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How operators are finding success with branded concepts

Noncommercial dining centers are often filled with their own Starbucks, Burger Kings, Panera Breads and dozens of other nationally recognized brands. Branded concepts, whether corporate brands or self-operated, offer diners familiar names, menu items, and a sense of place. This translates into more money spent and more diner loyalty for foodservice operators.

However, the success of branded concepts vary greatly. There can be significantly different results depending on whether noncommercial operators decide to franchise, lease or develop their own branded concepts. There’s no one-size-fits-all solution, and choosing the best path forward requires thinking and planning.

Whether it’s opening franchises of existing brands, contracting with brands to open branches or creating internal brands, the decision over which path to takes varies from institution to institution. Large public universities might find franchising to be the easiest option, while smaller private schools could benefit from having an external operator take care of a branded concept.

Knowing the audience

Launching a successful branded concept at a noncommercial operation begins with understanding both the audience and the market. According to Abdou Cole, resident district manager for University of Pittsburgh dining services, basic market research is required before they even consider new concepts.

“The brand should provide value to all customers and attract everyone from meal plan holders to those paying with cash or credit,” Cole says. “Additionally, the brand should complement those that currently exist on campus and add to the diversity of options. The sustainable practices of the brand should also be considered due to the growing demand for sustainability on college campuses.”

Because University of Pittsburgh is an urban university, space is at a premium. This means that in addition to the menu mix, operators also have to consider maximizing value and efficiency out of any new concept.

Other factors matter, too: Jon Barzensky, general manager of Champlain College dining services, recommends paying close attention to a brand’s service and turnaround time before committing. A brand with 10-minute service times will be a bad fit for a campus where students or employees only have 15 minutes free to grab a bite to eat.

Changing tastes should be taken into account as well. At Penn State, a massive public university serving tens of thousands of students, foodservice directors keep a close eye on how students and faculty treat different branded concepts.

The first branded concepts came to Penn State’s campus 20 years ago when Sbarro, Chick-fil-A and Panda Express opened branches. Since then, their offerings have shifted to include Au Bon Pain, Burger King, Jamba Juice, Starbucks and a number of self-branded offerings. Penn State opted to concentrate the bulk of their branded concepts in the Hub, a dedicated food court.

“Times change, trends change and needs change,” says David Gingher, Penn State’s director of campus retail dining.

Finding the right fit

Campuses typically have a mix of external branded concepts and internally developed concepts.

At Liberty University in Lynchburg, Va., identifying potential partners is followed by an in-person evaluation. Duke Davis, general manager for Sodexo at Liberty University, recommends bringing brands to campus for evaluations by students, as well as by foodservice staff.

“If there is a food concept brand that fits our campus need, we reach out to them and bring them on campus for a tasting promotional demo to gain student feedback,” Davis says. If Liberty is looking for a specific type of cuisine or concept and cannot find an external partner to fulfill that need, the team creates an internal concept.

Depending on the circumstances, an operation has to decide whether to become a franchisee of the outside brand, or lease the space to the franchisor or another existing franchisee. Choosing the right option rests on a number of factors including budget, internal capacity, dining services experience and existing agreements.

At Penn State, for instance, Sbarro was opened as a franchise and run by the university. However, Gingher’s team opted to rely on Panda Express to operate its Penn State location, leasing the space to the national brand, with Gingher serving as the contract administrator. They decided, after speaking with several other universities, that outsourcing the restaurant’s operation would better serve their needs for Panda Express’ model.

Done correctly, bringing in external food concepts can have a positive effect on sales. The University of Pittsburgh opened a branch of Burrito Bowl, a burrito/rice bowl/smoothie concept targeted at college campuses, in 2016. Sales at the unit have increased 60% since its opening due to its location near a campus sports complex and offerings of post-workout smoothies.

Implementing concepts

Once a potential branded concept is selected, the next step is bringing it in. This requires a careful mix of planning, negotiation and implementation.

Penn State’s Gingher notes that the contractual stage is crucial for foodservice operations.

“(Operators should) take their time and go through it piece by piece and make sure that they redlined things and go back and negotiate things,” Gingher says. “The contract that they give to you is kind of a standard boilerplate; [operators] need to go back, work through it and make sure it works for them, their university and their foodservice operation.”

Contracts for branded concepts include restrictions and clauses in many cases, and it’s important for both parties to agree on a mutually beneficial contract. In many cases, contracts include exclusive campus or building rights or first right of refusal clauses.

When drafting and negotiating contracts for branded concepts, it’s important to keep future needs in mind. Because contracts may last for five years or more, small details may lead to diner dissatisfaction or business complications down the road.

Foodservice teams also need to remember that branded concepts vary in their operational capacity. Starbucks, for instance, has dedicated divisions for the college and university, healthcare and government markets. Large foodservice providers such as Aramark and Sodexo typically have relationships with a host of existing branded concepts as well.

At the other end of the spectrum are local and smaller brands that may be eager to establish noncommercial partnerships, but don’t necessarily have experience in the field. Ensuring success with these concepts may require a bit of extra hand-holding and oversight.

Continued operations

Branded concepts aren’t turnkey solutions and require considerable oversight. Coffee shop locations in hospitals have to deal with customers with extremely limited dining time, and college and university burger stands can be swamped in between classes.

In order to ensure quality service and diner satisfaction, foodservice teams need to work with franchisees, external operators and other stakeholders to guarantee things are working as they should.

Typically, large national brands conduct inspections and generate reports of noncommercial locations every few weeks. The upside of this is that quality is continually monitored; the downside is that operators don’t get any notice if something is off until it’s too late. This means that operators should be particularly proactive in monitoring branded concepts in order to recognize any potential issues as soon as they occur.

Diner expectations also evolve over time. At Hofstra University in Hempstead, N.Y., the university and dining services provider Chartwells embraces diner expectations by having students vote on which branded concepts come to campus.

It’s also important to let change in branded concepts take place. When Penn State replaced Diversions, a gelato shop and bakery concept, with a grilled cheese restaurant called the Grate Chee in 2016, the new concept saw an uptick in sales and patronage due to its novelty.

The keys to success

When diners see a Panera or Jamba Juice in a noncommercial setting, they instinctively identify the location with the parent brand and not the dining services organization that oversees it. This is an important distinction to understand: To customers, the Starbucks on campus, for example, is competing with the Starbucks that is a five-minute drive away and completely unaffiliated with other campus dining options.

Finding the right mix of branded concepts is an ongoing process. At Champlain College, for instance, Barzensky found that self-branded concepts were the right fit for the school’s diners.

“The most important thing to consider is listening to the needs of your client as well as your guest,” Barzensky says. “Our students were looking for more customization and value, so we decided that internal brands were that best way to achieve those results. This gives us flexibility in concepts as well as a greater ability to add value through our menu mix.”

The market for branded concepts is continually changing and varies across campuses, geographic regions and budgets. Finding the right mix takes time, but it offers a lot of dividends.

Photo courtesy of Starbucks

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