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Chapter 1: Why are there multiple Wetzel's Pretzels locations at the Atlantic Avenue-Barclays Center Station?
This week on NPR's Newsmakers, Maine Senate candidate Graham Plattner, a working class Democrat leaning into one message, that the political system is rigged to favor the wealthy.
There's only one direction we need to be pointing fingers, and that is up. It's not left and right.
Can that message help Democrats take the Senate in this year's midterms? Graham Plattner, this week on NPR's Newsmakers. Watch or listen wherever you get podcasts.
This is Planet Money from NPR.
A few months back, Planet Money got a little economic bat signal from our friends over at the podcast Hyperfixed. Hyperfixed is hosted by one of my longtime favorite radio heads, Alex Goldman. He was previously one of the hosts of Reply All. And for each episode, Hyperfixed takes on listener problems, big and small, and sets out to solve them.
Yeah, we get questions as small as a listener said, hey, my favorite bakery shut down and now I can no longer get the cake that I love. So we got Claire Saffitz, baker extraordinaire, to help us figure out the recipe.
Love that question.
And we also get questions like, should I have children? Which, as you might imagine, is a more difficult question to answer.
Yeah, that's a bigger, scarier one. But thank you for looking into it.
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Chapter 2: What unique challenges do franchisees face in high-traffic areas?
Let me do this one. Let me ride. Hello and welcome to Planet Money. I'm Alexi Horowitz-Ghazi. And I'm Alex Goldman. I think we've all had those moments of looking around the world and all of a sudden you'll be surrounded by three Starbucks on a given street or a handful of McDonald's lining the halls of an airport terminal.
Sort of feels like you're watching the ebb and flow of some titanic corporate battle you can just barely see. So when Jed flagged for us three Wetzels all within spitting distance of each other, we knew there was some bigger story under there.
So today on the show, we go deep inside the pretzel supply chain to find out how Wetzels took over this subway station. We'll hear of one man's journey to his own salty American dream, learn about consumer behavior and how franchises work. And of course, there will be plenty of twists along the way.
NPR's newest podcast is where you can find NPR's biggest interviews. I'm Steve Inskeep. The program is called Newsmakers. We talk with some of the most powerful and influential people at this moment to put real questions to them and push for real answers. Follow Newsmakers on the NPR app or any podcast player, or you can watch on NPR's YouTube channel.
Okay, so for today's episode, we're going to hit play on that hyperfic story based on my little reporting journey in just a minute. To set things up, I set out to untangle Jed's pretzel-based mystery and then hand it over that reporting to you, Alex, and your team to put the episode together. Which worked out great for me because you did all the hard work. You know, I love that for you.
Yeah.
And I began my quest in maybe an obvious place by calling up Wetzel's Pretzels corporate. And that is how I met a jovial man named John Fisher.
When people say, what's your job? My job is to bring pretzels to the people. I even have a wristband on that says pretzels to the people. It's like kind of our mantra, like... Wherever there's people, there should be pretzels.
John retired just last month, but when I spoke with him, he was the head of development for Wetzel's Pretzels, which means it was his job to help the company's franchisees find and build successful locations. And that mantra, it's not just a catchphrase. It's kind of a shorthand for Wetzel's business strategy. It also holds part of the answer to Jed's questions.
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Chapter 3: How does Wetzel's Pretzels' business model differ from other franchises?
You know, whether it's a subway or a theme park or a... a stadium, you're going to have different locations based on where the people are to service them. And so not a lot of businesses can do that.
One of the other big factors undergirding this model is that corporate Wetzels will not let different franchisees open storefronts under the same roof. So anytime you see a cluster of Wetzel's pretzels in the wild, know that every storefront under the same roof is owned by the same person. They aren't actually competing with each other.
And any cannibalization that's happening has been at least partially planned. Also, some franchisees will open additional locations in the same space just to make sure that those spaces don't get taken by the competition. So these clusters function more like a defensive mapping sort of strategy. The other big thing is that the company gets final approval on all franchise locations.
And because they've had the most success in malls and transport hubs and event spaces, that's where most of these clusters will be.
So in this case, it's like, okay, these locations may seem to a layman like me walking through being like, why would you possibly have these two pretzels stand so close to each other?
Well, the proof is sort of in the profits. I think you have to look at every concept and what works for that concept, where they are on that. I'll call it the destination impulse spectrum. Yes. And if you're on the very high side of the impulse spectrum, you probably can get away with having several locations very close to each other. to capture the traffic.
And if you're on the other side of that spectrum, you probably don't want to think about doing that. It'd probably be a lot of cannibalization and not really work. Yeah.
So now we know why these locations are clustered so close together. That is to say, we know why they're there in theory. But we still wanted to know if this strategy was actually working in the Atlantic Barclays Station. Were the three storefronts actually making money? And we knew just who we had to ask. After the break, answers from the man behind the Atlantic Avenue Wetzels.
It's June and another big week in the run-up to the midterms. Primaries in half a dozen states, including California, where new congressional maps are in place and a chaotic race for governor is wide open. We're also following gas prices and Iran. So far, talk of a peace deal is just talk. We'll keep you posted. Listen every morning, up first on the NPR app or wherever you get your podcasts.
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Chapter 4: What role does impulse buying play in Wetzel's Pretzels' strategy?
to Bangladesh back in the early 90s, Ricky worked a series of odd jobs. But in his heart, there was always one goal, to have a business of his own. So Ricky opened a liquor store, which failed miserably. Then he started a business that sold painted hermit crabs from kiosks at the mall. And that one worked out pretty well. But he wanted something that felt more permanent.
And that's when he started looking at franchises. Pretzels aren't like a big thing in Bangladesh. But his years in the United States taught Ricky that Americans love hot dogs. So he opened this Wetzel's in 2004. And within a year and a half, he opened a second location right here in the same mall.
Within a year and a half, I opened the second location on the first floor. And that took a hit on this one a little bit. 10, 15% business dropped from the first location. But within six months, it came back. Whatever the business I was doing on the first location, it came back. Second location is doing its own business. And I think within another few years, I was able to open another location.
And in a few years, another location. So yeah, I mean, goal was to open at least one location every other year or whatnot. How many of you opened in total? 17 locations, combined east and west.
So 17 locations. I mean, that sounds like a little pretzel empire.
So far, so good.
And when did you get a sense that getting into the dough business might eventually translate into rolling in the dough?
You know... But how do you make sure that a location is right?
How do you decide if a mall can support a second storefront? Or if a subway slash mall can support three?
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Chapter 5: Are the Wetzel's locations competitors or collaborators?
And technically, they were only about 100 feet from one another. But because they were inside the subway station, they could do something that the mall location couldn't, cater to commuters directly. Ricky didn't really want to take on both locations, but it was an all-or-nothing deal. So Ricky took both, and his fortunes began to change.
Those two satellite locations actually helped me to stay in the business within this mall because upstairs, main location, I'm still suffering.
So the idea to expand to the other locations was kind of to offset the losses that were happening in the main one in a way?
Not exactly, to be honest with you. My thought was upstairs, that's where I bake my goods. Since I bake it, Those two location, I don't bake anything. I don't make anything. I take the food from upstairs and I just sell it over there. So since I have, it's like a commissary. Let's put it this way. Since I have this facility, let's open those two location. It will be less labor.
It's gonna, because I run those two with one person each location. Everything else comes from upstairs. A to Z pretzel, the lemonade and you name it, the frozen drink and the soda. Everything comes from upstairs.
What Ricky's saying is that unlike almost all the other Wetzel's properties he owns, the Atlantic Barclays cluster is actually so close together, he can run three locations out of one kitchen, which drastically reduces his operating costs, or at least his cost per location.
Also, even though these satellite locations are physically close together, because they're on different platforms, they're actually serving different groups of customers. So no matter which way you're moving inside the Atlantic Barclays station, you're going to pass one of Ricky's Wetzel's pretzels.
So maybe just to boil down the question, I think the listener's question was, you know, passing through the Atlantic terminal was how could it possibly be like make economic sense to have the same business so close to each other in the same space? What's the kind of like boiled down answer to that question?
Answer to this is the both location has its own customer. Yes, there are some spillover from the first floor to the second floor, but each location has its own customer.
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Chapter 6: How does foot traffic impact the profitability of Wetzel's Pretzels?
Every week, they follow listener problems big and small into all sorts of strange rabbit holes. I recently liked Desperately Seeking Sjogren about a mysterious band with unknown origins.
Hyperfixed is produced and edited by Emma Cortland, Amore Yates, Sarisofra Sukenik, and Tori Dominguez-Peake. The music is by the mysterious Breakmaster Cylinder and me. It was engineered by Tony Williams. Fact-checking by Naomi Barr.
The Planet Money version was produced by Sam Yellow Horse Kessler and edited by Jess Jang. It was engineered by Robert Rodriguez. And Alex Gold Mark is our executive producer. I'm Alex Gold Man. And I'm Alex E. Horowitz-Gazi. This is NPR. Thanks for listening.
The surreal horror film Back Rooms is a smash. The director is a 20-year-old YouTuber and it's based on his popular web series. Why is this online phenomenon taking off at the box office? We get into it on NPR's Pop Culture Happy Hour. Listen via the NPR app or wherever you get your podcasts.