Web Exclusive | April 2017 | By Danny Klein

NYC's Iconic Papaya King Preps for Explosive Growth

The concept, which was founded in 1932, is ready to bring 'the best hot dog in the world' to the masses through franchising.
Papaya King has a goal of 500 units in North America. And that's just the beginning. Papaya King
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Naturally, Wayne Rosenbaum is a bit biased. But, unlike many Big Apple natives, he’s not territorial. “There’s no reason only New Yorkers should have the best hot dog,” says Rosenbaum, president of Papaya King.

It’s only taken 85 years for the big city to start sharing. Papaya King, once called the best hot dog in New York by Julia Child, recently linked up with one of the franchising industry’s most recognizable names as it targets explosive growth.

Fransmart, the development company behind Five Guys and Qdoba, is directing the future of the legacy brand, which was founded in 1932 by Gus Poulos on the corner of 86th and 3rd as a juice bar.

Dan Rowe, the CEO of Fransmart, says 500 locations across North America is a realistic goal. After that, they will start looking across the ocean and truly pop the lid off Papaya King’s potential.

The plan is to go after the 40 biggest media markets in North America (Canada included) and drop franchisees in each one. New York, meanwhile, will continue to grow corporately. Currently in its home state, there are two Manhattan spots along with one unit on Flatbush Avenue in Brooklyn.

One thing that impressed Rowe and Fransmart, however, was that Papaya King already proved its mettle as a scalable brand.

In November 2016, a franchised location opened on Paradise Road in Las Vegas, and another store—this one on the Strip, complete with full bar—is coming. The franchisee is a large, multi-unit Checkers Drive-In operator.

“That was a big deal for us because that’s usually the kind of franchises we sell,” Rowe says. “We don’t normally do mom-and-pops.”

Papaya King might be small but it wields a mighty fanbase. Anthony Bourdain and Andrew Zimmern have been spotted there on numerous occasions and Emril Lagasse once even manned the grill. The Beatles stopped by before their legendary Ed Sullivan performance and The New York Times labeled Papaya King “the best hot dog in the world.”

“Basically, we decided to start franchising because we want America to realize that we are the No. 1 frankfurter around and we have been around for a reason,” Rosenbaum says.

Not to mention the tropical drinks, such as Strawberry Fields and Coconut Champagne, as well as fresh smoothies and fresh juices. “I’ve been having those for 20 years,” Rowe says.

Papaya King figured Vegas was a good market to test the waters. The brand was approached by the franchisee, who happened to be from New York, and a deal was struck. “We figured that it would be a good market to break into it because a lot of people vacation, tourists, locals, everybody has to eat. And what do they have to eat? There’s a lot of over-priced stuff in Vegas. We figured that Las Vegas needed a Papaya King to have something for the everyday guy and the tourist alike. And who doesn’t like a great American hot dog?” Rosenbaum says.

The idea to franchise, he adds, has been seven years in the making. It was driven by the notion that “everybody in America wants a piece of New York. Whether they’ve been here or not.”

But it’s also keyed, especially from Rowe’s perspective, by Papaya King’s footprint and its ability to drive massive volume from a compact model.

“They’re not complicated. They’re not expensive to build. His store in New York, for example, does $1.5 million out of 400-square feet and, even during the busy, busy period you never see more than three or four people in the store,” Rowe says.

In other words, you’re talking about Five Guys volume with basically a quarter of the staff. Also, while this topic has been breached before, hot dogs are definitely the bride’s maid to hamburgers in this business.

There are some concepts—Nathan’s and Wienerschnitzel come to mind—as well as fast casual Dog Haus, featuring frankfurters in a starring role. From a nationally branded perch, however, it’s not exactly a common sight.

“If you go to airports, you go to food courts, you just don’t see a consistent, high-quality branded hot dog player,” Rowe says. “So we think we can do that. We think there is room. There are some older ones, but they’ve kind of gone through their growth trajectory already. These guys have not. I think there is something new in that it is just now going to be growing with us around the country.”

Rowe pictures airports, colleges, and pretty much any busy, urban mass gathering area as a prime target. He doesn’t see many roadblocks, either.

“The most important thing in restaurant marketing is real estate,” Rowe says. “You’ve got to have great locations. You’ve got to be where people are.”

Not only does Papaya King require a small footprint, but also its ingredient and recipe list is easily repeatable, and at a high level. There isn’t a lot of venting or equipment needed. Most of the food operation can be set in a kit and given to a franchisee on day one.

Papaya King is going to move aggressively, Rowe adds.

“If these sites pop up we’re going to take them first and put a franchisee in them second. We’re never going to let great sites go,” he says. “If a great site pops up we’re going to snatch it up and then find a great local partner. It’s important because we want good local operators. We want people to be in their stores on a regular basis. So you have to have great local franchisees.”

That’s a similar approach to how Fransmart grew Five Guys. And also in a familiar vein, Papaya King is promoting a product that isn’t trendy or unique.

“It’s harder to launch a brand-new way of eating,” Rowe says. “But people already like hot dogs. People are so brand conscious now that you just don’t see hip, trend, cool hot dog concepts, and we’re going to change that here.”

Rosenbaum says their role as an operating company will be “to make sure that we have the exact same restaurant as we have in New York.”

That means all the same ingredients. All the same recipes. Most will have a similar look, with murals, logos, and brandings. And every franchisee will be required to train in New York.

“The ingredient list is not huge. It’s all made fresh. Literally you could roll it out and it’s not going to cost a lot of money. So it’s going to be good for qualified individuals who know what they’re doing,” he says, adding that they’re looking for clusters and territories from willing operators.

“The excitement has been built,” Rosenbaum adds. “Everybody involved is saying it’s time to make this push to make this a national brand. We’re ready for it.”