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Competition can be good for business, but when it comes to the quick-service industry, competition from major national brands can make life hard for smaller, lesser-known chains.
Not so for California Tortilla franchisee Jim Bloser and his unit in Newark, Delaware, which he has run since 2006 near the University of Delaware campus. Bloser has had overwhelming success with his store, even after Chipotle moved in down the street in April 2011. In fact, Bloser has not only kept his unit profitable since Chipotle opened, but he’s also experienced positive growth compared with past business years.
Bloser explains how to keep a business profitable even when established national rivals are close.
1. Plan Ahead
Before Chipotle even came into the picture, there wasn’t a whole lot of competition when I opened, especially considering the type of food we offer. There weren’t even a lot of quick serves in the same area, let alone on the same strip. Nowadays, as usual with business, it’s a completely different area.
With that, I’d be lying if I said I wasn’t a little disappointed when I heard Chipotle was coming into town. It was really my first main competitor, but I knew what we had to do.
The months leading up to when competition opens are the most important and will determine your longevity. Sit down with your management team and pick your strengths to build on before implementing new ones. Figure out what gives your brand the competitive advantage.
I’d say our biggest game-changer for customers was our menu. We have more choices than Chipotle and more food options, such as quesadillas, fajita platters, fish tacos, and the normal choices like burritos and nachos. With our diverse menu on our side, we knew that we could provide more services to get our food out there. Knowing your strengths initially will help determine future strategies.
2. Do What They Won’t
We knew that our food could stand on its own, but we had to develop our strategies more. I kept asking myself, What can we do that they won’t? What can make us different even though our food may be similar?
One thing that I knew would help was staying open later. Being on a college campus has its advantages, and staying open until 2:30 a.m. on Friday and Saturday is one of them. I knew Chipotle wasn’t going to keep its doors open longer, regardless of the location. We also implemented delivery of our product to the surrounding campus dorms and housing.
Another avenue to set us apart was to accept payment plans specific to the university. Our store accepts an off-campus meal plan that Chipotle doesn’t. That’s huge when it comes to college students who might not have the extra cash to buy additional food.
Those strategies might be difficult for the franchisees not based on a college campus, but there are still solutions. There are competitive advantages unique to each franchisee and specific location.
One thing to set your business apart is being a family friendly location. Our unit sees a lot of local families come out and have an experience that they won’t get somewhere else. Our kids’ menu not only enables us to bring in families, but also lets them know that we want them there as well.
3. Don’t Waste it All on Marketing
California Tortilla has a very unique marketing campaign and, as with most brands, the franchisee really doesn’t have a say in that big picture. However, you can still decide on what to spend the money on locally.
For us, we really didn’t need to go beyond the normal amount spent. You have to be realistic when this sort of thing happens: Everyone is going to try out the new guy. Don’t spend a bunch of money and get your name in anything you can. If your situation is anything like mine, your competitor will have the bigger budget and more avenues to market. Count on your loyalists and your staff to maintain business as usual and provide a quality experience to the customers you get.
We didn’t see a down week after Chipotle opened. We even finished 17 percent up in 2011. Remain confident and don’t spend a ton of money right away.
Let the experience for the customer be the most important thing to focus on, instead of focusing on how to spend money to make more money.
I’d love for the brand that moved in close by to serve pizza instead of burritos, but now I wonder what business would be like if Chipotle wasn’t there. Competition like this forces you to be on top all the time and provide your customer with an experience that they won’t get at another location.
4. Take a Second Look at Your Space
Competition will force you to look differently at many things, so take this opportunity to look at your physical space. Again, any big changes will come from corporate and you might not be able to control things such as logos or color schemes, but are there changes to be made to the unit itself? How can you redo a space to give you an edge over your competitor?
For my location, we had the landscaping completely redone but also put an awning over our outdoor patio space, which is something Chipotle doesn’t have. My team and I also decided to put in a private room to rent out for public functions. This is where it really counts about how you spend your money. An extra advertisement can generate some new business, but improvements that can last are more important and will produce longer.