Food Courts - the Food Operator's Perspective

Much has been said and written about food courts from the shopping center developer and individual food tenant point of view. However, little has been written about collective concerns and the pros and cons of food courts. As a consultant to shopping center developers, retailers, and restaurants, I am uniquely qualified to respond to this topic. Additionally, I set up the original Kentucky Fried Chicken development department in the latter 60s. Finally, I have recently written a book entitled, Restaurant and Fast Food Site Selection which will be published by John Wiley & Sons by the end of the year. The book reflects my over 33 years addressing food location opportunities and problems. From both the developer/owner and food operator's perspective, food courts have not been a panacea.

It is important to understand that food courts were established, not to help the fast food industry, but rather to address the shopping center industry's desire to add fast food facilities to shopping centers. Developers and owners did not want to provide the space to individual operators to which they were accustom. Common seating was the answer. Furthermore, the objective was to capture more rent, and hopefully, overage percentage rentals. In some cases, they succeeded, while in others, they failed.

The original concept of food courts was a collection of "Ma and Pa" units featuring various types of sandwiches, hot foods, soft foods, and deserts. Ma and Pa operations were easier to deal with, entering with great expectations. Unfortunately, the vast majority did not reach those expectations and either lived out their five year leases or failed. Most Ma and Pa's didn't realize that the rent was only part of the cost of operating in a mall. When they received the bill for Common Area Maintenance (CAM) charges, including real estate taxes, maintenance, merchants association, snow removal, security, food court clean-up and others, each nearly had a heart attack. For those who did do well, they experienced the kick-in of the "percentage lease" requiring an additional rent obligation.

Some Ma and Pa operations became new chains. Most experienced some shaky moments. However, with modification and consideration of their placement in the food court, many have done very well. In fact, a few have grown to large companies, such as Sbarro's.

Developer/owners had a belief that a cookie-cutter approach could be used in developing food courts. Time has proven this situation wrong, since each mall has a character of its own. Much of that character is affected by the age and income of the frequent visitors to the facility. Thus, what works in a food court in one mall may fail in another.