Shame it isn’t as simple as signing on the dotted line.
"You’d think," said Lynn Mitchell, one of six owners at the new RediGo Food Mart chain in Lake County, Ohio, "that we could sit down, have a few beers and come up with a name."
But then you’d be thinking like someone who never rebranded a faction of convenience stores that had just been released from a decades-old franchise agreement. It actually takes a lot of sitting down. And probably a lot of beers, too.
"We were these six hard-headed business owners trying to come up with a name," said Angela Broski, one of six c-store operators who two years ago managed to exit a franchisee agreement held by CF Capital Assets’ struggling Convenient Food Mart (CFM) chain.
CF Capital Assets, which operates about 300 CFM stores in eight states in the Midwest, filed for bankruptcy in June 2005 and, a year later—as part of its restructuring—allowed a handful of operators to buy out of franchise agreements, using the money to pay off its debts.
Among the franchisees offered buyouts: Angela and Steve Broski, Lynn Mitchell, Joe Prezioso, Bill and Betty Stange, Frank Gross and Woody and Mary Jedlicka.
In June 2006, the group secured their buyouts, rolling onto the northeast Ohio market seven months later as RediGo Food Marts.
KNOW THY MARKET
The six RediGo stores range in size from 3,000 square feet to 5,400 square feet. The most notable feature the new chain carried over from the erstwhile CFM brand: the foodservice program. Made-to-order delis and fried and baked goods at the six stores possess similar traits, but each owner has enough latitude to develop menus matching local tastes.
"We’ve been established here for years," said Joe Prezioso, owner of RediGo in Painesville, a town with dense pockets of Hispanics, African-Americans and other minorities. "We pretty much know our customer base."
Prezioso’s store leads the six RediGo sites in sheer quantity of fresh-packaged meats. A 32-foot, open-air cooler displays fresh-cut ham hocks, ham shanks and specialty items like Chorizo, a spicy Spanish sausage, that are all cut and blended in the store’s kitchen.
"We’re not your typical c-store at all," Broski said. "We’re a mini superette, for sure."
Indeed, the Health and Beauty Category at RediGo is a testament to this. At the Painesville RediGo, HBC products consume seven 8-foot shelves, while a 6-foot rack sports an array of nylons, one of which was added specifically for black female customers.
It’s the same story at other RediGo stores. Broski and Mitchell’s stores sit in middle-class, suburban communities, so they typically keep an ample selection of wines and import beers.
"We’re very flexible," Broski said. "We understand that each store has to be able to market to its own customer base."
STRENGTH IN NUMBERS
Just past their first anniversary, the RediGo owners are already floating plans to create a RediGo Express concept and add at least six more independent retailers to the chain in the next year.
The uninhibited growth agenda is bolstering what Broski has found to be the most important aspect of this synergy among the store owners: buying power.
"Competitive pricing," she said. "That’s probably been the biggest draw to us coming together as a group—those numbers that we can present to those vendors."
The bargaining power created by a six-store chain wouldn’t seem like much at a glance, but historically strong sales paired with long-established relationships with vendors—as well as new relationships with suppliers looking to court a burgeoning chain—is making for effective promotions at RediGo’s stores.
The biggest change RediGo has made since shedding the CFM brand came in the way of dairy products.
To differentiate from Convenient Food Mart, RediGo shifted its dairy to Smith Dairy and Ruggles, a move that has ultimately allowed the new chain to price a gallon of milk at $1 less than leading supermarkets in northeast Ohio.
Other new programs at the chain include a coffee program by Rituals Estates, frozen beverages by Penguin Ice., as well as a healthy dose of new products from a few new vendors.
Outside the store, RediGo has made changes as well, ramping up its fuel program with diesel.
RediGo sells unbranded fuel at three stations and Marathon-branded fuel at three stations, though because of low margins the category has always been more of an afterthought for the group.
"Fuel is always going to be secondary for us," said Broski, who sold her store just weeks ago to manage RediGo’s marketing, promotions and vendor and supplier contracts. "In the fuel arena, we’re really just babies."
Still, RediGo has managed to milk the pumps for what it can.
By adding diesel fuel and installing new Gilbarco-Veeder Root and Dresser Wayne equipment, the stores are seeing enthusiastic responses from landscapers and others searching for diesel to fill delivery trucks and equipment.
"(Diesel) is a nice draw for those customers," Broski said. "Those landscape and delivery guys spend good money inside our stores."