Franchises on campus: The chain gang

Inviting a national franchise onto campus can boost a university’s appeal. But what are the costs and benefits, asks Luke Dormehl – and how do you get it right?

In an age in which universities must run as businesses, it makes more sense than ever that they partner with companies who can bring an added dimension to campus. That’s what a number of universities have done by partnering with foodie franchises – bringing well-known, established names to the doorstep of students and staff. While in-house catering remains crucial, doing this can help to expand the choices available on campus and enhance convenience, while also bringing in a valuable new stream of revenue.

“Our students’ union was operating their own supermarket, an unbranded one, and it wasn’t performing particularly brilliantly for them,” Matthew White, director of campus commerce at the University of Reading, tells University Business.

“So they turned to the university and said that they were thinking of withdrawing that service. Because we’re a campus university and we’re not directly in the town centre, we felt it was important to have some kind of comparable presence in the university. As a result, we went out to the marketplace and asked for expressions of interest.”

Six months later, the Co-op moved into the building formerly run by the students’ union, leasing the space and using it to offer its produce on the Reading campus. “The Co-op brings instant brand recognition, national pricing strategies, their buying power delivers great value to our community and the brand is trusted with great loyalty benefits to the student population,” White explains.

Multinationals should share your values

 

Weighing up the factors

White notes that, “At the end of the day, we’re all commercial businesses now. We have to attract students to come to use our facilities.”

Bringing a store like the Co-op onto campus can help better achieve this. However, getting the balance right when it comes to choosing the right company to partner with is more challenging than just earmarking as much on-campus real estate as possible and waiting for the rent money to roll in.

“One of the things we’re really, really keen on at Reading is that we are a Green Flag award winner,” he continued. “Our campus is very beautiful in terms of its green parklands. We don’t really want it looking like a shopping mall. We want it to feel like a very relaxed environment in which students and staff can benefit from that environment.”

Factors like this must be balanced with the potential for increased revenue when universities consider their options with franchises keen to move in on campus. Done right, though, he says, it is a win-win-win situation.

“There is an opportunity to create a sustainable business relationship which can mutually benefit all parties,” White notes. “The university may let them have commercial space at a commercial rent, which brings in revenue to the university, which is then used to underpin and support students and academic activity. For the [business], it’s building brand allegiance and [potential] reliance upon their products amongst a community of people that are going to make habits for the rest of their lives. Then for students themselves, the great benefit is having [the facilities they require] right there on campus. They don’t have to think too hard about their weekly shop.”

QUB students want to support local businesses rather than multinationals

 

Avoiding the big names

Some universities make a point of avoiding big, national franchises as a way to support local, independent traders.

For example, Brian Horgan, head of service for campus food and drink at Queen’s University Belfast (QUB), tells University Business that the university has worked hard to build up relationships with local providers. It frequently hosts on-campus food markets that bring in local operators, while it has largely sidestepped big brands for homespun businesses.

Horgan said that this decision was reached a little over a decade ago when QUB was searching for ways to make its on-campus catering offerings more responsive to student needs. At the time, they carried out extensive research among students and found that students were outspoken about wanting to support local enterprises.

“Students like supporting a local business,” he said. “Local businesses also tend to reinvest in the local economy, because they probably use a lot more local suppliers than a multinational would do. They also employ local people, which people seem to feel is important.

They employ a lot of local students as well.”

Horgan points out that the university has three Clements Coffee outlets on campus, a local company which boasts about its “blend of beans unique to Clements … roasted here in Belfast.”

 

Responsiveness of local businesses

It’s not just about students wanting to give back to the community, either. Horgan says that there are real, tangible benefits to supporting local businesses.
“We feel that local operators are more responsive and supply a better service than some of the multinationals who we have had in the past,” he says.

At times like the challenging Covid-era university situation, responsiveness can mean agility – and the ability to pivot quickly. He noted that some of the companies QUB does business with adapted to the pandemic by deciding to do food deliveries for people still working on-site. This kind of adaptability is something a large, slow-moving giant may find it hard to match.

“Local businesses provide a good balance of cost and customer experience. It’s about becoming a true part of the campus, not just a business renting out some real estate” –  Brian Horgan, head of service for campus food and drink, Queen’s University Belfast

He adds that, in his experience, local businesses provide a good balance of cost and localised customer experience. It’s about becoming a true part of the campus; not just a business renting some real estate.

“They’re not here for the short-term game; they’re there for a long-term relationship,” Horgan explains. “They understand that, and they have enjoyed very good, profitable years with the university. But they also stood by us last year, whenever footfall dramatically decreased, in order to maintain a presence on campus and offer a quality service to students and staff.”

This, he suggests, might differ from a large, publicly traded company. “If you’re working with a larger corporate organisation, they may have pulled down their shutters in order to protect their business and protect their margins,” he noted.

Currently, QUB is working on the establishment of a massive new student centre, scheduled to open in September 2022. As part of this, they will be bringing on board more brands. This will be done as part of a transparent, open procurement opportunity, and Horgan says that he expects big names – as well as locals – will be bidding on the process. However, as part of the tender they will have to answer questions about factors such as commitment to the local area, sustainability, corporate responsibility and more.

Whiteknights campus at the University of Reading is home to a Co-op

 

Matching up values

Ultimately, this is the crux of the matter: not whether franchises are national or local, but how well they understand and match up with university values.
“If you invite [businesses] onto your campus, and they’re there in a prime location at the heart of the campus, they’ve really got to be wearing a similar badge to yourselves in terms of the way they operate and what their outlook is,” Matthew White of the University of Reading says.

“You’re going to be sniffed out very quickly by the customer otherwise. They will see it as a very light-touch approach, and that’s not what cuts the mustard.”

Whatever brands align themselves with universities must be willing to offer a service that is in keeping with the expectations of the university. Some of this is about tailoring offerings to the demographic (for instance, accepting NUS cards or offering individual portions of food instead of larger family meals), but a bigger part is about ensuring that the brand values match up.

Although price of goods is always going to be a factor for students, it’s not the only factor.

“Our prime audience is so geared now towards wanting to know the provenance of food, understanding how it’s produced, ensuring that there aren’t hidden nasties in there [when it comes to sourcing or packaging], et cetera,” White says.

“I would say that for most universities, that’s really quite high up the agenda.”

Getting the right balance

Martin Rogers, Co-op’s head of new channels, tells University Business: “Franchising is critical in helping to extend the reach of the Co-op brand and the agility of the model allows us to open stores in new spaces and locations. It’s a unique opportunity for us to generate mutual value with like-minded partners, who share the Co-op values and principles. As the official grocery retail partner for the NUS, the quality, convenience and ethical values of Co-op are a great fit with the student population, and are helping the brand become more appealing to a younger demographic.”

Getting the balance right isn’t always easy. Universities must, as White noted, be aware of not oversaturating campus with brands at the cost of local green spaces. Companies that eye up a buzzing campus of prospective customers must be aware of the decline in footfall during vacation periods. Finally, students must feel like they’re getting a good deal that conforms to their expectations of what they feel the university should epitomise.

This is a process that must be managed carefully every step of the way.

But when a match can be made, and values and outcomes can be aligned, it can be a superb opportunity for all involved.


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