Kiosk Operations an Agile Option for the Right Concepts
A small footprint can be a big win for the right concepts. As rents continue to rise and traffic patterns continue to shift, a small-format mobile retail outlet can slash overhead and keep operations efficient.
For Le Macaron French Pastries, the mall rent equation pushed the brand to investigate kiosks.
“We had been thinking a lot about the issue of malls, with the rent now in malls is very high and they don’t have as much foot traffic,” said co-founder Rosalie Guillem.
The company unveiled a kiosk version of the franchise in 2018 to trim that overhead. But they had to rethink what the core of the offering was first. Traditional locations serve up a wide range of pastries, gelato, cakes and coffee. But that’s too much for a small kiosk, so the company focused on the namesake product, the “gem of the pastry world.”
“We analyzed the sales in our store, and the sales were 70 percent macarons, it’s really the star. So with that analysis, we thought the kiosk would be a great answer for our investors,” said Guillem.
Sales took a hit, but the savings were much greater for locations that made more sense for kiosks, which can still reach $1,000 a day in sales with one operator.
“We are doing 80 percent of the sales we used to do in the store, the investment to open a mobile kiosk is three times less than a store and the rent is three times less. When you do the math, it's easy to understand,” said Guillem. “We still like to have traditional stores in high traffic locations, those are very nice when the rent makes more sense.”
At around $90,000 for the full kiosk and franchisee fees, the kiosks are a much smaller investment than a traditional store and aren’t bound to a long-term lease.
The kiosk also helps Le Macaron stand out in the center of retail instead of blending into the food court.
“Most of the time, it’s going to just be in the middle of the hallway in the mall, not especially close to the food court,” said Guillem. “Our best marketing is to give samples to the customer, so we want to be in the middle of the mall.”
She said that they’ll get a lot of “wows” with their samples, and have even got a complete breakdown or two.
“A baker tried them for the first time,” said Guillem. “She was literally crying.”
But there is a caveat to the Le Macaron kiosk: the cooking has to be done elsewhere. All those sob-worthy macarons come out of a central commissary kitchen and are shipped to franchisees like Luke Freshwater, shown to the right. That means storing those treats somewhere. Since the kiosk has no room for storage, it means leasing storage space from the mall or other non-traditional space.
At Maui Wowi, the kiosk has been the most-popular footprint since the very beginning.
“The founder when she first started the concept, it was all about going where the customers were,” said Misty Hartner, vice president of operations for Maui Wowi. “They had a little '80s-looking tiki hut that they’d drive around.”
Apart from some modern tiki polish, that model has remained the dominant outlet for the brand’s coffee drinks, smoothies and other to-go treats. Of the brand’s 450 locations, 200 are the standard mobile kiosk.
For Hartner, the flexibility is a major advantage of the kiosk. Operators can do a concert one day, a catered event the next, a graduation or the PGA Tournament the next day. Basically, anywhere with a power hookup and customers, the kiosk can work. Right now, the brand is busy at the Houston Rodeo with eight kiosks slinging coffee and smoothies for more than 75,000 cowboys and cowgirls. The carts were designed for big events like that, carrying everything a franchisee needs.
“It’s a mostly full inclusive unit, so there’s a hand sink, all the equipment. So everything they need minus their product,” said Hartner. “A lot of times they’ll just haul in a cooler to keep the product cool.”
The flexible kiosk can also be made into a permanent location for the right spot. She said one franchisee has a location in front of a busy healthcare facility that remains on site every day, utilizing storage at the facility.
In all, the kiosk costs less than $100,000, said Hartner. And, of course, most mobile operations aren’t locked into any lease. The biggest benefit, however, she said is the simplicity.
“We literally do a training with them, they get their cart and can be working immediately,” said Hartner. “I’ve actually had some people that left training and worked events the very next day.”
One kiosk consideration is the look and feel. Out in the elements or pulled behind a truck, mobile kiosks need routine TLC. The FDD requires franchisees to update every five years—faster than most traditional restaurant brands. But because the kiosks are basically a metal frame, Hartner said an update isn’t a massive headache.
“We’ve been very lucky with the vendors, they build a really great cart, they’re made out of stainless steel. So as far as the cart goes, a lot of time franchisees don’t have to do many updates to that,” said Hartner. “It’s just the look.”