The price difference is a result of the franchise agreement between Bama Dining and the restaurant. Most restaurants in the Ferguson Center kept prices close to off-campus prices, but Chick-fil-A prices on campus are significantly higher. A Chick-fil-A chicken sandwich combo at the Ferguson Center, for example, comes with a 32 percent markup compared to off-campus prices.
Kristina Hopton-Jones, director of UA Dining Services, said restaurants have a great amount of control over several aspects of on-campus franchises.
“Bama Dining holds the franchise license for the national brands in the food service locations and the brand determines the price in most cases,” she said. “Just as the brand determines the equipment, fixtures and signage, they also determine the pricing. The pricing tier assigned for the locations comes from the brand based on the franchise agreement.”
Hopton-Jones also said Bama Dining runs all of the food services on campus, and the brands are brought to campus through market research, surveys, focus groups and current trends.
In an emailed statement, Denise Schilling, a customer care representative for Subway, said the on-campus restaurant has a large amount of leeway in setting prices.
“As all Subway locations are individually owned and operated, pricing, promotions and the acceptance of coupons may vary from location to location,” she said in an email.
Chick-fil-A Spokesperson Mark Baldwin said the company works with the University to set prices for on-campus franchises.
“We work with our food service business partners in conjunction with their client – The University of Alabama, in this case – to establish on-campus pricing that meets guidelines that Chick-fil-A has for both on- and off-campus franchise locations,” he said.
Companies like Subway and Chick-fil-A work to set their prices for food service partners, but food service providers also conduct their own research on pricing. Aramark, the food service provider that runs Bama Dining, does annual research to help determine on-campus prices.
“We conduct a market price analysis twice a year to ensure that we are price competitive,” said Karen Cutler, director of corporate communications for Aramark. “Our national brand partners set the pricing for franchise locations to ensure they are competitive with off-campus locations.”
According to a food service contract between Aramark and The University of Alabama, Aramark can adjust prices as they see fit based on their research. The contract states, “Any price increase must be submitted to the University for approval on March 15th for implementation by July 1st or on November 1st for implementation on January 1st.”
The contract also says temporary price increases are allowed in cases of “unexpected, significant increases in wholesale cost of a food item.”
In addition to conducting market research, food service providers also work with companies to bring their restaurants to campus.
“We also work closely with our food service partners to identify licensing opportunities,” Baldwin said. “Licensed locations on college campuses are an integral part of our business. We currently have licensed outlets on more than 200 college and university campuses throughout the country and we continue to look for opportunities to expand the program year after year.”
In addition to serving the University of Alabama campus, Aramark also provides services to more than 1,400 colleges, universities, private schools, school systems and districts across North America. Aramark also works in 22 countries on four continents.
