University of Iowa sees food franchises in union upgrade

IOWA CITY — A century after its debut along the Iowa River that flows through the University of Iowa campus, the Iowa Memorial Union early next year will embark on a “major redesign and renovation” that could include new “nationally branded food franchise” options — among other new amenities catering to the evolving needs, expectations and preferences of today’s students.

“University goals include substantial growth of food service choices and conveniences,” according to a UI request for qualifications issued earlier this month seeking proposals from national food vendors interested in establishing a presence in an updated student union. “Our objective,” according to the request, “is to create a model relationship, which now and in the future sets the standard for cooperative agreements between the education and business communities.”

Public-private cooperation is becoming more common nationally in higher education — from long-term operating agreements, like the $1.165 billion public-private partnership involving the UI utility system to shorter-term and smaller-scale arrangements like with book sellers and food franchises.

Driving the restaurant-franchise infiltration of college campuses are both the universities and the businesses — seeing green in the eyes of hungry students — and also the collegiate diners themselves, demanding with their tuition dollars enhanced higher education experiences, amenities and dining options — including national names like Chick-fil-A, Subway, Starbucks or Panda Express.

“Students have expressed interest in having a national vendor as a food option at the IMU,” UI spokesman Chris Brewer told The Gazette. “An RFQ will help us to determine what options are feasible.”

Chick-fil-A — among the more common campus chains — in its most recent disclosure documents said three-fourths of its 384 “domestic licensed units” like those found on a food court in 2022 were on college or university campuses.

The average annual sales volume of those campus “units” — which complement Chick-fil-A’s 2,806 full-scale restaurants — was $1.1 million in 2022, with 119 of the 301 campus units performing as well or better than that unit average.

The highest and lowest annual sales volume for the on-campus Chick-fil-A’s that year was $5.5 million and $62,400, respectively, according to its disclosure documents.

“The university desires nationally branded franchise or licensee operation concepts that incorporate a made to order menu,” according to the UI “food franchise” request, seeking proposals by Sept. 2. “Menus should include entrees, sides, desserts, and beverages, have some allergen friendly alternatives, vegetarian options, and a variety of limited-time-offers.”

‘Complement its offerings’

The university, according to request documents, is seeking three of the “nationally branded concepts to complement its offerings” in the IMU — built in 1925 as a hub for students to connect and enrich their Hawkeye experience.

A century later, the university on Feb. 3, 2025, plans to start work on a $75 million renovation and modernization of about 93,000 square feet in the historic 326,729-square-foot IMU — again focused on student wellness, support and community.

The two-phased project — starting a bit later than originally planned — will co-locate student mental and clinical health services, wellness programs and assistance resources into a new Well-Being Center, featuring a food pantry and case management for student emergencies, among other things.

The updated union — reaching its final design stages — will offer meeting space, multipurpose rooms, improved wayfinding and expanded food options.

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Most of the dining renovation will begin late next year, “with a goal of completing the dining portion of the building in late 2026,” according to the request for proposals that suggests any food franchise agreements it signs will begin Jan. 1, 2025 “for branding, marketing and construction support, with any financial obligations beginning upon the opening of the concept.”

The university intends to enter into five-year financial agreements with the food vendors, with options to renew.

“The intent is that this vendor would be operated by University Housing and Dining, who similarly operate an Erbert & Gerbert’s and Godfather’s Pizza at the IMU,” Brewer said.

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Although the IMU food court for years has sold Godfather’s pizza and Erbert & Gerbert’s sandwiches, the university historically has lacked the same fast-food and chain options that have become common and increasingly popular on other college campuses.

UI Housing and Dining, rather, provides the majority of the food service across campus — using its own employees to staff the River Room Cafe in the IMU, the Food for Thought Cafe in the UI Main Library, or Pat’s Diner in the Pappajohn Business Building, for example.

Following the 2008 flood of the Iowa River that inundated the campus and devastated the campus — causing more than $750 million in damage to 22 major UI buildings, including the IMU — the university’s efforts to restore the union, and possibly add a chain option, were limited by the federal funds it received for the project and restrictions to restore rather than upgrade the building.

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“Usually when you have a relationship with an operation like Subway, or anything like that, they come to you and basically give you the plans that you have to follow to build out the space,” a UI dining director told The Daily Iowan in 2019. “We can’t do that right now because of the (Federal Emergency Management Agency) regulations we’re currently living with.”

With an IMU upgrade now in the works on UI terms, the campus has more freedom.

“Successful concept providers will need to have a team available to work with the university designers, contractors, and others, to aid in the planning and design of the awarded location,” according to the request. “They will need to be able to provide the specific needs to meet the concept’s brand standards.”

Although the university wants any franchise it contracts with to provide staff for training, opening and marketing, administrators also have told prospective partners that “the university desires to run the operation with our employees.”

Financing

With designs still in the works, the university hasn’t disclosed specifics about its union upgrades — but shared with prospective partners that it’s interested in two small-concept franchise units on the first floor and one large concept located on the ground floor of the IMU, across from the Iowa Hawk Shop bookstore.

“This concept is allocated approximately 1,400 square feet,” according to the request, disclosing the small concepts would be located “in a court style setting with communal seating and windows facing the river” and would get about 600 square feet.

Financing for such public-private partnerships vary — like the university’s 2021 public-private deal with Follett Higher Education Group Inc. to operate its Hawk Shop and University Bookstore. Per that arrangement, Follett must pay the university a cut of all gross sales, $250,000 for every five-year operating term and $160,000 more annually for utilities, student program support and library programs.

In the university’s food franchise request, administrators asked potential partners to spell out “any commission structure that is part of the concept,” plus the proposed agreement and renewal terms.

“Contracts can vary dependent upon what is agreed upon, but typically the university pays a licensing fee (sometimes called a franchise fee) and royalties to the brand based on revenue,” UI spokesman Brewer said. “That agreement allows Housing and Dining to serve the brand’s products and use their branding in advertising. Because Housing and Dining operates the space, there is no cost to the brand to lease the space.”

A 2023 trade study and recent research from Inside Higher Ed found students increasingly are seeking flexibility, choice and mobility from their on- and off-campus dining services — and the university hinted toward those student demands.

“The university expects the franchise or licensee will pursue innovative and effective distribution, merchandising, and marketing opportunities — as well as working to further the broader and current university objectives of creating a user-friendly community, sustainable purchasing in food and dry goods, inclusive strategic planning, financial responsibility, community outreach and diversity,” the UI request said.

ISU, UNI franchises

Although the UI doesn’t have a long history in franchised food on campus, Iowa State University nearly 30 years ago in 1996 renovated its Memorial Union food court with the addition of Chick-fil-A, Subway, Panda Express and McDonald’s.

The hub was renovated again in 2008 with a Caribou Coffee; and Froots Smoothies was located in State Gym from 2013 to 2017. In 2018, ISU reported a shift away from franchised food on campus — allowing the campus dining operation more freedom and flexibility “to be creative, to innovate, and meet customer demands.”

"When you work with franchises, you have to ride the bus,“ then-ISU Dining Director Mohamed Ali said at the time. ”You're limited to what they want you to do, because they need to protect their brand.“

He also bristled at the notion of sending franchise commissions out of Iowa — letting the Caribou and Froots contracts expire.

“ISU Dining is always evaluating dining options on campus to provide a mix of franchises and self-operated venues that meet the needs and tastes of students,” ISU spokeswoman Angie Hunt told The Gazette about the additions and deletions of franchised food options on the campus over the years. “The decision for each franchise varies, but may be due to changing space needs or opportunities for ISU Dining’s culinary team to create a self-branded concept.”

Currently, Sushi Do and Panda Express in the Memorial Union are the only two food franchises on the ISU campus.

“There are other brands offered on campus, but not as franchises,” Hunt said, pointing to “Starbucks Proudly Serve,” “Caribou Proudly Brew,” and Godfather’s Pizza as examples of where the national products are served.

The University of Northern Iowa also serves Starbucks and has Godfather’s Pizza and Kachin Sushi in its Mauker Union. Past food franchises at UNI have included Erbert and Gerbert's, Hardee's and Blimpie.

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com