Feed Your Coffers with Cafés

Food and drink concessions can be a boon to a fitness facility's bottom line -- if you are savvy to the secrets for making them a success.

In today's fast-paced, highly competitive marketplace, fitness center operators have to find niches to attract customers and bring in more revenue from current members - all in an effort to increase cash flow. Food and drink offerings are a great idea for a profit center for a variety of reasons. First, most of your members work out daily, or at least a few times per week, so you have a captive audience. Second, including an attractive lounge area for your members to enjoy their snacks encourages them to become more committed to your facility by developing closer ties to other members. If your concessions are unique enough to attract a wider audience, your profit center can grow exponentially by attracting non-members, as well. This added revenue can help when it comes time to create your yearly budget, providing you have extra cash to put back into your fitness center.

Lifetime Fitness and Caribou Coffee

Making your food and drink offerings unique can be achieved in a number of ways. For instance, some centers develop relationships with chains in an effort to achieve name recognition. Lifetime Fitness' alliance with Caribou Coffee, Minneapolis, Minn., is one example of a successful business venture between a nationally recognized fitness facility and a coffee chain. Lifetime Fitness, Eden Prairie, Minn., offers Caribou's Proudly Brew program in most of its 56 locations. Says Henry Stein, vice president of marketing for Caribou Coffee, "There is always the argument of whether we are adding value to them, or they are adding value to us." Adds Stacy Solow, marketing manager of Lifetime Fitness, "We feel great about [Caribou Coffee] and its environmental consciousness. It's a nice brand fit for us."

Lifetime Fitness' Life Cafés have a simple philosophy: Use the highest-quality ingredients (natural and organic, when possible), and provide a menu that meets members' needs with a variety of healthy choices. The facility has been brewing Caribou Coffee for about a year and a half. The Proudly Brew program allows Lifetime Fitness to offer Caribou Coffee at its Life Cafés without requiring Lifetime Fitness to purchase a franchise. The program offers a smaller coffee menu - coffees, lattés, cappuccinos - but no proprietary drink offerings. It does not allow the use of a Caribou Coffee card, nor for a partner to be named "Caribou Coffee." The café must also not look like a Caribou Coffee, to discourage people from assuming they are entering a franchise store.

Proudly Brew participants do, however, get the benefits and name recognition of Caribou Coffee, signage saying that they "Proudly Brew Caribou Coffee" and training to keep the quality of the coffee consistent with Caribou standards. With the Proudly Brew program, says Stein, participating partners "serve the same coffee, receive the same training, and must adhere to the same guidelines, standards and machine calibrations" as any Caribou store.

The Life Café is just one of the services offered to Lifetime Fitness members, including daycare, salons, teen centers and more. The emphasis on quality and commitment made Lifetime an attractive business partnership from Caribou Coffee's perspective. From Lifetime's standpoint, partnering with Caribou offered a chance to partner with another Minnesota-based company. It also gave Lifetime a consistently high-quality product to sell within its Life Cafés.

Some patrons may come into the fitness center just for a coffee or sandwich, not a membership. However, says Solow, "We focus our marketing of the Café toward members." With reward cards for coffee, sandwiches and smoothies, in-club mini-commercials of menu changes and sandwich board signs, Lifetime Fitness' members can stay up to date on the latest their Life Cafés have to offer.

A Proudly Brew program is financially easier to start up than a franchise in that it does not require a start-up fee, other than coffee and equipment. (Proudly Brew requires that partners purchase an espresso machine that meets Caribou Coffee standards and, of course, that they purchase coffee and cups from Caribou.) The agreement also does not require royalty payments - all revenues are kept by the café owner. Says Stein, "The more they can sell, the better for them and the better for Caribou Coffee, because we sell more coffee!"

The Fitness Center and Subway

The Fitness Center in Champaign, Ill., draws people in with its Subway Sandwich shop. The idea came about, says General Manager Rich Ruthenberg, because "opportunity met simplicity." The health codes for a sandwich assembly facility are extremely strict. Ruthenberg's certified food managers can easily make smoothies and things along that line, but, for a business of his size, about 24,000 square feet, it would just be too difficult and cost prohibitive to go through the steps to make a sandwich. The best way to provide members this service and work within the law was to have sandwiches catered by the local Subway Sandwich Shop and delivered right to the Fitness Center's door.

A delivery person brings the sandwiches in at about mid-morning, the Fitness Center pays for the cost of the sandwiches plus a delivery fee and then sells them to members for the same price that they'd be sold at Subway. "It's a great way to [give more value to] our club accounts," says Ruthenberg. Another way the Fitness Center adds value to its memberships is by offering dry cleaning drop off and pick up. Both are a "low load on the club, but provide important services to our members," says Ruthenberg.

Mint Fitness goes organic

A name-brand product isn't the only way to achieve success with fitness center cafés. Mint Fitness, Washington, D.C., offers a holistic health experience with its café. Says Mina Shahriary, juice bar manager, "The idea behind the menu is that all our products are organic and as seasonable as possible. We also purchase only from local farms whenever possible. We use raw ingredients, or living foods, and all of our offerings are vegan or can be made vegan."

Mint's ingredients are what make its products so unique, including nuts, seeds, avocados, hemp, coconut and flax oils, bee pollen and more. The café is open to members and the general public, and attracts the health-conscious consumer. Open since December 2006, the café at Mint is a great success. It has a sunny, open lounge area, chalkboards listing daily specials, and an inviting, simple atmosphere.

Putting it all together

Fitness centers looking to add a café should have a well-thought-out plan for providing a fresh and consistent product for every member, every day. "We tried to get fancy with what we offered in the past," says Tavia Patusky, acting general manager of the Healthworks Fitness Center for Women, Boston, Mass., "but our members brought us back to the basics." Whole grains, fruit, yogurt - the cafés at the city branches of Healthworks thrive on grab-and-go options for time-crunched members. Branches in the suburbs, which have more stay-at-home moms, have greater success with omelets, french toast and other made-to-order items.

Managers also need to think through spacing requirements, such as preparation space, counter space for equipment, and space for refrigerators and freezers. Will you provide tables and chairs for patrons? What will they look like, and where will you put them? If you don't have the room for multiple seating areas, perhaps a comfortable sofa, chair and coffee table will work. At the city branches of Healthworks, fewer tables at the café itself and more tables in the Internet café area are needed; members check email while grabbing a quick bite to eat. In the suburbs, more comfortable and conversational seating areas are offered.

You'll need staff to not only make the menu selections, but also to keep the eating area clean throughout the day. Also, at least one person on duty at all times must be a certified food manager. If you intend for your menu offerings to be made on location, you'll likely need two staff in the kitchen area and one at the register, which is the setup at Healthworks. Lifetime Fitness, however, is experimenting with even more counter help in the form of grab-and-go and made-to-order lines. Member feedback suggests that time is everything, as members finish their workouts and head outside.

Don't forget signage, marketing both to members and to the public (if you choose to cater to non-members), and any purchase incentives you'll offer. If you go with a company partnership, such as the Proudly Brew program, some of that signage is provided for you; however, there will be requirements for walls, newsletters, sandwich boards, etc. "We absolutely have members from the community come in to enjoy our café," says Patusky. Healthworks also takes fresh muffins, cookies, etc., to say "hello" to nearby businesses and introduce its products. "Word of mouth is our biggest advertiser," she says.

Adding a café can be a fun way to put your own stamp on your facility, and there are many options out there to help you. Bon appétit!