Stadium blitz for hungry franchise brands
It's football season, so it must be time to eat. More franchise brands want in.
Sports stadiums across the country are looking to up their game beyond the typical fare of hot dogs and burgers, and franchise groups are hoping to cash in on those opportunities.
Getting a foot in the door at stadiums can be a challenge. But, setting up shop directly in the path of thousands of hungry fans can make it well worth the effort for both franchisees and franchisors. Brands generally approach these non-traditional venues with one of two strategies. They are either looking to turn a profit like any other location, or they are looking to leverage the location as a marketing play to boost their brand image.
Marco’s Pizza franchisee Chase Kintz has five stadium locations in Colorado. His first stadium unit was at Dick’s Sporting Goods Park, which hosts the Colorado Rapids soccer team. Kintz had opened a Marco’s Pizza in a mall around the corner from the stadium, and the stadium manager approached all of the tenants in the mall to do group advertising at the stadium.
Kintz recognized the best advertising would be to get Marco’s Pizza directly in front of fans. “The original goal was simply a marketing opportunity, not a profit maker,” says Kintz, who serves as director of marketing at Big Cheese Colorado in Denver. The Marco’s Pizza franchisee has since opened locations at Coors Field (Colorado Rockies baseball) and the Pepsi Center (Denver Nuggets basketball and Colorado Avalanche hockey) in Denver, as well as the Budweiser Event Center in Loveland and First Bank Center in Broomfield.
The stadium presence has been successful in achieving the goal of boosting the brand’s recognition, says Kintz, who also co-owns a sixth location and is the franchisor’s area representative for Colorado. Aside from an occasional local promotion, the stadium locations are the only marketing Kintz does for the brand. At the same time, it was important the locations wouldn’t be cost prohibitive. “Our goal was break even, and we were able to break even very easily,” he says.
Sports stadiums are part of the operating norm for franchisors such as Maui Wowi Hawaiian Coffees & Smoothies. The majority of the company’s 450 units are carts and kiosks, and the company and its franchisees work more than 10,000 events per year ranging from football and baseball games to county fairs. So, it is no surprise Maui Wowi approaches sports stadiums as a definite for-profit business play.
Maui Wowi has about 40 units located at professional and college-level sports stadiums across the country. Their profitability can vary widely depending on the location, the type of stadium, schedule of events and strength of the team or teams playing there. However, stadium locations are generally on par or higher than other mobile locations or even permanent or brick-and-mortar locations, notes Mike Weinberger, CEO at Denver-based Maui Wowi.
Counting up traffic
Stadium venues present a number of unique challenges including making and selling menu items in a compact space, maintaining quality control in a rapid-fire environment and taking into account factors such as game schedules, team performance and weather that can have a big impact on customer traffic and revenue. Getting a foot in the door generally means paying a sponsorship fee and signing a concession contract with the concessionaire in charge of operating food services for the stadium.
Sweet Lorraine’s Fabulous Mac n’ Cheez! recently signed a deal to locate in the hockey, basketball and football sports venues at the University of Michigan, including the “Big House” football stadium that can accommodate more than 107,000 people on game days.
Typically, there are fewer college level games than major league games. College football usually has seven or eight home games, while basketball and hockey have about 18 or 19 for about 40 or 45 total games. “So, it is not enough to build a chain around, but it is a good branding opportunity,” says Gary Sussman, president and CEO of Sweet Lorraine’s in Southfield, Michigan. The company just started franchising this year.
Sweet Lorraine’s signed a two-year term initially. “Obviously, our relationship and our success depends on logistics in the stadium. We don’t have to have a broad menu, but the quality of the product is critical,” says Sussman. Like many operators, Sweet Lorraine’s offers fans a taste of its product with a scaled back menu that is more manageable to produce. The company plans to offer its bacon, cheddar and pesto mac ‘n cheese on the general concession level, and its higher price point lobster mac ‘n cheese on the club level.
Quality control is generally an issue that is front and center for franchise groups. Marco’s is only doing deals with stadiums that allow the franchise to prep its food onsite and bake the product fresh, as well as stadiums that provide all of the equipment, such as ovens. Simplifying the menu helps in that regard. For example, Marco’s Pizza offers only cheese and pepperoni and one size pizza.
At Dick’s Sporting Goods Park, Marco’s Pizza sells its pizza out of two large concession stands that are run by Aramark. Product is delivered by the company distributor to the stadium and the dough and sauce are made onsite. All of the pizzas are made fresh by Marco’s staff during events and put in to-go boxes. The Aramark staff is in charge of sales and actually handing product to the customer. “We still maintain 100 percent control of product quality,” says Kintz.
Whether franchise groups are going in with the strategy to turn a profit or just break even, it is important to analyze the costs and revenue of stadium locations. Operators need to do the math on sponsorship costs, number of events at a venue and amount of commission on sales from the concessionaire.