For many restaurant chains, a location at the Atlanta airport is a cash machine that can become the highest-grossing outlet in the entire operation.
Pierre Panos has seen that happen with the 2-year-old Fresh To Order store at Hartsfield-Jackson International. With double the volume of a street location or more, “it’s a very profitable operation,” says Panos, founder of the chain.
But there’s a flip side. Operating at the world’s busiest airport comes with some unexpected quirks.
“Everything is more complicated at the airport,” Panos said. “Just to change a sign somewhere is a whole process.”
The AJC looked into the sometimes-peculiar rules of operating at Hartsfield-Jackson and came up with 11 ways it can be harder to run a restaurant there, plus one that has more to do with the airport’s owner:
1. Knife control: Butcher knives used in airport restaurant kitchens must be tethered, per TSA airport security regulations. Knives must also be inventoried regularly to make sure no one has taken one onto a plane, where it could be used as a weapon. Diners are not supposed to get real steak knives.
2. Airport hours: Many airport restaurants are required to open early in the morning for the first flights starting before dawn. That often means chains like Shake Shack, which don’t serve breakfast normally, must develop breakfast menus just for airports. Also, many airport restaurants must operate 365 days a year.
3. Feeding delayed fliers: Concourse eateries must stay open later for passengers on the last departing flights, to ensure there are provisions for people stuck at the airport. Workers sometimes must stay after hours due to flight delays and cancellations.
During massive cancellations, a concessionaire may be required to stay open 24 hours a day, with limited notice. “That really takes extraordinary efforts for the employees who are staying to make that happen,” said Anthony Joseph, president of Atlanta-based Concessions International.
4. Price caps: It costs more to operate at the airport because rent is significantly higher, labor costs are higher, it can cost more to build out a location, deliveries can only be done at night and suppliers must carry more insurance to drive onto the tarmac around airplanes. Yet prices at Hartsfield-Jackson concessions are limited to street pricing plus 10 percent – an effort to combat the old image of airport gouging. That’s “almost not enough to cover the extra costs of operating at the airport,” Panos said. Instead, concessionaires increase their profits on volume.
5. In name only: Although many brands at Hartsfield-Jackson are familiar, the restaurants are often run by contractors with licensing or franchise agreements to sell food under that name. So when you eat at the Varsity at the airport, you’re actually eating at a restaurant that is using the Varsity’s brand and that coordinated with the Varsity to develop the menu and train workers.
These contractors know the politics, economics and operational requirements of airport concessions and have the wherewithal to play in this high-volume, high-priced arena. (See reason 12, below.) Brand owners typically get a cut of the action and a ton of exposure, but that can backfire if execution is poor. “You have to do your research,” Panos said. “It’s a fine balance between finding the right operator and the one that has a chance of winning…. If they get you in but they can’t execute your brand, then it’s negative advertising – so that’s the angst.”
6. Gas pains: For years, many of the airport concessions at Hartsfield-Jackson did not have access to gas stoves – meaning they often depended on electric ranges, which are less favored by chefs and can make it difficult to produce the same menus as restaurants on the street. In recent years the airport decided to add natural gas lines to more concourses.
While Fresh To Order wanted to use its trademark flame grill in an open-display kitchen, and looked for ways to enclose the flame in Plexiglas or use other safeguards, the airport would not allow it – which Panos said was almost a dealbreaker.
7. Grill marks: Passions about barbecue run high in the South, but it’s not easy to grill at an airport. Airport concessions can’t easily use outdoor grills like your favorite barbecue place in town. When Mustard Seed BBQ opened at Hartsfield-Jackson earlier this year, the operator compromised by putting an electric smoker in the kitchen.
8. Staff security: Airport workers in secure areas must get security clearances, including criminal background checks. That requires extra time and expense for fingerprinting and badges. And it’s not unusual for a significant share of job applicants to fail the checks, making it more difficult to fill positions. Speaking of security, concessions workers on the concourses go through checkpoints — extra time to get through security lines as part of the daily grind.
9. Pay to park: Many workers at the airport do not get free on-site parking. That means they must pay to park, sometimes using the off-airport parking lots and shuttling into work, sometimes taking MARTA. Workers on especially early and late shifts lose that last option, due to MARTA’s operating hours.
10. Tight spaces: Restaurants on the narrow concourses often have kitchens half the size of a regular restaurant and limited storage space, despite handling twice the volume of customers. And those customers are in a hurry to catch their flights, requiring quick service. The smaller kitchens and the need for speed forces some menu cuts. Fresh To Order, for example, does not sell its pork loin or almond-rosemary crusted chicken skewers at the airport. The chain’s street locations aim to have food at a table in 6 to 7 minutes, but at the airport the goal is 2 minutes.
11. Red tape: The recent invitation to companies interested in opening a hamburger outlet on Concourse B at Hartsfield-Jackson consisted of a 161-page document with 10 different types of forms required, a concessions lease agreement with 11 exhibits and three appendices. After a seven-month process with 10 companies submitting lengthy proposals for the burger stand and some for or other locations, the airport in August said nearly half failed to properly fill out forms and canceled the whole process, sending the companies back to the starting line.
And here’s that 12th one, the one that stands alone.
12. Politics. There, we said it. Just getting a contract to open an airport restaurant can involve submitting proposals hundreds of pages long, detailing everything from the name and concept of the eatery to the menu and design of the location.
They are often team proposals, including a large firm that specializes in airport concessions and brings the capital for the project, a smaller firm that can fulfill minority contracting requirements, and a chain that lends its brand power through a franchise or licensing deal.
The complexity tends to narrow the field to a group of established players. “You don’t find other food service companies because it’s so specialized that it’s not easy to break into,” said Joseph of Concessions International.
Some concession firms have close ties to current or former Atlanta mayors – one is owned by a former campaign co-chair of Mayor Kasim Reed and the daughter and widow of former Mayor Maynard Jackson, for example. Firms without such close connections may not be as familiar with Atlanta’s political landscape.
Airport concessions contracts have for years been subject to lawsuits and allegations of cronyism. Amid a massive round of airport concessions deals in 2012, a spokeswoman for Reed called a legal challenge to the contracts “baseless allegations against the city’s open and transparent procurement process.”