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The Daily Wildcat

The Daily Wildcat

 

    Transitioning to more chains could be lucrative for UA

    Tucson has traditionally thrived on small local businesses but what works for the trendy downtown area is not the best solution for the UA’s campus.

    For years, the UA has incorporated well-known chains, like Starbucks and Panda Express, and is now increasing the amount of franchised chains on campus over other options to increase profits.

    Jason Tolliver, the director of Arizona Student Unions, said, “franchises are owned by the university, while hiring is handled by the contractor. The profits stay within the school and we essentially just pay a royalty fee to the companies.”

    While transitioning union restaurants to chains goes against the nature of Tucson — for instance, changing Bookend Cafe into a Starbucks — is a good business move for the unions.

    “I’ll miss Bookend Cafe. Not only did I love the low prices, I thought it was important that U of A supported its small local businesses,” said Margaret Thieroff, a senior studying nursing.
    While I will also miss Bookend Cafe, the increased revenue Starbucks and other chains will bring to the university justifies the change.

    Sentimentality isn’t any way to run a business.

    Starbucks and other chains offer brand recognition to students, something that has propelled their revenues past their competitors. The shift from campus originals to chains in the Student Union Memorial Center and around campus is a move that sales numbers suggest is endorsed by students.

    Last week, Starbucks generated $24,495 in revenue in the U of A Bookstore location alone, dwarfing Canyon Coffee’s first week revenue of $12,268. The new Starbucks location that replaced Bookend generated $12,678 in the first week of school, a 40 percent increase from the $9,019 that Bookend sold during the first week last year.

    Starbucks thrives on being recognized as one of the nation’s top producers of coffee and profits from this recognition.

    “Starbucks knows what customers want, they have years of practice and always get their drinks right – other places are inconsistent, and I am never disappointed at Starbucks,” said finance sophomore Suravi Sengupta.

    Although this corporate brand detracts from other campus-original brands like Canyon Coffee and On Deck Deli, which is in competition with Einstein Bros. Bagels, the overall results are astounding from an accounting standpoint.

    “We’ve seen a significant decrease in the bookstore location because of the large influx of customers to the library location of Starbucks,” Tolliver said, but “it balances out to more than we had before.”

    Even though the royalty fees for the franchises may slightly increase overhead, the higher revenue stream is startling when compared to campus original concepts. For instance, On Deck Deli and Chick-fil-A had comparable business, around 6,000 transactions last week, but Chick-fil-A collected $10,000 more in revenue, a portion of which will go to the university.

    Increased revenue is allowing the unions to offer more choices on campus. With the addition of Tapingo, an application used to order your food ahead of time to avoid the line, and newly-constructed Bear Down Kitchen, the unions are working harder than ever before.

    The added competition of chain restaurants helps them reach a broader market and provide consumers with more options than they had before.

    Nick Havey is a sophomore studying Spanish and pre-physiology. Follow him on Twitter.com/@nihavey.

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