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Brands study up on student tastes


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The captive audience of students and faculty at college campuses has long been viewed as an attractive target market. That niche is drawing even more interest these days thanks to a new class of millennials.

“We have certainly seen the demand increasing for locations in and around college campuses, particularly over the last five to seven years,” says Robert Stidham, president and chief development officer at Franchise Dynamics, a consulting firm based in Homewood, Illinois.

Although enrollment has declined slightly in the past two years, the numbers are elevated compared to historical levels. The total number of college students enrolled at two-year or four-year colleges, as well as graduate schools, totaled 19.2 million during the 2014-15 school year, according to the U.S. Census Bureau.

Traditionally, students have relied on the campus food plan or fast and cheap choices like spaghetti and mac & cheese to make it through college. That is not the case with today’s students. Today’s class of millennials is showing a bigger appetite for dining out, and they are more discerning in their food choices, says Stidham. In particular, students have a preference for fast-casual concepts that offer high-quality food at a reasonable price point.

Top college towns

Top college towns

Source: Abodo

Although high demand for space around campuses has resulted in real estate options that can be both difficult to find and expensive, the effort to find locations that work is well worth it to brands such as Blaze Pizza. Blaze Pizza has 17 out of its 112 stores located near college campuses with more in the pipeline for 2016. The Blaze Pizza concept works for lunch and dinner, and it also pulls in late night business from the college crowd.

“We love that we pick up that third day part. That helps our restaurants to be quite successful,” says Jim Mizes, president and COO of Pasadena, California-based Blaze Pizza. Blaze Pizza is working on opening locations near Arizona State University, Drexel University and Texas A&M, among others.

The expansion of recognized brands and a broader array of choices on college campuses is following a similar trend in other non-traditional venues, such as airports, says Brian Spindel, co-founder and COO of PostNet International in Denver. “Today’s airports have amazing variety of shopping, products, services and food, and we see the same movement on college campuses,” he says.

In December, PostNet opened a new franchise location on the campus of West Virginia University in Morgantown. “This is our first location on a major college campus,” Spindel said, and the brand plans more.

While some brands are finding space on campus, others are targeting near-campus locations, especially around key points for people entering and leaving campus, as well as near off-campus student housing. “In general, anywhere students are congregating in large quantities adjacent to college campuses, all of those locations have become extremely desirable,” says Stidham.

Blaze Pizza typically targets locations that are just off campus in commercial or business areas where there are other restaurants or draws such as a movie theater that attract students, faculty and members of the community. “We have been able to find some nice deals at some of these university sites, and in other deals we have paid a good deal to get into those locations,” Mizes says.

Franchisees are finding new real estate opportunities thanks to a surge in student housing-related development in recent years. Although construction has dipped from very high levels in both 2013 and 2014, the pipeline remains active. An estimated 48,000 new off-campus beds (counted by individual bedrooms) were completed in 2015 across 73 universities, according to Axiometrics.

New student housing facilities, too, are emerging as part of larger mixed-use projects that combine housing, restaurants, retail and services into live-work-play communities, according to Axiometrics. For example, the University of Southern California in Los Angeles is developing its new USC Village, a $650-million extension of the campus scheduled for completion in late 2017.

One of the challenges for on and near campus locations is that business does tend to dip during school holidays and breaks. That is one reason many brands look for locations just off campus where they can also draw traffic from the surrounding community.

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