HenDough Chicken and Donuts
HenDough Co-Founders Paul and Sarah Klaassen
1851 Franchise: What is the concept behind HenDough? How did it start?
Paul Klaassen: I started in the restaurant industry as a teenager, working my way up from dishwasher to cook at an Italian restaurant in North Carolina. I attended culinary school, worked at several high-end restaurants and eventually ran a hotel in the Virgin Islands. I came back and started working at the Biltmore Estate in Asheville, North Carolina as a chef. That is where I met Sarah, who was working as a pastry chef at the time. We eventually got married and settled in Hendersonville. After we had our son a few years later, we decided the corporate lifestyle wasn’t working for us anymore. We wanted a career that would offer a more flexible lifestyle and allow us to spend more time together as a family.
Sarah Klaassen: I started working in restaurants as a teenager, went to culinary school and ended up at the Biltmore for seven years as a pastry chef. I went back to work there after we had our first son, but I knew right away the busy lifestyle and demanding hours weren’t going to work for us.
Paul: We decided to open our own restaurant business, and since we had worked in upscale establishments for so much of our careers, we were ready for something fun. The customers at the Biltmore were mainly tourists, so we weren't really able to build long-lasting customer relationships. We wanted to do more than just feed people — we wanted to get involved with local organizations and see the same faces everyday.
So, we found a unique restaurant space in Hendersonville that would be perfect for a fun, casual dining concept. In 2016, we came up with the idea of opening a donut shop that also offered fried chicken as a way to combine my cooking expertise with Sarah’s background as a pastry chef. I’d fry the chicken, and she’d make the donuts. Three months later, the first HenDough opened in March of 2016.
The response to our opening was shocking. Very few restaurants offer the combination of chicken and donuts, so we weren’t sure how customers would react. As we geared up for opening and spread the word, we really started to feel the momentum build in the area. The first day we opened, we were out of food by 1:00 p.m. We even ended up cutting out dinner and focusing solely on lunch and breakfast because we couldn’t keep up with the demand.
After seeing the success of our Hendersonville locations, we decided to open a second location in a food hall in Greenville, South Carolina. My dad, who was maybe one of our biggest critics when we first started, saw our success and said we had to franchise the concept. We knew the HenDough concept was ready to grow, but we realized we didn’t have the bandwidth to continue opening new locations by ourselves, especially after running into some complications with the second opening. Plus, customers repeatedly came in and asked us about franchising, so we decided to start putting together a FDD in late 2019 but had to halt the process during COVID-19. Now, after seeing the resilience of the business model over the past year, we’re excited to move forward and open up the HenDough brand to franchising.
1851: What sets HenDough apart in the restaurant industry?
Paul: There are fried chicken restaurants everywhere and donut shops everywhere, but there are very few places that do both as well as we do. Customers can treat HenDough like a donut shop in the morning and can then come back and enjoy a totally different meal for lunch and dinner. Since opening, we’ve been highlighted in several publications, and we were even recently featured on the cover of a local print magazine.
1851: What makes Hendough a strong franchise opportunity?
Paul: For one, our unique concept means prospective franchisees don’t have to worry about competition in the sector. There is really nothing like HenDough.
In addition, the proven business model means franchisees have the opportunity to tap into strong-unit level economics. The first year we opened, we exceeded our expectations in revenue by 50%, making $450,000 in revenue instead of our projected $300,000. Both HenDough restaurants have been growing revenue at about 10% year-over-year now.
Another thing that sets HenDough apart is our commitment to partnering with local vendors, businesses, breweries and dairy farms to source our quality products. We may expand those partnerships for franchisees or will help them find vendors in their own area, but either way, the business model offers a unique opportunity for entrepreneurs looking to support their local community.
When it comes to real estate, HenDough franchise owners won’t have to conform to normal standards. We’ve succeeded in a 100-year-old converted house and a food hall location made out of repurposed shipping containers and modular units, so we know how to handle any and every issue franchisees may run into with nontraditional sites. We want to keep real estate costs affordable but also retain the cool personality of the brand. In the long term, we may lease out real estate in a similar model to McDonald’s.
Sarah: Our goal is to open another HenDough location in the Greenville area and use it as a flagship store where the first few franchisees can come to check out the concept, attend Discovery Day and go through a comprehensive, hands-on training program.
Paul: HenDough ownership also offers attractive lifestyle benefits. When we moved to the Greenville area as a way to be closer to the second restaurant, it turned out to be a trial run in whether or not the HenDough concept could succeed without requiring a daily presence. Our success is a prime example of how HenDough’s business model creates a flexible work-life balance.
Sarah: Ironically, we’ve had the most time off together since starting our own company. We realized we could step back and the restaurant would continue to run smoothly — our team allows us to focus on growth instead of making donuts everyday.
1851: What were some of HenDough’s major accomplishments over the past year?
Paul: Despite the pandemic, our Hendersonville restaurant had its best sales year yet in 2020. When the COVID-19 pandemic hit, things were very difficult in the beginning, but we were able to successfully pivot and saw a booming demand for takeout business. Currently, our Greenville location is strictly takeout service, and Hendersonville is operating at around 75% takeout service.
We also took the downtime of the pandemic to remodel our Hendersonville restaurant in January. We had a chimney removed through two levels, opened up the inside of the building to promote social distancing, converted a side window into a takeout window and grew our outdoor seating 70%. Dinner has also always been a part of the plan, but we didn’t have the time to make it work. So, we made the commitment to shut down, make the investment and create a dinner menu. We also own a popular burger restaurant in the Greenville area, so we knew adding burgers to the HenDough model could be successful.
After the remodel, we reopened the Hendersonville dining room at about 70% capacity. With the addition of dinner and burgers, we expect to see a 25% to 30% growth in revenue in 2021. As we emerge from the pandemic, we predict we will be back at 80% to 90% on-premise business soon.
Sarah: Most of our guests come in and order a donut at the counter after seeing our display case. After trying one, they will usually order a box of donuts to take with them when they go, so on-premise is our preferred service.
1851: What are the goals for the brand in 2021 and beyond?
Paul: In the next five to 10 years, we hope to open one or two new corporate stores, as well as double our footprint every year through franchising. To start, we’ve identified a few markets in the Carolinas primed for growth and predict the area could have room for eight to 10 stores. Other target markets include Florida, Georgia and Tennessee due to the reasonable proximity to the established locations.
1851: Who is the ideal HenDough franchisee?
Paul: The ideal HenDough franchisee is someone who is heavily involved in their community and able to go with the flow and be flexible. For the first few locations, franchises should have some experience in the restaurant industry and be willing to be part of the day-to-day operations. We are looking for single-unit operators to start, who will hopefully be able to evolve into multi-unit owners and territory development moving forward.
The total initial investment required to open a HenDough restaurant is $205,500-$643,500 (multi-developmental initial investment $235-500-$778,500). The initial franchise fee is $30,000 for one establishment and $15,000 for each additional restaurant. For more information, visit: https://hendough.com/franchise/