Onsite dining partners with restaurants for mutual benefit

In-house dining programs and commercial restaurant operators have a long history together, but for much of it, the relationship had been confined largely to licensing and franchising deals the onsite dining programs—often through contractors—made with established commercial chain operators to bring their brands onto the premises. This led to the familiar sight of prominent QSR chains like McDonald’s, Burger King, Pizza Hut, Taco Bell and Starbucks on college campuses and in other large-volume venues.

These relationships eventually started to expand to encompass smaller local and independent restaurants as in-house dining programs saw value in incorporating popular local restaurant brands into their offerings as a way to entice more traffic, expand offerings and build relationships with the local business community. One of the most prominent and extensive such initiatives was launched over a dozen years ago by Microsoft’s in-house dining operation with its Local Brands Program that brought a regular rotation of notable Seattle area restaurants into various cafes in the company’s sprawling corporate campus in Redmond. Local Brands was a major factor in Microsoft Dining winning the FM Best Concepts Awards Best of Show designation in 2010.

The idea also began spreading to the college market, where campus dining programs saw value in such ties not only operationally and financially—popular local concepts draw customers and capture revenues otherwise lost to off-campus eateries—but also as a way to boost town/gown relationships. The arrangement either brought the restaurant brand onto campus as part of the retail mix or incorporated it into meal plans as an off-campus option.

Meanwhile, the traditional incorporation of mass-market QSR brands and their “unhealthy” menus eventually started to become controversial, especially in healthcare environments, leading to many such units seeing their deals terminated with hospitals and medical centers. That opened the door to a new wave of external commercial concepts offering menus with healthy profiles to make inroads into this market, not just major chains like Au Bon Pain and Panera Bread but also smaller—often local—brands that emphasized healthy, fresh food.

Building town-gown ties in a COVID world

With the coming of the COVID pandemic and its devastating effect on the commercial restaurant world—particularly independents—business ties with institutions have become even more important to this market. For their part, onsite dining programs have found advantages of their own over this crisis period in alliances with commercial operators, advantages both in community relations and financial/operational terms.

For instance, Gourmet Dining, a management company that operates dining at Stevens Institute of Technology in New Jersey, has modified its existing program of extending student meal plans to nearby restaurants in various ways, notes George Kuzma, the company’s vice president for business development.

“We do a wide variety of programs with local restaurants including dining at their restaurants, bringing local restaurants on campus as full-time third-party operators and deals with GrubHub dollars as part of the meal plan so [students] can also use their meal plan when they are home remote learning away from campus,” he explains. “It has been a priority of Gourmet Dining to become partners not only with the colleges and universities we serve, but the local communities that they are in,” he adds.

Photo: Washington Wednesdays, a program that lets students at Stevens Institute of Technology in New Jersey use meal plans at off-campus restaurants continues with modifications that also allow remote learning students to use their meal plans.

The program is in effect not only at Stevens but at other New Jersey campuses where Gourmet Dining manages the foodservice program, including Rider College, Rowan University, Kean University, Farleigh Dickinson University, the New Jersey Institute of Technology and the Camden and Newark campuses of Rutgers University.

Next door in Pennsylvania, local restaurants are lauding the University of Pittsburgh’s dining program, operated by Chartwells, for extending meal plan eligibility to 27 off-campus eateries and other businesses where students can now use their meal plan dining dollars. The new meal plan approach that Chartwells implemented when it took over management of Pitt’s campus dining last summer allocates 25% of students’ dining dollars to off-campus dining locations.

“The dining dollars program has been a huge win for both our students and our restaurant partners,” Pitt Director of Dining Services Joe Beaman commented recently to the Pitt News student paper about the impact of the initiative.

At Duke University, a pre-COVID program called Merchants on Points (MOP) that let off-campus restaurants deliver food to students on campus, food that is paid for using meal plan food points, is still active “but a bit abbreviated due to the current environment,” says Robert Coffey, director of dining services. The program currently has seven participating restaurants while drop-offs have been limited to 11 points around campus rather than individual residences as previously. Duke is also maintaining its food truck program that invites commercial mobile vendors onto campus after 6:30 p.m. weekdays to provide an evening meal option. Currently, seven trucks are in the rotation.

“The food trucks and MOP programs have been a great resource to provide extra rotations of food offerings at some of the off-campus apartment/hotel housing locations being used due to the university's COVID contingency plans,” Coffey notes.

A version of that partnership model, called Blacksburg Delivers, launched last fall at Virginia Tech and lets commuter students and staff get lunch on campus from off-campus commercial restaurants through a remote-order/drop-off approach. The participating restaurants put their online menus on the ChowNow app from which students and staff can order for pickup at two campus locations during the lunch period.

“The town is hurting for business and we want our local merchants to do well,” noted Brian Grove, associate director of dining services shortly after the program launched. “This not only gives them some business but is good PR to market their brands.”

Aggregating independents

The bringing of local and independent restaurant brands into onsite locations took a major step forward in the last few years through the emergence of platforms that base their business model on that approach rather than simply having a few external brands be an adjunct to a more comprehensive in-house operated dining mix. Two of the most prominent are Fooda, an independent concern, and FoodWorks, which is a unit of Compass Group. Both operate primarily in the corporate dining sector where all or most of their café offerings are from commercial restaurants that come in to serve their menus, usually on some sort of rotation basis. The approach won Fooda an FM Best Concept Award a couple of years ago and had been expanding before the COVID pandemic shattered the business dining market with its remote work mandates and office closures.

In response, FoodWorks last September launched a program called Market Café in New York City that it promoted in its release announcement as “a cost-effective, contact-free dining option [that] simultaneously help[s] local restaurants and food artisans who were affected by COVID-19 get back on their feet [by providing] them with a way to restart their services.”

FoodWorks traditionally operated corporate cafes that brought local restaurants in to serve their menus. It has now adapted with a model called Market Café that incorporates touchless transactions using remote order, shelf pickup and self-checkout.

That initial foray partnered with noted local eateries such as Katz’s Deli, Hummus & Pita Co., Parm, Luke’s Bar & Grill and Yumpling, and offered remote order, pick up from a designated shelf onsite and self-checkout for a totally contactless transaction for customers.

“We are excited to bring Market Cafe to New York City as we are the only company currently offering a solution such as this one for safe, supportive and sustainable corporate dining,” FoodWorks President John Cocker noted in that release announcement. “Our goal has always been to support local communities and our beloved restaurant partners. By creating this, we can provide a first of its kind dining solution for large corporate offices.”

Market Café opened a second market location in Chicago last October and was planning on expanding to Houston in 2021.

A more limited example of a corporate client and commercial restaurant operator partnering on a business dining venue debuted in early February in Milwaukee, where online apparel retailer Wantable opened its new headquarters in a refurbished industrial building and engaged with local restaurateur Jeffrey Reinbold to operate the building’s Wantable Café. Reinbold, who owns and operates two successful commercial restaurants in the city, describes Wantable Café as a socialization and collaboration space for Wantable employees that offers them free coffee from local roaster Condor Coffee, plus tea, snacks and some minimal packaged food options. Notably, Wantable Café is also open to outside customers, who must pay for the offerings, something that helps fund the operation along with Wantable’s subsidizing its employees’ purchases.

Promoting healthy dining

As noted above, some healthcare institutions are working with local commercial restaurant operators who have developed café concepts with healthful dining profiles to open branch locations inside their facilities.

With healthy eating being an increasing point of emphasis for healthcare providers, the way has also been opened for alternate avenues of business that play on this theme. One example is an alliance between local restaurateur Bob Stinson and Memorial Hospital in Mississippi on Eat Right Meal Prep branded fresh, healthy take-home meals for both staff and discharged patients. The meals are produced in the kitchen of Stinson’s Saluté restaurant, helping to keep the staff there employed and busy during the pandemic slowdown of the eatery’s regular business.

Of course, commercial restaurants have played a major role in feeding healthcare workers during the pandemic, often with donated meals that sometimes had the unfortunate consequence of cutting into the in-house program’s already diminished retail food sales. In any case, such efforts are likely not sustainable as they either don’t generate revenue for the restaurants providing them if they are truly donated meals, or, if they are purchased for donation by charity-minded outsiders, they are a short-term phenomenon that has already peaked and receded as the pandemic period dragged on.

The Healthy Scratch Cafe in Buffalo’s Roswell Park Cancer Center is a unit of a local restaurant brand that emphasizes healthy, scratch-made foods as its name says.

Ultimately, though, mutually beneficial partnerships between commercial restaurants and healthcare institutions are likely to focus on the restaurants—provided they can project the proper healthful dining image—becoming part of the institution’s retail dining mix or serving as a provider of nutritious home meals for discharged and outpatients, especially as “prescriptions” for more healthful eating are becoming more common in medical circles as the influence of diet on overall health becomes better understood.

A possible spinoff of this kind of alliance might be events such as the Simple Cooking With Heart classes being conducted at Our Lady of the Lake Regional Medical Center in New Orleans by Dollar General. Granted, Dollar General is a retailer, not a restaurant, but the idea of a commercial enterprise promoting a healthful dining message in a healthcare setting could have promotional and public relations benefits for both parties.

Fresh Healthy Café in Cape Girardeau’s Saint Francis Medical Center was the first unit of the FRESH Restaurants brand to open on a healthcare campus when it debuted two years ago. At the time, the other 23 were located primarily in malls and other retail clusters.

The onsite dining market least likely to get much impact from partnerships with commercial restaurants is K-12 foodservice, or at least K-12 foodservice that operates under National School Lunch Program (NSLP) regulations, given NSLP’s financial and meal content restrictions. For private schools and affluent smaller districts not part of NSLP, meal service by commercial restaurants has been more common, either through individual partnerships or aggregator services such as Wholesome Food Services, which last year had partnerships with some 200 restaurants—independents as well as units of chains like Noodles & Co. and Boston Market—to prepare and deliver meals to schools that are preordered by students or parents. Wholesome Food Services last year expanded into operating with a district’s own foodservice program, which obviously cuts out participation by external restaurants, but its traditional model remains operative for schools and districts that either don’t have in-house meal service capability or prefer to outsource it.

During the recent pandemic, restaurants have stepped in to provide emergency meal service when the in-house dining staff was incapacitated or as a one-time treat but these are ad hoc initiatives in trying times. For more lasting alliances between onsite dining programs and their commercial cousins, the relationship has to find ways to provide benefit for both parties, and it may be some of the initiatives launched over the past year in a challenging time that may reflect the course of future partnerships.