Universities in the US are recognising the quality of brands and bringing more of them on to campus, to complement the university-run catering.
The brands at George Mason University in Fairfax, Virginia, are national restaurant chains like Panda Express, Chipotle, Burger King and Starbucks, as well as Sodexo brands. However, the national brands do best, says Mark Kraner, assistant vice-president of university services, “because the brand recognition is huge”.
He says: “The brands also do a great job with limited-time offers [specials served for a few weeks] that keep things fresh and keep the customer excited about coming in.
“This is too much work for a university or contractor brand.”
Kraner is very careful about which brands he brings onto campus. “I’m looking at the marketplace all the time to determine who is working with the 18 to 24-year olds,” he says. “I listen to the trends and watch the data to see what the hottest brands are, and I visit the restaurants.” He also runs annual surveys with students and asks them where they go out to eat.
Almost all of the brands on George Mason’s campus are licences, which means the university doesn’t own the store and it can be taken away at any time. Franchisees have more rights since they own the store.
Another downside to a licence is that it lasts for five years then often goes to a year-to-year contract. However, there’s not a lot of difference between the two, according to Kraner.
Once he has selected a brand, this then dictates the build-out of the new venue, though the university funds it. At a university like this one, where the foodservice is operated by Sodexo (Kraner is not a Sodexo employee), the contractor then manages it.
There are a lot of meetings about the construction and operation of the upcoming business prior to opening. The operations segment is the last piece and happens about six months before the restaurant debuts. The university is in charge of hiring the staff. Once it’s selected a manager, he or she trains at other stores run by the brand for four to six weeks, then returns to train the other employees.
Kraner works closely with the brands on the operational side, looking at issues such as the hours of operation, marketing and social media (so they can double efforts, combining the brand’s social media with the university’s “so everyone knows we’re working together,” he says).
He also makes his expectations clear up front. He outlines the brand’s responsibilities in any common areas; what charges it has such as heating, cleaning and rubbish collection. “I lay it out at the beginning and have it in writing,” Kraner explains.
An issue that frequently crops up is beverage exclusivity. Universities in the US often sign an exclusive contract with either Coca-Cola or Pepsi. Sometimes, restaurants have their own contracts but are obliged to switch to the university’s supplier, Kraner says: “You have to make sure you have language in your contracts for that. It’s easier for them to switch than for you to jump through the hoops.”
The University of Georgia in Athens, Georgia, has brought in many brands in the past few years.
“We have enhanced our retail offer by bringing in the brands the students are looking for,” says Robert Holden, associate vice-president of auxiliary services. “These students mostly come from bigger areas so recognise the big brands.”
Two of the most recent brands to open on campus are Einstein’s bagels and Caribou Coffee, which are operating as a co-brand – two brands out of one location. Other brands on campus include Panda Express, Chick-fil-A and a Starbucks.
For each of these brands, the university is the franchisee. “We have high standards and want to maintain those standards,” Holden explains, “But some brands don’t like this.
“Panda Express really wanted to operate its location, but we explained that they can’t come on campus and run it for us.”
Brands are important because students trust them, he explains. “We have to make sure we maintain the standards of the brand. If people try to put their own flair into it they lose the consistency and the brand loses customers. Customers want to know that what they’re getting every time is the brand.
“It’s a win-win-win situation,” he explains. “The students know and like the brands, the brands make great sales on campus, and the catering department brings in a brand that has recognition, and all systems in place such as marketing and food prep.
“The back-and-forth process for bringing a brand on to campus can be lengthy,” he admits. “One of the quickest was with Einstein and Caribou, which took about six months from the initial conversations to opening, but 18 months is about the average.”
The reason it takes so much time is the ironing out of the details that work for the university and the brand, including the restaurant design, getting the contract language to suit both parties and construction timing.
Two years ago, when Pennsylvania State University renovated its student union it added several restaurant brands including Burger King, Starbucks, Jamba Juice and McAlister’s Deli.
These have been very well received, says Dave Gingher, director, retail campus dining and catering, and their revenue has far exceeded his expectations.
Here, the brands are a mixture of franchises and licences, with two company-owned stores – Au Bon Pain and Panda Express. Mostly, Gingher says, the differences between a franchise and a licence come down to semantics, but with both, the university pays royalties and in return can use the restaurant company’s logo, copyrights, design and recipes.
The company-owned stores work differently. The brand runs them and pays the university either rent or a percentage of sales, or both. If the brand does well, the income to the university increases, too.
“Our staff is all unionised so it’s not easy for us to outsource labour,” explains Gingher. “Plus, this is our main food-court, so we don’t want to have one brand we operate and one we don’t.”
Penn State also has its own brands, and Gingher says there are pluses and minuses with these, and with the national brands.
“With your own brand, you can change it up however you like, but with a national brand, you can’t. However, with the national brand, the R&D is done for you, as is the marketing, and the standards are already set.”
At the end of the day, he says, brands are what the students like: “They trust these brands and like the consistency. They know what the standard is and have come to expect it. It’s a safe choice.”