As the line between c-stores and fast-casual restaurants blurs, foodservice programs are becoming an integral part of the convenience store industry. But what exactly is the difference between proprietary and co-branded foodservice, and which is the best option for your business?
In a nutshell:
Co-branded foodservice is when a store partners with another brand or quick-serve restaurant (QSR) for its foodservice program, such as Hunt Brothers Pizza, Krispy Krunchy Chicken or Subway.
Proprietary foodservice, on the other hand, is when a store develops its own foodservice program.
There are advantages to both proprietary and co-branded foodservice, and there’s no one-size-fits-all answer. The best course of action is to do your research, and decide which works best for your company based on your size, location, foodservice experience and resources.
To get you started, here are the primary advantages of each:
- Easier to implement: It will take less effort to get a foodservice program with an already-established brand up and running, which might also mean lower up-front costs.
- Brand recognition: Customer already know, love and trust these brands, so marketing efforts can be minimal.
- Brand support: An established foodservice partner has the resources in place to provide your store with the support you need. In turn, customers are rest assured that the product will be consistent.
- Profit potential: When you operate your own foodservice program, the initial risk might be greater, but the potential for profit is also much higher.
- Differentiate from competition: No other c-store chain will have your brand of foodservice, which could help drive traffic to your stores.
- In control: When you’re not working with another brand, you can control and customize every aspect of your operation based on your capabilities and your customers’ preferences.
The bottom line:
Proprietary foodservice programs are high-risk and high-reward. Gross profit margins have the potential to be much higher for retailers who have the resources to launch and properly manage their own foodservice operation.
But branded programs allow c-stores to capitalize on an established brand and its operational experience. And they will enable you to implement a foodservice program quickly with minimal experience.
Whether you choose a co-branded or proprietary foodservice program, you’re adding value to your business and expanding your customer base.