters new markets, Nielsen notes, the chain’s best strategy is to start in city centers, where people can pick up a box for the office, then spread outward to the suburbs when those communities can support a store.
“Growth’s been slow and steady,” Nielsen says. “We typically open between four and six units a year. That is doable and something that our infrastructure can handle. It’s something that we pride ourselves on. We don’t over-expand too quickly because we want our franchisees to be successful and have the support they need.”
