Family ties fuel 40 years of business for the Kolache factory

Dawn Nielsen started working at her parents’ bakery, the Kolache Factory, at the age of 9, helping scrub the floors. At 12 she started serving customers. Now, 40 years after her parents opened the first location in Houston, there are 60 locations in nine states, and Nielsen is the chief operating officer.

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

“For many years, it has been a labor of love to grow Kolache Factory from our small shop on the corner of Westheimer and Gessner in Houston to what it is today…” said President and Founder John Banks. “I attribute much of the recent growth to my daughter, Dawn, who, as Chief Operating Officer, has helped keep the Kolache factory fresh and current.”

The colache was introduced to America in the 1850s when Czech settlers came to Texas. Traditionally, the pastry is filled with fruit, but Czech Texans popularized varieties with meat. However, the Kolache Factory has pushed the boundaries of traditional fillings, creating flavors like bar-b-que brisket, pepperoni pizza, sausage, jalapeno, and cheese.

Every year, the brand hosts a “Kolache Olympiad” to add new flavors to the menu, says Nielsen.

“We’ve had some franchises that have come up with some great flavors,” she says. “In fact, the sausage and gravy flavor was submitted many years ago by a franchisee who is no longer with us and is one of our best sellers. It’s always great to have new people and perspectives, especially from different regions, to bring something new to the table.”

The brand has weathered many recessions, most recently during the COVID-19 pandemic. Though Kolache struggled initially — Nielsen waived franchisee royalties for six months — it bounced back in 2021 with its best-ever sales.

“I call it the pandemic-proof food,” says Nielsen. “Our model from day one in 1982 was Grab and Go; to get our customers in and out of the store within two minutes.”

This grab-and-go model worked well for customers who have embraced the pastry as their breakfast meal — most of Kolache’s sales occur between 7 a.m. and 10 a.m., giving it the boost it needed to succeed, while many others did Foodservice businesses were struggling.

Nielsen says that while morning is Kolache’s bread and butter, times are changing. As consumers’ schedules become more flexible due to remote working, they can visit businesses later in the day.

“They can come when they want instead of having to be at work by eight,” says Nielsen. “But it’s still mainly breakfast, depending on the region of the country. In the Midwest, we have a big hit for breakfast and then another big hit for lunch, so it’s interesting to see how it pans out as it moves outside of Texas.”

Kolache began franchising in 2000 and currently has 32 franchised locations in addition to its 28 corporate stores. Nielsen says the company approaches different markets in different ways, depending on how familiar the population is with its product. Of course, places like Nebraska and Texas, where large populations of Czech settlers arrived in the 18th century, are more familiar with the product. In places where the Kolache is relatively unknown, the brand must rely on marketing and education.

“We really encourage our franchisees—because they’re primarily the ones opening out of state—to drop off Kolaches at their local auto dealerships or medical centers and really get involved in the community,” says Nielsen. “The recognition that we have is largely because of all the donations we make to local charities or fun runs – we’re putting the product in people’s hands because as soon as they bite it, they get it.”

That loyalty will translate into a new rewards program launched in October alongside a mobile app. According to Nielsen, the new program offers incentives for customers such as earning points to receive free items. The app is connected to Kolache’s loyalty program, email and online ordering, which optimizes the customer experience.

Mobile quick-service apps have become increasingly important since digital was catapulted to the forefront of everyone’s minds at the onset of COVID-19. The top 10 of these were Downloaded 10.3 million times in August.

“Now everything is under one roof, which is great for me because you’re dealing with one company and not four companies,” says Nielsen.

In celebration of its 40th anniversary, the Kolache Factory had a month of promotions in September, culminating in 40-cent Kolaches to mark the actual anniversary. Looking ahead, Nielsen says she’s excited to continue watching the brand grow — there’s franchise interest in places like California and Florida.

More than anything, the Kolache Factory continues to focus on family in their business. Nielsen’s daughter, who has a degree in marketing, is coming on board next year.

“I look forward to her taking on some of my roles; to have a younger person’s perspective,” says Nielsen. “I am very happy about it.”


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