Signing a long-term lease in a high-traffic shopping mall can be extremely expensive and risky if your food concept isn’t proven. According to this article on MarketWatch.com, you should expect to pay between $50 – $100 per square foot monthly for the most desirable retail spaces in America. In smaller shopping malls in mid-size metro you can expect to pay more $15 – $25 per square foot. Either way, the monthly dues are significant.
That means if you decide to lease a modest sized location, you can expect to pay $1,500 – $5,000 in rent minimum each month. This obligation is even more daunting considering many landlords require a multi-year lease commitment that can leave entrepreneurs on the hook for hundreds of thousands of dollars in commitments. But if these expensive monthly rents don’t fit into your business plan, we have good news. There are more affordable options that still allow you to leverage the foot traffic of a shopping mall to reach customers.
The solution for your business could be to start a food or beverage kiosk in a food court or shopping mall kiosk instead of a storefront. The first advantage of this path is the cost. As you might expect, renting a kiosk location in a mall will be much more affordable than the alternative. In some locations you’ll be able to get started for $800 per month in rent.
In addition to the lower monthly rent, shorter lease terms are common with kiosks or carts. It’s not out of the ordinary for a mall kiosk to rent a space in only the most profitable months of the year from October – December. After the peak sales season is over, vendors leave and often don’t return until the holiday season next year.
The ability to structure a short-term lease agreement is much more advantageous for vendor’s. It’s been well documented that the American shopping mall and retail industry isn’t as vibrant as it was in the 1980s and 1990s. If you started a food kiosk in a shopping center and sales begin to dwindle, you can quickly adapt and easily move the business to a more profitable location. This isn’t an option for stores with a 5-year lease agreement in place.
If you’re in the market for a food service kiosk, you aren’t short on options. An almost unlimited menu of food items can be served from these versatile and mobile units including hot dogs, pretzels, corn dogs, pizza, coffee, smoothies, gourmet popcorn, and ice cream are the tip of the iceberg. They are even versatile enough to be used to vend indoors or at open air shopping centers.
All that being said, below is a list of highly profitable menu concepts that work well with a kiosk. These kiosks are often positioned in malls, but if you think outside the box can be profitably placed in other locations too like college campuses, casinos, hospitals, or large corporate offices.
Snow cone or Shaved Ice Kiosk
Below is an example of a snow cone kiosk recently built for a customer. This kiosk was designed to be taken to a mall or area events. Since mobility was important to this customer we used all aluminum material for the cart so that it would be light and transported easily.
As you’ll see in the video everything the vendor needs to operate their snow cone / shaved ice business is right here. There’s even room for storage available inside this mobile unit. Units like this start at around $9,000 making this a viable opportunity for anyone. Depending on the size of the cup, it can cost as little as $.20 cents per snow cone to the vendor (depending on size). This same snow cone can be sold for $3.00 in most locations making it extremely high-margin.
Mobile Coffee Kiosk
No doubt you’ve seen a coffee kiosk at a mall, airport, or even a grocery store. In fact, these little coffee kiosks are so profitable that publicly traded companies like Starbucks have jumped on the bandwagon. You can also take advantage of this too! As you may be aware, beverages are an extremely profitable category… especially coffee.
It goes without saying that you want to serve a high-quality product. According to this Investopedia article, you can get a premium pound of coffee for about $15.00. You should be able to serve about 23 cups of 12 oz. coffee conservatively per pound. This breaks down to around $0.65 cents per cup. Add on another $.35 cents for the cost of the cup, lid, napkin, complimentary sugar and cream. You could then charge $2.00 per cup for a basic premium roast and be profiting around $1.00 per cup. Naturally you would be charging more for foam, flavor pumps, Espressos and other drinks. Either way, it’s a highly profitable space to be in.
The smoothie kiosk is another option that can be highly profitable and aligns well with the people’s goals to eat and drink healthy. The most popular smoothie options include flavors like strawberry or blueberry. But there are plenty of niche varieties that can be served to cater to a specific audience. For example, you could offer a line of organic smoothies. You could also serve smoothies designed to provide protein and build muscle or an extra Vitamin C boost to fight cold and flu season. The options here are almost limitless. A regular sized smoothie can retail for $6 – $8 a piece leaving the business owner plenty of profitability as well.
Ice Cream Kiosk
Finally, the ice cream kiosk is an extremely popular and beloved option in shopping malls. This kiosk can come in many different forms, including soft serve, frozen yogurt or scooped ice cream. No matter where you plan to conduct business this a highly profitable concept, no matter what variation you choose.
Let’s say for example you decide on an old-school ice cream shop concept with scoops. You should be able to get a premium tub of ice cream for around $30. You’ll get 55 four-once scoops of ice cream per tub working out to a grand total of $0.55 per scoop. As the business owner, you should build a buffer into these figures of course because everyone has waste and scoop size is not an exact science. You’d be hard pressed to find an gourmet ice cream place serving cones under $3.00 a piece… Leaving you the business owner with plenty of margin.
The next time you go to a mall, pay attention to the different types of food service kiosks that are in operation. You’ll likely stumble across other variations not covered in this piece like soft pretzels or kettle corn. There are literally hundreds of food business opportunities like this that can be started affordably and with less risk than investing in a traditional retail space. The combination of lower cost, increased mobility, and flexibility to offer a wide range of menus make these businesses attractive.