Family ties fuel Kolache factory’s 40-year business

Dawn Nielsen started working at the Kolache Factory, her parents’ bakery, when she was 9, helping scrub floors. At 12, she started waiting for customers. Now, 40 years after her parents opened their first store in Houston and 60 in nine states, Nelson is chief operating officer.

Nielsen’s parents, John Banks, and his late wife, Jerilyn, started the bakery to meet the need for a quick, fresh breakfast on the go. The answer is kolache, a Czechoslovakian pastry filled with fruit, meat and cheese.

“Over the years, the Kolache facility has grown from our small store on the corner of Westheimer and Gessner in Houston to what it is today…” said John Banks, President and Founder. “I attribute the recent growth to my daughter, Dawn, who, as COO, helps keep Kolache Factory fresh and on the cutting edge.”

The kolache was introduced to the United States in the 1850s when Czech settlers came to Texas. Traditionally, pastries are filled with fruit, but the meat variety made by Czech Texans is popular. However, the Kolache factory has pushed the boundaries of traditional fillings, creating flavors like bar-b-que brisket, pepperoni pizza, sausage, jalapeno and cheese.

Nelson said the brand hosts “Kolache Olympics” every year to add new flavors to the menu.

“We have quite a few franchises and they all come up with some great flavors,” she said. “In fact, the Sausage and Gravy flavor was submitted years ago by a franchisee who is no longer with us and is one of our number one sellers. It’s always great to have new people and new perspectives, especially from Something new in a different region.”

The brand has endured multiple recessions, most recently during the COVID-19 pandemic. While Kolache struggled initially — Nielsen waived six-month royalties for franchisees — it recovered to its best sales year on record in 2021.

“I call it pandemic-proof food,” Nelson said. “From day one in 1982, our model has been grab-and-go; getting our customers in and out of the store in under two minutes.”

This grab-and-go model is ideal for customers who have pastries as their breakfast item of choice—the majority of Kolache sales happen between 7am and 10am. It also translated into curbside pickup and delivery during the pandemic and gave the brand the boost it needed to succeed at a time when many other foodservice businesses were struggling.

Nelson said that while mornings are Colache’s bread and butter, times are changing. Consumers’ schedules have become more flexible thanks to remote work, and they can visit businesses later in the day.

“They can come in when they choose, instead of going to work at eight,” Nelson said. “But depending on the region of the country, it’s still mostly breakfast. In the Midwest, we’re going to be a big hit for breakfast, and then a big hit for lunch, so see how it evolves outside of Texas It’s fun.”

Kolache started franchising in 2000 and currently has 32 franchise stores in addition to 28 corporate stores. Nielsen said companies approach different markets in different ways based on how familiar people are with their products. Places like Nebraska and Texas, where large numbers of Czech settlers arrived in the 1800s, are naturally more familiar with the product. For the relatively unknown area of ​​kolache, brands must rely on marketing and education.

“We really encourage our franchisees — because they’re mostly franchisees that are operating out of state — to send kolaches to their local auto dealership or medical center and really get involved in the community,” Nelson said. “The first way we get recognized is because of all the donations we make to local charities or fun runs – we put the product in people’s hands because once they bite it, they understand it.”

This loyalty will be transformed through the launch of a new rewards program in October, as well as a mobile app. According to Nielsen, the new program will offer customers incentives, such as earning points for free items. The app simplifies the customer experience by connecting to Kolache’s loyalty program, email and online ordering.

Since digitization was pushed onto everyone’s mind when COVID-19 started, mobile apps for quick service have become increasingly important.The top 10 of which are 10.3 million downloads in August.

“It’s great for me now that everything is under one umbrella because you’re dealing with one company instead of four,” Nelson said.

In honor of its 40th anniversary, the Kolache factory ran a month-long sale in September, culminating in a 40-cent kolaches on the actual anniversary. Going forward, Nielsen said she’s excited to continue to witness the brand’s growth — with strong interest in the franchise in places like California and Florida.

Most importantly, the Kolache factory continues to operate with a family in mind. Nelson’s daughter, who has a degree in marketing, will join next year.

“I was expecting her to play some of my roles; having a young person’s point of view,” Nelson said. “I’m very excited about it.”

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