No matter the growth stage
That seasonal cycle is a given in another, more common nontraditional space: university campuses.
“I like higher education. I think there’s a great opportunity there. … We have some of our classic menu items but then bring in items for millennials and a younger population to really expand the demographic profile of our customers,” says Michael Lassiter, CEO of café concept Rising Roll. “By doing that, we got on our initial university campus. People saw our brand, and we had other opportunities come up with university campuses, and that really just took off.”
Rising Roll hitched its early growth to nontraditional, which accounts for about three-quarters of the brand’s 19 units. In its Atlanta home base, most of the locations are in class A office buildings, while its expansion to other states is almost exclusively through major state colleges, including the University of Florida and the University of Virginia. The micro-chain also has a few stores in hospitals.
While Lassiter recognizes the appeal of nontraditional markets, the decision to focus on such locations came down to necessity more than anything else.
“As people—in our opinion—were overpaying for some sites, we were looking at opportunities that gave our franchisees a chance to be successful. One of the things that we noticed is you can have great locations and even have somewhat of a retail presence in nontraditional locations, and the rents were a heck of a lot better,” Lassiter says. “It was a no-brainer for us.”
That’s not to say that build-outs in airports, colleges, and similar spaces are easy to acquire. For many brands, getting a foot in the door can be challenging, but once they partner with a licensee and secure one location, others follow almost organically. That was the case for Rising Roll on college campuses, and it’s also the hope for Firehouse Subs, which has begun making a push into universities, as well as airports. But whereas Rising Roll started with nontraditional for budgetary reasons, Firehouse Subs is pursuing that route because it’s white space. It is, after all, an established brand with more than 1,100 units.
“Street-side opportunities are starting to get limited in many parts of the United States,” says Greg Delks, vice president of franchise, global, and nontraditional development at Firehouse Subs. Delks, who has been with the company a dozen years, began studying up on these alternative locations a few years ago. Now the brand is set to ramp up expansion in that area. “We’re masters of street-side development, so nontraditional has been quite the learning curve, and I’ve made myself a student of nontraditional … over the last two to four years. It’s taken me this long to really start to get traction,” he adds.
But even Delks, a veteran of franchise development, found the process—for both universities and airports—to be more involved than he’d anticipated, saying he was “educated in the higher education way of doing business.”
Unlike Rising Roll, Firehouse Subs is starting small before ramping up to bigger schools. “Sure, we’d love the Michigan, Michigan States of the world, but I would rather start small, learn it, troll it, grow with it, and then be able to have scalability and take it and do the same thing anywhere,” Delks says.
In 2015, Firehouse Subs tested the waters of university dining with a limited-menu location at Kansas City Community College, which is operated by a local franchisee who also has a street-side restaurant. Nevertheless, the company bills the location at Western New England University (wne) as its first on-campus college store since it boasts both the full menu and online ordering. The WNE unit, which opened in April, is also the model for future campus-dining growth. So far, Delks says he’s been pleased with how the brand has been received but knows he won’t really see the fruits of this labor until 2019, when the locations have gone through a full academic year in business.
“Campus dining is a totally different trade area than even across the street. Being part of the meal plan and having access to those students on campus, that’s the motivator,” Delk says. “And most college campuses are really transforming themselves into a complete retail environment.”
He’d like to see Firehouse Subs open more on-campus locations and thinks between 10 and 20 units over the next five years is an attainable goal. For one, timing is key; Delks says aspiring tenants must wait for current leases to end.