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Food vendors up game at airports


Starting with its first store in 2008, Red Mango now has 14 stores in airports.

High-end retailers are grabbing space in airports around the world, offering stiff competition to restaurants seeking the space. But don’t be wooed by big traffic numbers alone, as costs and hassles can be high, too.

Stepping into an airport these days is a bit like walking into the local mall. Airports are continuing to up their game when it comes to offering more retail, services and food and beverage options.

The website for San Francisco International Airport reads like a mall directory, complete with tenant map and a list of high-end restaurant and retail tenants such as Burberry, Gucci and Swarovski.

Miami International Airport was recently named one of the top 10 shopping airports in the world by CheapFlights.com. The Miami airport is home to upscale fashion tenants such as Hugo Boss, Michael Kors and Tommy Hilfiger. These days, such tenant rosters are becoming more the norm rather than the exception.

High-end retailers are increasingly landing in airport venues both in the U.S. and around the globe. So, what does that changing tenant mix mean for franchise food brands that have traditionally found a home—and big business—at busy airports? Many airports are seeing the same evolution of food and beverage tenants occurring at top mall and lifestyle centers, with a preference to add quality local and national brands, unique local concepts, celebrity chefs and healthy fare.

“In general, I think restaurant offerings in airports and other travel venues are becoming better, because they are representative of the American culinary scene, which is becoming better and better in and of itself,” says Frank Sickelsmith, vice president of Adult Beverage and Restaurant Development at HMSHost.

Philly Pretzel Factory

Philly Pretzel Factory is a newcomer to targeting airport locations, but its first store, in  its hometown airport, shows promise.

Airports also are a microcosm of the cities they are located in. So, when you are in major cities, you see some new and innovative concepts, and the airports want that represented in their offering, he adds. HMSHost is a leader in providing dining for travel venues and operates in more than 100 airports around the globe.

Airports are looking for quality brands similar to those you would find in a typical lifestyle center or mall, agrees Jim Notarnicola, vice president of marketing and franchising for Red Mango in Dallas. Airports also like healthier concepts, especially those with fast, grab-and-go convenience, he adds. Red Mango has benefited from that growing demand for healthy food options. The franchise offers probiotic yogurt and fresh fruit smoothies. “That’s what we pitched and that’s where we found a lot of interest on the part of licensees to add to their portfolio of offerings in their proposals,” says Notarnicola.

Red Mango opened its first airport location in 2008 and now has 14 stores open at airports such as Newark Liberty International Airport and Chicago Midway International Airport. The company also has two more potential locations that are in the proposal stage that the firm hopes will open in 2015. Red Mango coordinates all of its airport locations through licensee agreements with airport concessionaires such as HMSHost, the SSP Group and The Grove Inc.

Adding local flavor

As airports continue to expand or remodel existing terminals, they are adding more retail and restaurant space. The overall strategy related to the tenant mix varies depending on the individual airport. Some airports are incorporating upscale, luxury tenants, while others are working to bring the local culture into the airport with a variety of home-grown local businesses, local art and even local musicians.

Airport locations are a new venture for Philly Pretzel Factory. The company opened its first airport location in the Philadelphia International Airport at the end of 2013. “It is one of the top 10 stores in our system already, and we are excited about doing more airport locations based on the early success we have had so far,” says Marty Ferrill, president of Philly Pretzel Factory.

In this case, the Philadelphia airport had launched a major $127-million remodel and expansion of its F Terminal that included remodeling its existing food court. One of the factors that helped a Philly Pretzel Factory franchisee land a space in the airport is the company’s local connection. The Philadelphia-based company is known for its “Philadelphia-style” handmade soft pretzels. “I think that gave us a little bit of a leg up in this particular location,” says Ferrill. “They want to have local foods in the airports also, so that when travelers are going through these airports, they know they’re in that particular city based on the food experience.”

Airports are an attractive target for good reason. They deliver a massive volume of potential customers 365 days a year. Hartsfield-Jackson Atlanta International is the busiest airport in the United States, with more than 45 million enplanements in 2013, according to the Federal Aviation Administration. Los Angeles International and Chicago O’Hare International rank second and third, with more than 32 million enplanements in 2013. In comparison, one of the busiest malls in the U.S., Minnesota’s Mall of America, attracts some 40 million visitors each year.  

A different process

However, airports are much different than leasing space in a traditional shopping center or street front location. Franchisors or franchisees interested in airport venues generally have to respond directly to a request for proposal (RFP) or form relationships with an airport concessionaire that licenses a variety of brands. Negotiating airport space directly usually means working with a variety of entities such as the airport authority, the department of transportation and/or a third-party concessions company.

It is a very long process. It is not unusual to be working on an airport for two years before it comes to fruition, depending on their planning horizon. It is also important for operators to understand the higher costs involved. “You are typically going to spend more for the build-out and construction,” says Ferrill. The volumes are great, but the cost of entry is a little higher. Labor costs are a little bit higher, and there are some hidden costs, such as fees for employee security screening, he adds. The hours of operation also are longer with stores that are usually open year-round.

Sickelsmith advises talking to other operators who have an established airport presence. What happens a lot is that people see the exposure and the volume, and they don’t consider a lot of things that can make airports very, very difficult—such as security, staffing and the need to operate very efficiently in smaller footprints, he says.

“You need to make sure that you have a good plan to move forward in the non-traditional environment before you commit your resources to it,” he says.


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