Dog Haus Hands Its Map to Operators, Not Brokers

The usual way an emerging restaurant brand fills a national map is to sell it. A master franchisee or a third-party sales firm buys the rights to a region, recruits buyers and collects a share of the fees. Dog Haus just tried something close to the opposite.

On Nov. 6 the Pasadena, Calif., hot dog chain named the first four of a planned 15 area directors, according to the company's announcement. Together they have signed development agreements for more than 400 restaurants across the Southeast and Mid-Atlantic. Each territory covers roughly 100 restaurants. Each director is expected to build and run restaurants as an operator and to coach the other franchisees building in the same market. And each joins Dog Haus as an equity partner.

That is a lot of paper for a small brand. In July, CEO Michael Montagano told Nation's Restaurant News the program was meant to take the chain from about 60 locations to 300 and beyond. The full design calls for 15 territories and 1,500 restaurants nationwide.

The names on the first four territories explain why the company is willing to bet the map on them. Nick Crouch, who will develop Florida, owns more than 135 Tropical Smoothie Cafe locations. PG1 Restaurants, which operates more than 60 restaurants including Dave's Hot Chicken units, takes North Carolina, Tennessee, southern Virginia and West Virginia. Kyle Yancey, whose Opportunities Restaurant Group runs Jersey Mike's shops in Maryland and Washington, D.C., gets Delaware, D.C., Baltimore, Philadelphia and northern Virginia. Jesse Allen, who recently exited his Jersey Mike's portfolio in New Jersey and Pennsylvania and operates Dave's Hot Chicken in the Southeast, takes Alabama, Georgia, Louisiana and Mississippi.

The architect is Chris Rigassio, who joined as president and chief development officer this year. He and Garen Khodaverdian, now chief operating officer, arrived with a 50-unit deal of their own and a background as multi-unit franchisees of Wingstop and Jersey Mike's with more than 100 restaurants between them, Restaurant Dive reported in May.

"Upon joining Dog Haus, the first thing we set out to build was the structure, not the pipeline," Rigassio said in the announcement. "Most brands sell master agreements to salespeople. We are awarding markets to proven, large-scale, multi-brand, multi-state operators."

The Jersey Mike's fingerprints are everywhere. Yancey once served as an area director of franchise support there. Dog Haus also hired three former Jersey Mike's leaders for its development team: Lauren Bellingham as vice president of store development, who has worked on more than 1,500 restaurants; Jerry Kallman as vice president of franchise sales, who built one of Jersey Mike's largest area director territories; and RJ Cancilla as director of real estate.

The model has a well-known precedent in the sub chain where Rigassio and Khodaverdian started. Jersey Mike's opened 80 stores in its third quarter alone and ended September with 3,456 locations, according to its earnings release, with nearly all of them franchised. Dog Haus is borrowing the structure, and some of the people, that built that footprint.

The mechanism matters more than the unit count. A broker or master franchisee earns most of its money when an agreement is signed. An area director with equity earns when the system is worth more, and that only happens if stores open and make money. Rigassio's pitch is that people who live in the market and run restaurants there will pick better sites, open them faster and hold franchisees to standard because their own stake depends on it. Contrast that with the route HTeaO took earlier this week, handing its franchise sales to Dine Growth Group, a third-party firm.

There are fair questions about the trade. Each of these operators already runs other growth brands, so Dog Haus will compete for their capital and attention with Tropical Smoothie Cafe, Dave's Hot Chicken and Jersey Mike's. A director who both builds stores and coaches neighboring franchisees will be choosing sites in the same market, and the announcement does not say how conflicts over the best corners will be settled. Concentration cuts both ways too: four operators now hold the development plan for a large share of the eastern U.S.

For franchisees considering a Dog Haus territory, the practical change is who they will answer to. Their day-to-day coach will be a peer operator with equity in the brand rather than a corporate field consultant or a sales broker. That can mean faster help on a bad opening. It can also mean less distance between the person grading you and the person competing with you for real estate.

Dog Haus said it expects to announce a second wave of area directors by the end of the first quarter of 2027 and to sell out the entire country by the end of the year, per the release as published on Franchising.com. It also plans a Dog Haus retrofit next year. None of the 400 restaurants exists yet. The number that will matter is how many of them are serving customers by the end of 2027.