Eatin’ good in the Union, and elsewhere, thanks to branded food options

Sometimes it doesn’t matter what’s in the cup as much as what’s on the cup.

Before Starbucks came to the Union, in its place there was a coffee shop called Carnation Cafe that was self-operated by the University.

According to Gail Finan, director of dining services, despite providing students with a warm and delicious caffeinated beverage, the numbers show that students respond much better to a name they know.

“Starbucks is a name that is recognized. We have $125,000 to almost $750,000 in one year ofsales,” Finan said. “That tells me students like and are willing to spend the money for a Starbucks product. Grounds for Thought was the coffee at Carnation Cafe. Grounds for Thought is a fine coffee and there is nothing wrong with it,” she said.

Each branded concept on campus has a different contract with the University. Finan said Steak Escape and Starbucks are run by the University, and the companies receive a percentage of the sales for allowing the University to sell their products for them.

According to the contract between Starbucks and the University, each month the University owes Starbucks a royalty equal to 7 percent of the gross revenue from the Starbucks store. The University is also responsible for spending no less than 1 percent of Starbucks’ gross revenue store for local or regional advertising, such as free cookie samples and promotional posters.

Customers might also notice that a cup of joe is a nickel more at the Starbucks in the Union than at the one on Wooster Street. Finan said the prices are negotiated to benefit the University.

“That’s based on us having higher benefits and higher contribution to the University – a contribution fee,” Finan said. “But we can’t charge 25 cents more, we have negotiated that we are allowed to charge five cents more. That’s true with Steak Escape too, the prices are negotiated. We pay money to the Union building, we pay our own utilities, a general service charge, etcetera.”

Wendy’s, Steak Escape, Jump Asian Express and Starbucks make up all of the branded restaurants on campus. Mary Edgington, Union director, said it’s not the University or the corporations that benefit the most from having branded food vendors, but the students.

“It provides them with something they said they wanted: branded food options,” Edgington said. “They are probably our most popular areas to eat on campus, and that certainly benefits students and faculty.”

Although they might be the most popular places to eat among students, the University does not rely heavily on branded concepts as a source of revenue.

“About only 5 percent of dining services income comes from Steak Escape and Starbucks, 95 percent comes from the rest of dining services,” Finan said. “You have to understand our total income includes conferences and catering, which don’t have an opportunity to use those” shops.

Edgington said there is a important balance that must be maintained between having too much and not enough branded concepts on campus.

“The one good thing about not having a branded option is that they can change more quickly if something’s not working,” Edgington said.

“But if you get a successful brand named option in there and it’s a good contract and their people are good to work with, it’s a gold mine, it’s good for everyone. But if you have somebody you’re stuck with, in a contract, then you don’t have that flexibility to change.”

“So one thing that is good about not having the branded concept is we have much more flexibility. So you know, its give and take,” she said.

The University of Akron recognizes the balance and only features two Starbucks and a Subway – the rest of their food options are self-operated.

Some universities don’t believe in a balance at all and look at branded vendors as money lost.

The Ohio University has no branded vendors according to Emily Howards, marketing manager for OU’s auxiliary services.

“We have an internal dining service that is fully capable of providing on its own,” Howard said. “Which means more money for us.”

Bobby Chickerell, a general food worker in the Union, believes branded food options give the students what they want, but come at a greater cost than just a nickel more per cup of coffee.

“I think Starbucks is wonderful, Wendy’s too, but we don’t make anything off of them. So I don’t like [Wendy’s] because I could lose my job,” Chickerell said. “We don’t make money and then [students’] tuition goes up. I think we should have our own varieties of all our stuff. But I do think we need Starbucks.”

The Wendy’s in the Union has been in operation since the Union first opened five years ago and recently agreed to stay another five. It was once rumored to do more sales per square foot than any other Wendy’s in the US.

Wendy’s is different from Steak Escape, Starbucks and Jump Asian Express because it is completely run by Wendy’s. The only affiliation with the University is that Wendy’s leases prime real estate in the Union.

According to the contract between the University and Wendy’s, the rent is determined by a percentage of the restaurant’s net sales. For net sales up to $600,000, Wendy’s owes 8 percent to the University; for sales from $600,001 to $1.2 million, Wendy’s owes 10 percent; for net sales over $1.2 million Wendy’s owes 12 percent.

“I like to believe we add to the offerings on campus,” said Becky Williams, who owns all three Wendy’s in Bowling Green and one in Perrysburg. “I know every time the line for Steak Escape is long and Starbucks is busy. Maybe it’s a thing of the times, but I think students really enjoy having branded concepts,” Williams said.