New York - 1 July, 2003 -

Summertime at Coney Island is synonymous with colorful entertainment, screeching coaster riders and the tantalizing aromas of classic New York fare. Many who have enjoyed the area over the years point to Nathan’s Famous the area’s original hotdog stand as a dining destination. Even before thrill seekers rode the Cyclone or shoppers strolled the boardwalk, they could enjoy a Nathan’s hotdog with the works for just a nickel. Mouths watering, patrons still line up to sample hot dogs and “krinkle-cut” french fries at Nathan’s locations in Coney Island and beyond. Today, there are 152 Nathan’s Famous’ worldwide, of which most are franchised. Wayne Norbitz, president and COO, who has been with Nathan’s for 27 years, says he’s most proud of the fact that Nathan’s has developed a distinguished legacy. But more than a chain of hotdog stands, Norbitz says, “after 87 years, we’re still flourishing, which is unusual. We’re proud to be associated with the products that we sell, and I think ours are the best. It’s easy to sell them when you feel that way. I’m proud of our history, our products and the people who work here.” When Norbitz refers to “unusual” growth for a company that’s approaching a century in business, he’s talking about how Nathan’s recently moved from merely owning and operating restaurants to owning and marketing brands. “Most competitors in our industry just operate restaurants and we do more we’re expanding into other ways of doing business,” Norbitz says. “Recently, we’ve implemented an aggressive strategy to expand the reach of our brand by diversifying product offerings and adopting an expanding points-of-distribution program. Our products are sold in about 6,000 supermarkets and club stores. Nathan’s Branded-Product Program has grown to about 2,200 points of sale. “With the Branded-Product Program, we allow others in the foodservice industry to advertise Nathan’s hot dogs and sell them like they would Coca-Cola,” he adds. “This program enables independent foodservice operators to sell Nathan’s hot dogs with no up-front franchise fees or ongoing royalties at venues such as airports, B&I accounts, hotels, sports arenas, convention centers, colleges and convenience stores.” Nathan’s has also recently acquired Kenny Rogers Roasters and Miami Subs, which very well may undergo the same distribution strategy. Nathan’s also owns the exclusive rights to co-brand Arthur Treacher’s Fish & Chips. Results of Co-Branding Together, there are a total of 356 Miami Subs, Kenny Rogers Roasters and Nathan’s. Nathan’s and Miami Subs are primarily in the United States, and Kenny Rogers Roasters are mostly in Asia. The agreement with Arthur Treacher’s means that Nathan’s can sell some of the fish and chip restaurant’s most popular items in Nathan’s, Kenny Rogers Roasters and Miami Subs locations. “In the early to mid-1990s, we started to develop and open small Nathan’s outlets featuring a few signature items such as hot dogs and fries,” Norbitz explains. “The smaller units were successful it was as if the smaller we became, the better. When we placed small units in captive markets such as universities, hotels and airports they were very successful. Sales per square foot were high and we discovered that we had the ability to attract a lot of customers. We began concentrating on small designs. “Because our signature products were unique, it was easy to place them next to other leaders in the industry in malls and food courts,” he continues. “We found that Nathan’s was best suited not as a stand-alone, but as a concept that could be a complement to a wider foodservice environment. That’s how we first started to appreciate having our brand close to other brands. We extended that strategy and began co-branding within our own restaurants in the last few years. In some Nathans’, you can select signature branded items such as Arthur Treacher’s or Kenny Rogers Roasters.” Norbitz says there is incredible power connected with well-respected brands such as Miami Subs, Nathan’s, Kenny Rogers Roasters and Arthur Treacher’s. “Usually, when people go into a large Nathan’s, people understand what our menu is about they think of us in terms of hot dogs, fries and variety,” he says. “We now have tremendous definition and appeal to our variety because of our use of Kenny Rogers Roasters and Arthur Treacher’s. We’ve given the customer more choices.” And although each concept has its signature menu items, Norbitz says each continuously expands its menu to offer even more choices. Recently, Miami Subs introduced new chicken and gyros pitas and variations of the Philly cheesesteak sandwich. “We have standard menus and then on a periodic basis, we introduce limited-time offers,” he says. “It provides loyal customers with new items and creates interest among new customers. We believe the menu is something that is evolutionary and needs to change and the changes need to be contemporary and constantly ahead of the curve. “Many times we’ll introduce an item on a limited-time basis and it will be so successful that it will become a permanent item,” he continues. “For example, we introduced old-fashioned lemonade, which has since become a big part of our standard menu. The Philly cheesesteak was also met with great success and is now a mainstay.” A Dog-Eat-Dog Industry Though Nathan’s found success in sports stadiums, universities and airports, it continues to expand its market strategy. Currently, Norbitz says Nathan’s is concentrating on marketing its brand by distributing Nathan’s in different ways. “What is unusual about Nathan’s is that after 75 years, we began reinventing ourselves in very creative ways,” he says. “We’re presently represented in more than 40 states and our points of distribution are expanding more than 20 percent a year. We’re continuing to grow at a fast rate in terms of distribution. Our hot dogs, for example, are featured in large convenience store chains, in recreational facilities and hotels. We also have a high-profile Nathan’s locations in Las Vegas casino hotels.” These distribution initiatives have come with a set of challenges, however. Norbitz says implementing a point of distribution strategy isn’t always easy. The biggest challenge is the faster Nathan’s grows and the more people who are selling Nathan’s products, the greater Nathan’s need to control its image and final product. “You have a greater sense of comfort that you’re in control when you’re small,” Norbitz maintains. “The challenge in growth is ensuring that the brand is the highest quality. We try to carefully select the people who will be selling our products. There are many different operation programs to support and supervise those people.” Just like there are lines of salivating customers at any given Nathan’s, business people are “lined up” to become franchisees. Hand-picking perfect franchisees is the challenge. “We have a strict process of selecting franchisees, but we’re unusual in that we expend almost no money in advertising for franchisees,” Norbitz claims. “Without solicitation, people come to us wanting to be franchisees. Many managers are involved in selecting the right people. They look for people with strong management and/or foodservice backgrounds, and those who have the finances to develop the business. “When we’ve chosen a new franchisee, we aid them in the design and construction of their unit and we require their management people be trained in our school in New York,” he continues. “We work with them during the pre-opening stage to prepare to open their restaurant. We concentrate on training, operations and marketing. Logistically, it’s more challenging when we open stores overseas. Each geographic region brings its own set of challenges.” Recently, Nathan’s met a challenge when it realized it wasn’t meeting the needs of certain Jewish customers. In L.A., Nathan’s has opened a Kosher” Nathan’s. “We actually didn’t initiate it on our own,” Norbitz admits. But with its ear to the industry, the chain began diversifying itself as Kosher in this area. “It seemed like a natural thing to do,” he says. “Our hot dog is all beef, so many people think of it as Kosher already.” A Man of Many Hats A foodservice veteran, Norbitz has more than earned his free lunches as Nathans’ president and COO. He entered the foodservice business at 14 as an employee at his family’s fast-food hamburger chain, Wetson’s. “I was always working in the fast food environment my family owned Wetson’s, a regional hamburger chain in New York,” he says. “That was a chain in the 1960s that was similar to McDonald’s in that it prospered as small buildings and featured hamburgers, french fries and beverages.” In 1975, he began working full-time at Nathan’s when Wetson’s was acquired by Nathan’s. “When that happened, the son of founder Nathan Handwerker taught me all about Nathan’s. I learned how to cook hotdogs in the original location. I found the family of Nathan’s to be very friendly.” In 1989, Norbitz became Nathans’ pres ident. His humble beginnings, however, have helped him enormously, he says. “I think I have done every single job that an employee can do in the quick-service restaurant industry I was grillman, a cash register employee, a payroll and accounts receivable clerk, and have worked through operations,” he says. “Today I view having these experiences as a luxury because I can relate to all people who can work in our company I understand the challenges in every job. It makes it easier for me to be more supportive. I also believe that employees have confidence in knowing that I don’t ask them to do something that I’ve never done myself.” Norbitz also says he enjoys being a part of the heritage and tradition the late Handwerker began so long ago. “I’m very responsible in maintaining quality and seeing that it continues,” he says. The tradition is expected to continue as long as people crave Nathan’s hot dogs and the nostalgia that goes along with the experience. “One thing I love about Nathan’s is that it has a very strong cult-like consumer appeal,” Norbitz gushes. “Nathan’s has been around since 1916, and it’s been a place where husbands and wives have met, it’s associated with beaches and amusement. There’s a real fanatic appeal. We get all sorts of letters from people telling us their interesting Nathan’s story.” Nathan’s has been a big part of New York from Coney Island to Yankee Stadium. People such as Mayor Michael Bloomberg are open about their love affair with Nathan’s hotdogs. Today, with so many displaced New York natives across the country, the yearnings of Nathan’s has made it easy to expand nationwide, according to Norbitz. Valuable Dog Norbitz says Nathan’s is planning to open 40 new Nathan’s and Kenny Rogers Roaster restaurants this year. Kenny Rogers Roasters will be primarily in Asia. “We just signed contracts in Asia for Nathan’s, also, and are excited about that,” Norbitz says. “In Japan, we’re going to duplicate the U.S. model in that we are looking to develop points of distribution in super mar kets, restaurants and with co-branding.” Overall, he says Nathan’s is a name that is highly visible and valued, and as such, the company is looking to continue expanding. “We’re looking at varied ways to possibly provide Nathan’s all over the world,” Norbitz says. “We found that there are alternative ways of distributing products that are less capital intensive and that are highly profitable. The more we expose Nathan’s, the more valuable it becomes.” A Prot g of the Original Most historians agree the hot dog was developed by Charles Feltman in 1874 and although his Coney Island restaurant is gone, the hot dog lives on at Nathan’s on the corner of Stillwell and Surf Avenues in Coney Island and beyond. Around 1910, Nathan Handwerker, a recent Polish immigrant and Manhattan restaurant manager, responded to a “help wanted” sign in Feltman’s restaurant and worked under the original before he tried his hand at the business. Within a year, Handwerker invested more than $300 that he saved into renting a stand at the corner of Stillwell and Surf Avenue. Handwerker sold his hot dogs for five cents each, and differentiated them by putting a hint of garlic in them. Regardless of how tasty and cheap his dogs were, selling them at half the price of Feltman’s perplexed passers-by and many found other places to eat. If Nathan’s couldn’t draw people to its hotdog stand, the city would, albeit not intentionally. In the 1920s, the Stillwell Avenue subway station opened and Nathan’s benefited from its position directly across Surf Avenue. Feltman’s, like many of the island’s onetime staples, fell into financial difficulties in the post-war era and closed in 1954. The beach was no longer a place for sit-down restaurants such as Feltman’s, but Nathans’ quick-service concept appealed to the masses. One year later, Nathan’s sold its one-millionth hot dog.

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