Photo courtesy of Focus Brands
Cinnabon and Auntie Anne’s plan to move outside the mall. But they don’t plan to do it alone.
Both snack concepts are as much a part of American shopping mall culture as The Gap and teenagers. Still, parent company Focus Brands, the Atlanta-based brand operator, is eager to find more development opportunities outside the confines of fluorescent lights and food courts.
Focus recently signed a 10-unit agreement with Fresh Dining, an existing franchisee of Auntie Anne’s, to develop 10 Auntie Anne’s / Cinnabon co-branded locations in New York.
It comes after the company opened its very first drive-thru Aunt Anne, who was co-branded with Jamba at a location in Atlanta last May. The company has since signed an agreement with an operator that will carry the cobrand to the Dallas-Fort Worth market. And other Jamba operators are interested in adding the pretzel concept to their restaurants.
“Cobranding has been around for many years at Focus, but primarily in the captive / commercial space market,” said Brian Krause, Director of Development at Focus, in an interview. “Where we start to lean more, we continue to evolve the cobrand outside of these malls. This is where we start to see more of those open over the past couple of years.
Focus operates Carvel, Schlotzsky’s and Moe’s in addition to the three aforementioned brands. And the company hasn’t given up on expanding into non-traditional places where Cinnabon and Auntie Anne’s have always been most popular.
Focus has teams dedicated to developing in individual non-traditional markets, including shopping malls, universities, travel centers and airports. “If done the right way with the right development partners, there is still a lot of room for growth in these areas,” Krause said.
But Cinnabon and Auntie Anne’s have been more dependent than the other Focus concepts on non-traditional places and in particular shopping centers. Both brands suffered in 2020 at the worst of the pandemic.
Sales of the U.S. system to Cinnabon, which operates more than 900 locations nationwide, fell 29% in 2020, according to sister company Restaurant Business Technomic. Sales at Aunt Anne’s 1,200 stores in the United States were down 38%. The majority of locations for both brands are located in shopping malls.
Brands depend on mall traffic to drive their sales, and that mall traffic has plunged off a cliff in 2020. But there is evidence that it is coming back. According to Placer.ai, indoor shopping center traffic improved from a 24% decline in the first quarter to a 4.4% decline in the fourth quarter. In outdoor malls, traffic improved from a 12.2% drop to a 1.6% drop.
Yet it is difficult for malls to take advantage of current trends like takeout and delivery. And Krause said the channels’ respective customers are asking for more accessibility to the concepts. “They want to buy them when they’re not just shopping in the mall,” Krause said.
The challenge for Focus is that the brands rely heavily on pedestrian traffic, but their unit volumes do not necessarily justify the rents that accompany such frequented sites. This is where co-branding comes in. By merging two complementary brands, Focus believes that they can work more efficiently to be able to access such sites.
This makes the 10-unit deal in New York so important. The units will be located in locations that are accessible on the street, but still have “highly captive markets” with a lot of foot traffic that will pass and likely smell the cinnamon buns or pretzels, then come in and look for some. “These are always markets with a lot of foot traffic,” Krause said. “We can go in and test the concept. “
If the test works, it could spur the further development of true co-branded units outside the mall with better real estate or drive-thru locations, he said.
“They both have proven to work well together in captive audience settings,” Krause said. “The next step is to bring them closer to the street. “
This gives the company a chance to test Cinnabon, in particular. Aunt Anne was more advanced. The brand goes to Jamba locations with drive-thru, giving the company access to convenience-driven customers. About 70% of Jamba locations have such lanes.
Either way, the company is careful about where it places these co-branded units. If they’re going to be working outside of the mall, they need the right mix of customers nearby. The first drive-thru location, for example, was across from a high school and near other restaurants and a hospital.
“We’re focused on the right demand generators,” Krause said. “We will be looking at the markets where we think brands will be put in place to be successful. We want to be very strategic with where we’re going.
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