Taco Bell or McDonald’s may have instant recognition with customers, but many operators have found value in using manufacturers’ branded foodservice concepts, citing cost savings, variety and the ability to offer the cachet of branding in locations that can’t support a national franchise.
Such options can create a win-win situation, generating increased activity and buzz along with a measure of control and flexibility not found in traditional franchises.
At Sanford Health Center, Sioux Falls, S.D., for example, Nancy Geffre, director of nutrition and foodservice, celebrates a year’s operation this summer at Dakota Food Court with manufacturers’ branded concepts.
Sanford expanded its foodservice options beyond the original cafeteria, dating to 1973, that operates almost around the clock, seven days a week.
Dakota, in contrast, is open five days a week for breakfast and lunch but has expanded business to the other side of the campus and raised the transaction check average. “The average check is $1 higher there, at $3.20,” Geffre says.
She says she chose manufacturers’ branded concepts for their variety, and it is paying off. “Dakota has five different stations and an outside patio. It gives us control. If we don’t care for something, we don’t sell it,” she says.
The hospital also developed its own salad bar for the food court where 1,000 customers are served daily.
The SmashHits Deli is the most popular concept with wraps, soups, sandwiches and fresh-baked cookies plus a new “Phat Burrito”. C-Street Cafe serves specialty coffees, bakery items and smoothies. Hot Stuff Foods on the Go with personal-size and 14-inch pizzas, and Hot Stuff Grill serving burgers, hot dogs, fries, grilled or fried chicken sandwiches and chicken strips, round out the stations.
For Al Stridiron, vice president of brand management for Sodexho’s healthcare division, “a manufacturer’s brand lets us get everyone involved. For example, where healthcare foodservice is 24/7, you can use the grill for breakfast. You can’t do that with a national brand. You also get help with start-up, training, pricing and installation, all on a no-cost basis.”
For smaller accounts, he adds, operators get the benefits of a brand name, professional packaging, uniforms and merchandising. Speed scratch products reduce prep time and labor costs while offering consistency, he adds.
Sodexho operates several manufacturers’ branded concepts in numerous accounts, and Stridiron is exploring a partnership that would bring a Tex-Mex concept into the mix. “We’d also love to see a salad bar concept,” he continues.
At Drake University in Des Moines, Iowa, General Manager Sarjit Singh finds such concepts “very good to work with.”
Last year, to update a pizza and subs unit, Singh talked to a manufacturer who “doubled volume in the same space, put in a second register, and added booths as well as new products at their expense.” The school serves 1,500 meals a day and attributes 40% of sales to the branded concept.
Singh would like to find Mexican, Oriental and burger concepts, noting that the manufacturers’ branded concepts offer better profitability without the expense of royalties or fees.
The U.S. Navy “always explores new options,” says Marlin Ruhl, management analyst for the Navy’s food and beverage division, who uses several iterations of the C Street Cafe in various locations. “These concepts work well in places without enough infrastructure for national brands or the ability to do a half million dollars a year,” he says. “Profit is not our goal. We’re about quality of life for our sailors and their families.”
The Navy operates numerous manufacturers’ branded concepts such as Sunset Strips and Rocky Colletti’s Pizza. “Ask a sailor and he’ll probably want a Taco Bell or Burger King. But we can’t always find a franchisee and if the volume is low, it’s difficult for them to make the profit they’d need,” says Ruhl.
But manufacturers’ branded concepts can “fulfill market demand,” he continues, in markets that can’t support a national franchise. “They offer lower capital cost, no fees or royalties, proven products and marketing support.”
For Gary Gasper, director of Union Food Services at Rochester (N.Y.) Institute of Technology, Ancho Grill answered his quest for a Mexican concept. “I wanted something I could offer daily that was done right,” he says. “The first year it brought in 800 more customers a week to a small unit open weekdays. We had terrific response. I would do more that fit our mix.”
The concepts, however, aren’t for everyone. Joe Pawlak, vice president of Technomic, Inc., a foodservice research firm, points out that “operators tell us they want to promote their own brands or are developing proprietary brands to differentiate from the competition. Also, they only have so much room for manufacturers’ brands. Otherwise, they say their operations look like ‘billboards’ promoting manufacturers.”
At SUNY Potsdam, Director of Dining Services George Arnold uses only in-house concepts but would consider a manufacturers’ branded unit for the future “if it fit with the mix. They give the halo of branding without the royalties,” he says, noting that the university had an Asian manufacturers’ branded concept, Terri Yaki’s, in the late ’90s that “worked well for us.”
SUNY Potsdam “moved away from that concept,” he adds, but found the idea of manufacturers’ branded units “viable.”
At Boston College, director of dining Helen Wechsler says her “very talented group usually comes up with its own concepts” and spends a lot of time researching and benchmarking.
Michael Floyd, food service director at the University of Georgia, is another operator who says that “typically, we find we can do it better ourselves.”
Similarly, at Bucknell University, John Cummins, general manager of dining services for Parkhurst Dining Services, notes: “We’re all about fresh food as opposed to prepared foods.”
However, other institutions such as Southern Illinois University, Edwardsville, offer manufacturers’ and national branded concepts as well as in-house operations. “We do a combination,” says Francine Polich-Burns, foodservice administrator.
The blend of all three options also works well for Appalachian State University in Boone, N.C., says Food Services Director Ron Dubberly. “We have some national franchises and some in-house concepts plus a manufacturer’s branded Stone Willy’s Pizza,” he says.
With a manufacturer’s branded outlet, the profitability is “similar to or maybe a little less than the in-house concepts,” Dubberly adds. “Some of our students perceive it as a franchise. We get a package deal with the logos, pre-printed cups and napkins, the whole shebang. It works out really well for us. You need a good blend of all three.”
At the University of Nevada, Reno, Russ Meyer, associate director of housing operations and dining, is also operating a mix with national and regional chain concepts, a manufacturer’s branded concept and a Mexican unit contracted to a local restaurateur.
The manufacturer’s concept, Bonici Brothers Pizza, has been in operation for four years and “works out very well,” he says, because of the product consistency it offers as well as assistance with “the look and the marketing without our having to pay royalties or licensing fees.”