For most c-store chains, it goes without saying that foodservice must play an integral part in driving traffic and helping maintain sales at a time when gas and cigarette revenues are down. But with so many possibilities to consider, from adding a Dunkin’ Donuts to developing a stir fry offering, deciding which foodservice program will best serve customers is where it gets tricky.
But for Mark Meyer, president of Keck Oil in Des Moines, Iowa, the decision to add Maid-Rite to his Petropointe BP station was an easy one.
Meyer’s company has been in the fuel and transportation business for more than 70 years. A BP branded distributor, the company delivers BP and unbranded fuels to more than a dozen c-stores, and also delivers food commodities through its trucking business, servicing Iowa, and parts of Alaska and Illinois.
At one time, the company also operated four full-service car washes, which it sold about 10 years ago, and operated five other c-stores. Today, the company has pulled back from the retail side of the business, continuing with its Petropointe BP Amoco station in Clive, Iowa, a suburb to the west of Des Moines, and focusing on its primary business as a gasoline and diesel fuel wholesaler. Nonetheless, foodservice has breathed new life into its retail operation.
On a Roll
About three years ago, the the company decided it could benefit from the addition of a fresh food program. Keck Oil owned land to the south of its 2,400 square-foot c-store and wanted to leverage the extra space to generate additional revenue. They decided a foodservice program would be a profitable way to further serve its c-store customers, while putting the extra space to good use.
“We were looking for a fast food add-on, and there was already a McDonald’s just down the street. So that eliminated the option of a Burger King or Wendy’s type operation,” Meyer said.
Meyer knew they needed to do something different that would give consumers an alternative to burgers and fries, so he decided to give the Maid-Rite foodservice program a try.
Founded in 1926, Maid-Rite is one of America’s first quick-service casual dining franchise restaurants offering customer favorites like the original Maid-Rite sandwich consisting of a special grind of low-fat ground beef, made-to-order with seasoning and served on a warm bun.
“The sandwich option worked for us,” Meyer said. “Maid-Rite (also headquartered in Des Moines) is a locally operated brand and, because it has sandwiches, it’s not a direct competitor to McDonald’s hamburgers. We thought it would be something that would be a little bit unique, and they had really reasonable entry fees that were desirable.”
Maid-Rite also stepped to the plate and offered a variety of different layout options to help maximize the space available at the location.
Customers Meet the Sandwich
From concept to opening, it took just six months to get the 1,200-square-foot addition approved, built and ready for operation. Once the doors opened, customer response to the foodservice offering was immediately positive.
“Older customers remember the sandwich as something they had as a kid, and they come in all excited and say, ‘wow I haven’t had one of these for years.’ So it’s a nostalgic type of thing, and a lot of people were happy to have that option,” Meyer said.
The vast majority of customers order the classic Maid-Rite sandwich, which also is called the “loose meat sandwich” for the crumbled ground beef it holds. The sandwich is available in different sizes and varieties, and can be custom made with cheese or chilly toppings and so on.
The only drawback to the popular loose meat sandwich is that it’s not the best food for customers looking to dine in their car or while walking down the street. “It’s a messy type of sandwich to eat, so you need to be sitting down while you eat it,” Meyer said with a chuckle. “It’s not something you can hold in your hand and eat while you drive.”
Luckily, the facility offers enough tables to seat 37 customers, and also has an outdoor seating area. Most customers, however, opt for carryout orders, and bring the sandwiches back to the office or their homes. For customers who do want to grab-and-eat, the menu also offers a pizza burger, chicken strips and tenderloin that work better for eating on-the-go. Sandwiches can be purchased for $3 to $5.
Customers also can opt for a number of sides, including cheese balls, onion rings, French fries, soups and popular hand-dipped or soft-serve malts. In the past, Meyer tried a pizza and salad offering, but found it wasn’t nearly as popular as the Maid-Rite sandwiches, and that traffic count was not high enough to justify all the work that went into the preparation.
One advantage the c-store’s Maid Rite service has over the nearby McDonald’s is that it breeds customer loyalty. Consumers looking for a value meal might weigh whether Wendy’s or Burger King has a better deal than McDonald’s. Maid Rite loyalists, on the other hand, aren’t going to find the same type of option at another nearby store.
“If someone wants a value meal or a drive-through, which McDonald’s has and we don’t have, then McDonald’s is where they’re going to go. But if somebody wants something different from the hamburger, they’re going to come to our place,” Meyer said.
Despite the positive customer response, Meyer said opinions are mixed on whether the addition of the Maid-Rite program is driving more traffic into the c-store. “It exposes the store to people just coming for the Maid-Rite, but the drawback is it adds congestion at times and that might turn off some c-store customers.”
Meyer said Maid-Rite is a solid choice for c-stores if they are seeking an established QSR program without a high initial investment cost and with reasonable franchise fees. “Especially if you have a small portfolio and want to do the chicken program, they offer a variety of products and do not have a huge startup cost. It’s about a third or a fourth of the cost of what it would be to add a McDonald’s.”
Maid-Rite estimates one of its typical franchise restaurants in a leased 1,500 square-foot facility, including the franchisee fee, equipment, millwork, inventory, furniture, fixtures and working capital, would cost an average of $175,000 to $250,000. The brand’s average ticket ring is $6.50
Even with the success of the foodservice offering, Meyer isn’t looking to expand his retail operations anytime soon.
“Retail is a tough market,” he said, adding that the company is going more in the direction of the wholesale fuel business, which it would like to expand with more commercial accounts, including convenience stores or other types of businesses.