Nathan's Famous, Inc. (NATH): Business Model Canvas [11-2024 Updated]
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Nathan's Famous, Inc. (NATH) Bundle
Nathan's Famous, Inc. (NATH) has carved a niche in the fast-food industry with its iconic brand and diverse menu offerings. This blog delves into the Business Model Canvas of Nathan's, highlighting its key components such as partnerships, activities, resources, and revenue streams. Discover how this legendary brand maintains its competitive edge and engages with customers through various channels.
Nathan's Famous, Inc. (NATH) - Business Model: Key Partnerships
Collaborations with foodservice distributors
Nathan's Famous has established partnerships with various foodservice distributors to enhance its distribution network. These collaborations have been essential in expanding the reach of its branded products across different channels. For instance, foodservice sales from the Branded Product Program reached approximately $50.7 million in the fiscal 2025 period, up from $48.5 million in fiscal 2024.
Licensing agreements with retail chains
The company has entered into licensing agreements with major retail chains, which has significantly contributed to its revenue. In the second quarter of fiscal 2025, Nathan's earned $9.49 million in license royalties, an increase of approximately 14% compared to the same period in fiscal 2024. The royalty income from sales of hot dogs through its agreement with Smithfield Foods, Inc. alone accounted for $8.6 million in the same quarter.
Partnerships with franchisees and virtual kitchen operators
Nathan's Famous operates a franchise model that has expanded its footprint to 243 franchised locations as of September 29, 2024, compared to 235 locations a year earlier. The total franchise fee income for fiscal 2025 was $200,000, reflecting a slight decrease from $238,000 in fiscal 2024. Additionally, partnerships with virtual kitchen operators have emerged as a strategic avenue for growth, allowing Nathan's to tap into new consumer bases without the overhead costs associated with traditional brick-and-mortar establishments.
| Partnership Type | Details | Financial Impact (Fiscal 2025) |
|---|---|---|
| Foodservice Distributors | Collaborations to enhance distribution | $50.7 million in foodservice sales |
| Retail Licensing | Agreements with major retail chains | $9.49 million in license royalties |
| Franchisees | Franchised locations growth | $200,000 in franchise fee income |
| Virtual Kitchens | Partnerships to reach new markets | Emerging revenue stream |
Nathan's Famous, Inc. (NATH) - Business Model: Key Activities
Marketing and brand management of Nathan's products
Nathan's Famous has a robust marketing strategy aimed at enhancing brand visibility and driving sales across its product lines. In fiscal 2025, advertising fund revenue, after eliminating Company contributions, was approximately $988,000, a slight decrease from $993,000 in fiscal 2024. The Company actively promotes its brand through various channels including social media, partnerships, and sponsorships, which help maintain a strong market presence.
Operation of company-owned and franchised restaurants
Nathan's operates both company-owned and franchised restaurants, with a total of 243 franchised locations as of September 29, 2024, compared to 235 locations in the previous year. Franchise restaurant sales decreased to $36,334,000 in fiscal 2025 from $36,433,000 in fiscal 2024. Company-owned restaurant sales also saw an increase, reaching $9,547,000 in fiscal 2025, up from $8,851,000. The operational efficiency of these restaurants is critical, with food and paper costs as a percentage of sales at 24.8%, down from 27.8% in the prior year.
Production and distribution of food products
The production and distribution of Nathan's food products, particularly its famous hot dogs, are key activities. In fiscal 2025, foodservice sales from the Branded Product Program rose to $50,682,000, compared to $48,522,000 in fiscal 2024. The volume of hot dogs sold increased by approximately 2%, with average selling prices up by 2.5%. Overall, the total cost of sales for the Branded Product Program increased to $46,290,000 in fiscal 2025 from $44,010,000 in fiscal 2024.
| Key Metrics | Fiscal 2024 | Fiscal 2025 |
|---|---|---|
| Advertising Fund Revenue | $993,000 | $988,000 |
| Total Franchised Locations | 235 | 243 |
| Franchise Restaurant Sales | $36,433,000 | $36,334,000 |
| Company-Owned Restaurant Sales | $8,851,000 | $9,547,000 |
| Food and Paper Costs (% of Sales) | 27.8% | 24.8% |
| Foodservice Sales (Branded Product Program) | $48,522,000 | $50,682,000 |
| Total Cost of Sales (Branded Product Program) | $44,010,000 | $46,290,000 |
Nathan's Famous, Inc. (NATH) - Business Model: Key Resources
Strong brand recognition and heritage
Nathan's Famous, Inc. has established a strong brand recognition since its inception in 1916. The brand is synonymous with quality hot dogs and has become a cultural icon, particularly through its association with the Nathan's Hot Dog Eating Contest.
Diverse product portfolio (hot dogs, fries, etc.)
The company boasts a diverse product portfolio that includes:
- Hot dogs
- French fries
- Onion rings
- Various proprietary spices and condiments
- Franks-in-a-blanket and mozzarella sticks
In the fiscal year 2025, total revenues from branded products reached $50,682,000, an increase from $48,522,000 in fiscal 2024. This reflects a 4% increase in the volume of hot dogs sold and a 2.5% increase in average selling prices.
Franchise network and restaurant locations
Nathan's Famous operates a robust franchise network, which is crucial for its business model. As of September 29, 2024, the company had:
- 243 franchised locations worldwide
- Franchise fees totaled $200,000 for fiscal 2025, a decrease from $238,000 in fiscal 2024.
The franchise restaurant sales for fiscal 2025 stood at $36,334,000, slightly down from $36,433,000 in fiscal 2024. The company also reported a total royalty income of $2,047,000 in fiscal 2025 compared to $2,128,000 in fiscal 2024.
| Key Metric | Fiscal Year 2024 | Fiscal Year 2025 |
|---|---|---|
| Total Revenues from Branded Products | $48,522,000 | $50,682,000 |
| Average Selling Price Increase | - | 2.5% |
| Franchised Locations | 235 | 243 |
| Franchise Fees | $238,000 | $200,000 |
| Franchise Restaurant Sales | $36,433,000 | $36,334,000 |
| Total Royalty Income | $2,128,000 | $2,047,000 |
Nathan's Famous, Inc. (NATH) - Business Model: Value Propositions
Iconic Nathan's Famous brand experience
Nathan's Famous is renowned for its iconic brand, which has been a staple in American culture since its inception in 1916. The brand is synonymous with high-quality hot dogs and a unique dining experience that draws customers to its flagship location at Coney Island, New York. The strong brand recognition contributes significantly to customer loyalty and repeat business.
High-quality, recognizable food products
Nathan's Famous prides itself on delivering high-quality food products, particularly its famous hot dogs. In the fiscal year 2025, sales from the Branded Product Program reached approximately $50,682,000, a 4% increase from $48,522,000 in fiscal 2024. The company has reported a 2% increase in the volume of hot dogs sold, alongside a 2.5% rise in average selling prices. This commitment to quality ensures that Nathan's products are not only recognizable but also favored by consumers.
Diverse dining options through various channels
Nathan's Famous offers a diverse range of dining options, including company-owned restaurants, franchised locations, and a robust Branded Menu Program. As of September 29, 2024, there were 243 franchised locations, up from 235 the previous year. Company-owned restaurant sales increased by approximately 8% to $9,547,000 for the fiscal 2025 period. Additionally, license royalties rose by 12% to $22,412,000, underscoring the effectiveness of Nathan's multi-channel approach to reach a broad customer base.
| Financial Metric | Fiscal 2025 Amount | Fiscal 2024 Amount | Percentage Change |
|---|---|---|---|
| Total Revenues | $85,876,000 | $80,729,000 | +6% |
| Branded Products Sales | $50,682,000 | $48,522,000 | +4% |
| Company-Owned Restaurant Sales | $9,547,000 | $8,851,000 | +8% |
| License Royalties | $22,412,000 | $19,997,000 | +12% |
Nathan's Famous, Inc. (NATH) - Business Model: Customer Relationships
Loyalty programs for regular customers
Nathan's Famous has implemented various loyalty programs aimed at enhancing customer retention and encouraging repeat visits. These programs often include discounts, exclusive offers, and rewards points that customers can accumulate with each purchase. In fiscal 2025, Nathan's reported total revenues of $85,876,000, reflecting a 6% increase from $80,729,000 in fiscal 2024 . The loyalty programs contribute significantly to increasing customer engagement and driving sales growth.
Direct engagement through social media and promotions
The company actively engages with its customer base through social media platforms, where it promotes new products, special offers, and events. This direct engagement strategy has proven effective in reaching a broader audience. For example, Nathan's Famous reported an increase of 14% in license royalties to $22,412,000 in fiscal 2025 compared to $19,997,000 in fiscal 2024, indicating successful promotional strategies that resonate with consumers .
Support and resources for franchise partners
Nathan's Famous provides extensive support and resources to its franchise partners, ensuring consistent brand representation and operational efficiency. As of September 29, 2024, there were 243 franchised locations operating, up from 235 the previous year . The company reported total franchise fee income of $200,000 in fiscal 2025, a decrease from $238,000 in fiscal 2024, which reflects the challenges faced by some franchisees . However, Nathan's continues to invest in training programs and marketing resources to bolster franchise performance and customer satisfaction.
| Year | Total Revenues | License Royalties | Franchise Fee Income | Franchised Locations |
|---|---|---|---|---|
| 2024 | $80,729,000 | $19,997,000 | $238,000 | 235 |
| 2025 | $85,876,000 | $22,412,000 | $200,000 | 243 |
Nathan's Famous, Inc. (NATH) - Business Model: Channels
Company-owned restaurants and franchises
Nathan's Famous operates a combination of company-owned and franchised restaurants. As of September 29, 2024, Nathan's had a total of 243 franchised locations, which included both domestic and international units. The total franchise restaurant sales for the fiscal 2025 period were approximately $36,334,000. The company-owned restaurant sales increased by about 8% to $9,547,000 for the fiscal 2025 period, compared to $8,851,000 in the fiscal 2024 period. The franchise fees and royalties amounted to $2,247,000 in fiscal 2025, down from $2,366,000 in fiscal 2024.
Retail supermarkets and grocery stores
Nathan's Famous products are also sold through retail supermarkets and grocery stores. For the second quarter of fiscal 2025, the sales from the Branded Product Program reached $24,536,000, reflecting a 5% increase from $23,352,000 in the same quarter of fiscal 2024. The volume of hot dogs sold in this program increased by approximately 4%, with average selling prices rising by 1.4%.
| Metrics | Fiscal 2025 | Fiscal 2024 |
|---|---|---|
| Branded Product Sales | $50,682,000 | $48,522,000 |
| Retail Volume Increase | 14% | N/A |
| Average Selling Price Change | -2% | N/A |
Foodservice distribution through branded product programs
Nathan's Famous has established foodservice distribution through branded product programs, which are a significant revenue source. The total revenues generated from license royalties increased by approximately 12% to $22,412,000 in fiscal 2025 compared to $19,997,000 in fiscal 2024. Notably, royalties earned on sales of Nathan's hot dogs through a licensing agreement with Smithfield Foods, Inc. reached $20,605,000 for fiscal 2025, up from $18,303,000 in the previous year. The foodservice business earned higher royalties of $107,000 compared to the fiscal 2024 period.
| Revenue Source | Fiscal 2025 | Fiscal 2024 |
|---|---|---|
| Branded Product Program Sales | $50,682,000 | $48,522,000 |
| Royalty Income from Smithfield Foods | $20,605,000 | $18,303,000 |
| Total License Royalties | $22,412,000 | $19,997,000 |
Nathan's Famous, Inc. (NATH) - Business Model: Customer Segments
Fast-food diners and casual eaters
Nathan's Famous primarily targets fast-food diners and casual eaters, capitalizing on its iconic hot dog brand and quick-service restaurant experience. In the second quarter of fiscal 2025, total Company-owned restaurant sales increased by approximately 3% to $5,348,000 compared to $5,193,000 in the second quarter of fiscal 2024 . The increase in average check at locations like Coney Island contributed significantly to this growth.
The volume of hot dogs sold in the Branded Product Program increased by approximately 4% during the same period , highlighting the strong demand among fast-food diners. The average selling price also saw a modest increase of 1.4%.
Franchise partners seeking brand affiliation
Nathan's Famous has expanded its franchise network, which is a crucial customer segment. As of September 29, 2024, there were 243 franchised locations, an increase from 235 the previous year. The franchise fee income for the fiscal 2025 period was $200,000, a slight decline from $238,000 in fiscal 2024. This segment includes domestic and international franchise partners, with domestic franchise fee income rising to $58,000 from $55,000 in the same period.
Royalties earned from franchises were $2,047,000 in fiscal 2025, down from $2,128,000 in fiscal 2024. Despite fluctuations, the franchise model remains a vital part of Nathan's growth strategy, with the Branded Menu Program contributing $423,000 in royalties.
Retail customers purchasing packaged goods
Retail customers represent another significant customer segment for Nathan's Famous, particularly through its packaged goods available in supermarkets and convenience stores. In fiscal 2025, license royalties from retail sales increased by approximately 14% to $22,412,000 compared to $19,997,000 in fiscal 2024. This growth was primarily driven by a 18% increase in retail volume, although it was partially offset by a 4% decrease in net selling price.
The total royalties earned on sales of hot dogs from the license agreement with Smithfield Foods, Inc. reached $20,605,000 in fiscal 2025, reflecting strong performance in both retail and foodservice channels.
| Customer Segment | Fiscal 2024 Sales | Fiscal 2025 Sales | Growth (%) |
|---|---|---|---|
| Company-owned Restaurants | $5,193,000 | $5,348,000 | 3% |
| Franchise Fees and Royalties | $2,128,000 | $2,047,000 | -5.7% |
| Retail License Royalties | $19,997,000 | $22,412,000 | 12.1% |
Nathan's Famous, Inc. (NATH) - Business Model: Cost Structure
Operating costs of restaurants and franchises
In the fiscal year 2025, restaurant operating expenses were reported at $2,518,000, compared to $2,383,000 in fiscal 2024, indicating an increase primarily due to higher occupancy and insurance costs.
As of September 29, 2024, Nathan's operated 243 franchised locations, up from 235 the previous year. The cost of sales for Company-owned restaurants was $4,980,000 or 52% of restaurant sales.
Marketing and promotional expenses
Marketing expenses totaled $560,000 in the second quarter of fiscal 2025, down from $569,000 in the same period in 2024. The advertising fund revenue, after eliminating Company contributions, was $988,000 in fiscal 2025, compared to $993,000 in fiscal 2024.
Cost of goods sold (ingredients, packaging)
The overall cost of sales for Nathan's Famous increased by approximately 8% to $26,029,000 in the second quarter of fiscal 2025 from $24,187,000 in the second quarter of fiscal 2024. Specifically, the cost of sales in the Branded Product Program was $23,318,000 for the same period.
Food and paper costs as a percentage of Company-owned restaurant sales were 24.2%, down from 27.6% in the comparable prior year period. Labor and related expenses as a percentage of Company-owned restaurant sales were 26.5%, up from 25.3%.
| Cost Category | Fiscal 2024 | Fiscal 2025 |
|---|---|---|
| Restaurant Operating Expenses | $2,383,000 | $2,518,000 |
| Marketing Expenses | $569,000 | $560,000 |
| Cost of Sales | $24,187,000 | $26,029,000 |
| Branded Product Program Cost of Sales | $21,442,000 | $23,318,000 |
| Food and Paper Costs (% of Sales) | 27.6% | 24.2% |
| Labor and Related Expenses (% of Sales) | 25.3% | 26.5% |
In summary, Nathan's Famous, Inc. continues to manage its cost structure effectively while navigating increases in operating costs and commodity prices.
Nathan's Famous, Inc. (NATH) - Business Model: Revenue Streams
Sales from Company-Owned Restaurants
For the fiscal 2025 period, total sales from company-owned restaurants increased by approximately 8% to $9,547,000 compared to $8,851,000 in fiscal 2024. The growth in sales was attributed to higher performance at the Coney Island locations, which saw an increase in average check size, despite lower sales at the Oceanside and Yonkers locations.
Franchise Fees and Royalties
Nathan's Famous operates a franchise model that contributed to its revenue streams through franchise fees and royalties. For the fiscal 2025 period, total franchise fees and royalties decreased approximately 5% to $2,247,000 from $2,366,000 in fiscal 2024. The breakdown of this revenue includes:
- Traditional franchise royalties: $1,599,000 in fiscal 2025 compared to $1,625,000 in fiscal 2024.
- Branded Menu Program royalties: $423,000 in fiscal 2025 compared to $453,000 in fiscal 2024.
- Virtual kitchen royalties: $25,000 in fiscal 2025 compared to $50,000 in fiscal 2024.
As of September 29, 2024, Nathan's Famous had 243 franchised locations operating, which includes domestic and international units.
Licensing Revenue from Retail Agreements
Licensing revenue has become a significant stream for Nathan's Famous. For the fiscal 2025 period, license royalties increased by approximately 12% to $22,412,000, up from $19,997,000 in fiscal 2024. The detail of licensing revenue includes:
- Royalties from the Smithfield Foods, Inc. agreement for hot dogs: $20,605,000 for fiscal 2025 compared to $18,303,000 in fiscal 2024.
- Higher retail volume contributed to the increase, with a 14% rise in volume despite a 2% decrease in the net selling price.
| Revenue Stream | Fiscal 2025 | Fiscal 2024 | Change (%) |
|---|---|---|---|
| Company-Owned Restaurant Sales | $9,547,000 | $8,851,000 | +8% |
| Franchise Fees and Royalties | $2,247,000 | $2,366,000 | -5% |
| License Royalties | $22,412,000 | $19,997,000 | +12% |
The diversified revenue streams from company-owned restaurants, franchise operations, and licensing agreements highlight Nathan's Famous' strategic approach to maximizing income sources.
Updated on 16 Nov 2024
Resources:
- Nathan's Famous, Inc. (NATH) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Nathan's Famous, Inc. (NATH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Nathan's Famous, Inc. (NATH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.