says CEO Jack Riggs, whose brand’s
bread-and-hummus is the college crowd.
“Our view of a Pita Pocket traditional
location is right next to a college culture.
For us, nontraditional is downtown or
in a strip mall.” Of the brand’s nearly
190 stores, about half are on or near
campuses. “I think it’s getting harder
to define traditional; there is so much
change. I think nontraditional may become the traditional.”
• Checkers Drive-In Restaurants.
“We define nontraditional as inline and
end-caps,” says Lynette McKee, chief development officer for the brand. In addition to its traditional “double drive-thru”
design, Checkers and Rally’s developed
two new building designs: a shopping
plaza end-cap unit with a single drive-thru, and an in-line design. McKee says
about 20 percent of the brand’s growth
going forward will be in these smaller-footprint locations.
• Radio Shack is looking to make
deals to place mini-racks of its products in bookstores at airports, and is
experimenting with many other new
distribution points for its products.
“There’s not a space in the USA where
we couldn’t be operating,” says Marty
Amschler, vice president of franchising
(see sidebar, page 19).
• Jamba Juice is working with Cen-terplate (which operates in 250 sports,
entertainment, and convention venues across North America) to locate
Stan Novack spent more than three decades with HM- SHost, where he excelled at bringing franchise brands to airports and roadside rest stops. Today, as president
of Novack Consulting, an independent firm specializing in
helping franchise brands succeed in nontraditional locations,
he highlights major areas of difference franchisors must understand to succeed in these venues.
• Market. The biggest difference? A captive audience, and knowing that your site is not
your customer’s primary destination. Also, says
Novack, nontraditional markets are continually
changing, demanding you keep up with remodeling and fresh offerings.
• Landlord. Who is the landlord? It could
be the airport authority, a developer, or a master concessionaire; each has different needs and
requirements.
• Qualifying. Franchisors should keep
abreast of RFPs release dates, and review them
for requirements such as specific concepts, rents,
minimum annual guarantee, local angles, or some
combination. If interested in working with a particular concessionaire or venue, he says, call and open a dialogue.
• Unit economics. The economics in nontraditional
sites “are totally different from operating on the street,”
says Novack. “Typical UFOC numbers will not work within
a nontraditional environment. You have to be prepared to
make changes.” The usual approach is to do an addendum
to an FDD, specific to different types of venues you may
be considering.
• Marketing. “In a nontraditional environment, tradi-
tional marketing doesn’t help you,” says Novack. “It will not
drive more customers to your venue.” In an airport or train
station, marketing will not increase foot traffic, although
it could affect decision-making. Adjustments in marketing
fund contributions may be in order.
• Rental structure. Street-side, rents are measured by
dollars per square foot. In many nontraditional sites, the
standard is total sales, divided among several parties (
franchisor, franchisee, concessionaire, and host).
• Space. Think small, or at least smaller:
typical space is 500 to 2,000 s.f. How do you
reduce a 5,000 or 10,000 s.f. format to 10
percent of its usual size? Franchisors must
identify their brand “essence,” the customer
value in the brand, and how to convert that
into a smaller space. (P.S.—Where will you
store supplies?)
• Visual identity. In many, if not most,
nontraditional locations, a brand’s visual
identity may have to be compromised or
adapted to the requirements of the site. “A
lot of times as a franchisor, you have a certain look to the store interior or exterior,”
• Labor. Several issues to reckon with here. Many nontraditional venues are unionized locations with higher wage
and benefit rates; not easily accessible by public transportation (airports, stadiums, arenas, highway rest stops); and may
require security clearances.
A PowerPoint summary of Novack’s presentation on this
topic at our recent Multi-Unit Franchising Conference is
available at www.multiunitfranchisingconference.com/pdf/
novack_planestrains.pdf.
Tips from the Master
