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WBB CONSULTING 3/4/2016
Table of Contents
Executive Summary 3
Property Map 7
Expansion Plan 8
Farmers Market 10
Lotus Partnership 13
Boba Loca 15
Cup o’ Joy 18
ICON Plaza 24
Food Truck 26
This deliverable aims to answer two key questions for Boba7:
1. Which locations near USC have the greatest potential for expansion?
2. With this longterm goal of expansion to USC in mind, what shortterm and midterm
strategies can be used to gain exposure to and penetrate the USC market?
RESEARCH & METHODOLOGY
To identify highpotential locations, we used the site selection factors outlined in Kunsoon
Park and Mahmood A. Khan’s “An Exploratory Study to Identify the Site Selection Factors
for U.S. Franchise Restaurants.”
The following six factors guided our analysis:
General Location Refers to a general area within a city. Physical characteristics and area
characteristics will be considered. The factors related to the general location include but are
not limited to population (density), market statistics, and neighborhood.
Position of Site Site is a specific piece of property. Size, parking facilities, accessibility of
utility and public services, convenience, and visibility are factors included in the position of
Demographics Information pertaining to consumers will be collected including data about
age, sex, occupation, income, food preferences and potential for future growth and
Traffic Information Traffic flow patterns are important for the analysis of the site. The
factors related to traffic information include traffic counts and patterns, and frequency pattern
of traffic flow.
Competition A restaurant operation needs to consider its actual and potential competition.
The factors related to competition include but are not limited to location and operating results
of competitor, and proximity to competitors.
Cost Consideration Costs associated with the development of the site need to be calculated
carefully. This includes both the cost of purchase and the cost of site development, which
covers factors such as building, landscaping, and the provision of associated facilities such as
car parking and access roads. The cost of improvement–renovations and modifications–is
also an important consideration.
Before delving into our expansion options, the following sections represent common
elements amongst all expansion options.
See Appendix for full research paper
Given your target is the bobahungry population, the
University Park area is a great location to capture such a
target market. The university is in the heart of Los
Angeles, ten minutes away from Downtown to the
southwest. The school itself presents a constant volume
of customers; USC is home to more than 43,000
students and nearly 3,945 fulltime faculty. The
Housing Density Map on the right shows the estimated
student population in these regions around the campus.
While the Asian population in the area is not as large as
the White or Latino populations, the University Park
population is relatively young. The racial demographic
might imply that many individuals have little
experience with boba, but there is still a significant
opportunity to provide a lounge experience for young
USC Students (201516 academic year):
The surrounding residential population is
extremely large, not only because of USC,
but also because of the neighborhoods that
have formed around Downtown Los
Angeles. Both the daytime and evening
populations stay very dense. In the daytime,
most students keep within the college
campus, venturing out only on cars, along
University Park, and towards residences
north of the Campus. The evening
population booms because of USC’s free
Numbers courtesy of http://about.usc.edu/facts/
The working population around the USC area is also quite large, given the USC staff and the
various businesses that operate in the area. It is advisable to target the former group as most
USC staff tend to utilize oncampus food facilities.
In the University Park area, income is heavily
polarized because the neighborhoods to the west of
USC are considered “lowincome” areas by the Los
Angeles Times while USC itself houses some of the
richest students in the nation. The population of USC
is made up of largely white, AsianAmerican, and
international students with relatively large disposable
incomes; the latter two groups are culturally disposed
to consume boba. The surrounding residential areas,
however, are largely Hispanic and Black.
Interestingly, during research conducted on the west
side of campus, a majority of the customers was
Hispanic and came from the local community. On the northeast side, it was largely Asian
students. A large portion of customers for businesses
around USC come from student dormitories, which
house roughly 4,000 students. A large section of the
residential students on the West side is Asian
only are the demographics of USC’s student
population ideal for your Boba product, it seems like a
sizeable portion of the local population has already
taken to Boba and would be potential clientele once
you choose your preferred method of expansion.
USC freshman classes are usually around 5,000 students. Webb, Flour, IRC, and Parkside make up half of
USC’s freshman housing spaces
While we would have liked to confirm the demographic makeup of the dorms, USC Housing keeps that
COMPETITION AROUND USC
Opening in the University Park area, Boba7 would face the following competition:
1. Boba Loca
2. Cup O Joy
3. Trio House
4. Volcano Tea House
5. Boba Food Trucks
6. HASHTAG Coffee and Tea
As highlighted in the map on the right, the main boba vendors
are concentrated towards the northeast side of campus,
including Cup o’ Joy, Trio House, and Volcano Tea House,
which are near the intersection of Figueroa and 30th
other competitors are in the form of Boba Loca on the west
side of campus and 2 Boba food trucks to the North, namely
The Boba Truck and Phantom Food Truck.
Based on our own market research, we have reached a conclusion that Cup O Joy poses the
greatest challenge, followed by The Boba Truck, to Boba 7’s planned expansion in the USC
region. The Boba Truck tends to have greater traffic than Cup o’ Joy; however, the truck is
only parked at USC one day a week, around lunch hours until 5pm. The Phantom Food Truck
stays for an even shorter period, and does not tend to attract the same crowds. Ultimately,
Cup o’ Joy is well known for being cheap and accessible and so much of USC goes there
solely for convenience’s sake.
HASHTAG Coffee and Tea is the most recent competitor to join the mix. It is located much
farther north and is marked with the purple pin on the above map. In its one and a half year
presence near campus, it has developed a reputation as a high quality alternative to Cup o’
Joy. It is, however, nearly a mile away from campus and so it does not dominate the space
and has not made any solid steps towards capturing the imagination of Boba lovers around
Competition is greatest and attracts most people to the North East side of campus
With an established culture and large number of options, the northeast side of campus attracts
most individuals and poses the largest threat if Boba 7 were to position itself in a space that is
not too central.
For closer view, please look under “Boba7 Placement” and note the “Competitors” layer
We started by widely examining all properties within a mile radius of the university campus’
borders both on foot and online, and began to narrow our search to points of interest. We
listed apartment complexes, churches, and university buildings as no priority given the
immense difficulty and high startup costs that would be incurred if you chose to expand
there. Given the success of Study Hall, tucked in the heart of USC’s offcampus housing, we
thoroughly estimated the property values of residential blocks around USC, but also decided
that the startup costs of tearing down the house and constructing a new building would be
The property map provides an overview of all locations within a mile of USC. Each layer
contains different properties, which can be identified in the key located on the left hand side
of the screen. Layers can be selected and deselected as desired to view specific information.
Residential buildings are sorted by their property value in increments of $100,000, as listed
by Zillow, while points of commercial interest are located in the “Traffic Generators” tab.
Competitors are also shown on the map.
The link to the Boba Placement Map will be shared via Google Drive.
We have accumulated our research into an adaptable expansion plan, containing shortterm
and longterm solutions. Summaries are provided below, followed by full reports for each
Engaging through the USC farmers market
By participating in the USC farmers market, Boba7 could potentially open up a new revenue
stream while penetrating the USC market segment without the highstartup costs of opening a
store or a food truck. Although sales are limited by the fact that the market only takes place
once a week, this option could serve as a revenuegenerating “stepping stone” to a physical
location or as a chance to try out the wholesale tea idea by selling tea directly to customers.
We recommend that you reach out to Raw Inspiration in order to find out specific
information, because the USC farmers market could be a valuable opportunity for Boba7.
Possibility of a partnership
Partnering with Lotus Lounge could help provide the necessary exposure for Boba 7 to create
its own brand in the long term. Lotus appears to be a successful establishment, drawing most
of its customers during the evening hours. By partnering with Lotus, Boba7 should be able to
save itself a great deal of construction and marketing costs; the fully operational bar should
reduce equipment prices as well. Lotus has expressed openness to the possibility of working
with an alcoholic boba provider, but you will need to contact them and discuss the specifics
of a potential arrangement.
Taking over current locations serving boba
These options come with the necessary equipment, furniture, and brand awareness as people
have an affinity for these current boba restaurants. However, taking over a currently occupied
Boba location could come with the additional cost of buying out the current owner.
Converting one of these Boba locations also might result in partnerships with the current
franchise owners, possibly helping Boba 7 develop a franchise model of its own and look into
partnership development opportunities in the future with greater experience.
For our first boba store expansion option, see “Boba Loca.” For our second boba store
expansion option, see “Cup o’ Joy.”
Expansion through purchase of vacant space
Our last expansion is to take over a vacant lot near USC. Working with these plots of land
will allow you flexibility in store concept, greater autonomy and a bigger shot at redefining
the food culture around USC with a standalone store. This however comes at an extremely
high price, with the rent at ICON Plaza and at the very high price tags held by other
properties around USC.
For ICON plaza, refer to the” ICON plaza” section. For the other locations around USC that
we have identified, please review the Boba Placement Map.
Diversification through the option of a Food Truck
This option does not necessarily represent a physical expansion and was researched before
the rest of the options. Thus, it does not follow the “Six Factors Framework”; rather, it is
presented as an opportunity recognition report.
A food truck could provide the opportunity to sell Boba in the USC area, most likely at a
lower overhead cost than a brick & mortar shop. The model could be a steppingstone to raise
capital for a permanent location and gain brand awareness in the USC area or it could be a
longterm business model. However, there are limitations such as restricted hours of
operation and high variable costs. We recommend that you contact Tyler Kalin at Roaming
Hunger (contact information is listed in the report) to better understand this possibility.
Engaging through the USC farmers market
Option Name: USC Farmers Market
Street Address: McCarthy Quad, on USC campus
Point of Contact: Raw Inspiration
Hours: 11AM3PM Wednesdays during USC academic year
POSITION OF SITE
The USC Farmer’s Market takes place every Wednesday during the academic school year on
McCarthy Quad, located on the South side of campus. The Von Kleinsmid Center
(classrooms) borders the Quad on the Northwest. Leavey Library (USC’s main study library),
Everybody’s Kitchen (one of the three oncampus dining halls), New/North Residential
College (271 students)
, and Birnkrant Residential College (259 students) border the Quad
on the Northeast. Parking Structure X and the South Area Residential College (758 students)
border the Quad on the Southeast, and Doheny Memorial Library borders it on the
Southwest. The Farmer’s Market has very high visibility because it quite literally takes over
the Quad on Wednesdays (see picture below). Parking can be found at PSX or on Figueroa,
although most people attending the Farmer’s Market seem to be students or faculty, who are
not parking specifically to attend the market. Each store has signage, which would be one of
the startupcosts of opening at the Farmer’s Market. The Farmer’s Market is conveniently
placed for oncampus students because of its proximity to Leavey Library, EVK, and many of
the freshman residence halls. I am not sure about the accessibility to utilities; the booths that
sell food seem to use gaspowered stoves.
See http://webapp.usc.edu/maps/ for online interactive map
The Demographic profile for the USC Farmer’s Market is primarily the USC student body.
USC students, as well as faculty, and those visiting USC for tours or conferences tend to have
a good deal of disposable income and a high willingness to spend. Food and drink tents at the
farmer’s market tend to do well with people visiting campus because they often plan to eat at
a restaurant on campus and see the farmer’s market as a great alternative. Those who buy
drinks at Honey Queen, a fruit/vegetable juice stand currently at the farmer’s market, tend to
be students (age 1822) who are grabbing a drink before or after class. Volume of sales is
definitely higher during warm weather; you should expect sales volume to increase
considerably as you get deeper into the Spring semester, or at the beginning of the Fall
One of the reasons this option is so attractive is because the demographic that would be
buying your boba would be USC students, which is the population you would like to target in
the long run if you open a location near USC. A spot in the farmer’s market would introduce
people to Boba7, thus building a customer base while gaining extra revenue to supplement
Boba7’s downtown location.
There is significant student foot traffic at McCarthy Quad because of its proximity to Parking
Structure X and Leavey Library as well as VKC and THH, two very popular buildings for
classes. Also, McCarthy Quad is one of USC’s iconic spots the location of many large events
(concerts, etc.). Thus, it is an important site for people visiting USC. One disadvantage of the
traffic flow is that your target demographic (AsianAmerican students) find their highest
concentration at the International Residence College at Parkside, which is across campus
from the quad. Although these students are often near the quad for classes and for Leavey
library, you would not be close to their actual place of residence.
There is only one beverage company
currently at the farmers market: a stand
called Honey Queen: Organic Fruit &
Vegetable Juice which has big jugs of
sweet juice. They scoop it into cups and
add chia seeds or lychee jelly. They sell
the medium sized cups for $5. As you
See Executive Summary, USC Demographics
See USC Campus map
can see from the photograph, this juice
stand is very popular.
I observed Honey Queen from 12:30 to 12:45 on Wednesday, February 9 in order to make
sales projections for Boba7. Note that because this was peak hours, we estimated that the rest
of the day sees a lower concentration of customers. The numbers are listed below:
Time Period 15 minutes
Customers Served 33
Customers per Hour 132
Customers per Day (Conservative Estimate) 400
Daily Revenue $2,000
Yearly Revenue (based on 30week academic year) $60,000
The price to be a part of the farmers market is the price of $250 weekly for a 10x10 tent or
10% of sales, whichever is greater. In order to gain more information, call Raw Inspiration’s
number: 8185918162 and they can help you through the application process. She could not
really give me much information without your information.
This is a cheap option at 10% of sales rather than the 15% of sales that soi7 takes, especially
considering the volume of sales that the farmers market facilitates. Also, if USC farmers
market works out well, there are other markets run by Raw Inspiration in L.A that charge
lower costs and operate different days of the week. Eventually, selling at these markets could
be Boba7’s primary revenue stream.
There are equipment costs associated with setting up at the farmers market, such as purchase
of a tent and possibly more portable bobamaking equipment. Obviously, these startup costs
are lower than those associated with opening a physical location; however, they must still be
taken into account. You can garner more information on these costs by speaking with a
representative at Raw Inspiration. Labor costs would not change, although I would presume
that you would want a second employee working with you during the farmers markets,
especially if Boba7 is a hit on campus. It is important to note that the increased sales volumes
would most likely come with increased labor costs, because I understand that you usually do
not have a second person working at this time.
Possibility of a partnership – Lotus
Option Name: Partnership with Lotus
Street Address: 3742 South Flower Street, Los Angeles, CA 90007
Phone: (213) 4780090
Hours: SunTues 5pm12am, Wed 5pm1am, Thurs 5pm2am, FriSat 5pm3am
Yelp Review: http://www.yelp.com/biz/lotuslosangeles3
Lotus is a hookah lounge that also serves sushi and shabu shabu. It is a major player in the
“nightlife” and “social lounging” scene in the USC area. The following lists a detailed
analysis of why a partnership between Boba 7 and Lotus would be very advantageous toward
expanding Boba 7’s brand. The management has mentioned that they are interested in a
partnership and that they can discuss further details via email.
POSITION OF SITE
Lotus is strategically located within the vicinity of both USC, downtown Los Angeles, and
nearby retailers. Lotus is the only restaurant located on this section of Flower Street, and
while its bright signage and open concept aesthetic distinguish it from its surroundings, it is
located in a corner, which will reduce the overall visibility of the restaurant. Lotus is located
adjacent to the USC Credit Union and Garnett Apartments and directly across the street from
Tuscany Apartments. Underneath Tuscany Apartments is a strip mall full of restaurants,
including Chipotle, Chikfila, Coldstone Creamery, The Coffee Bean and Tea Leaf, all of
which generate high levels of traffic from USC students. These institutions will help drive
consumers to your location and generate more sales.
For customers not living in these complexes, Lotus is conveniently situated within the USC
Free Uber and Campus Cruiser range and is also easily accessible by walking or biking. This
is fortunate, as many USC students already make the trek out for food. There is a large
parking lot directly adjacent to the restaurant which provides both parking and space for
outdoor social lounging. The building itself is in quality condition and is well advertised.
As previously stated, Lotus is located next to two USC student apartment complexes. USC’s
student population is likely to have disposable income, and many students already enjoy
going to Lotus to use the hookah longue. Lotus generally attracts younger populations who
come out for a relaxing night with friends. Customers are nearly always in groups, and
because of Lotus’s excellent reputation, there is often a waiting line outside the restaurant.
The surrounding residential population is largely Latino, which bodes well for Boba7 in that
many of the local customers may be predisposed to favor your specialty fusion Horchata
Because Lotus opens at 5pm, customers do not start arriving until the late afternoon. All of
the 80 customers observed at Lotus between the hours of 810 PM either arrived by Uber or
by car. Students are more likely to utilize the Uber service, as it is within the free coverage
offered by USC after 7 PM. Cars have easy access to Lotus because of the nearby freeway.
However, despite this timeperiod commonly being associated with the rush hour in Los
Angeles, Flower Street has very little traffic at this time. It appears that this location does not
have much access to incidental passerby, which may serve as an issue for Boba7 to appeal to
locals looking for a new boba restaurant. Despite this lack of constant traffic, Lotus is
generally very busy during its happy hour (MonFri 47 PM), offers an excellent chance for
Boba 7 drinks to gain exposure. Also, there is always somebody in Lotus at any given time to
utilize their Hookah service and this traffic can still be very healthy for Boba7 sales.
Lotus appears to remain successful largely due to its reputation and existent marketing,
meaning that if Boba7 were to choose this location, it would gain a respectable pool of
Competitors such as Trio House and Volcano Tea House have not monopolized the boba
market, while both food trucks only operate during daylight hours. All competing boba
locations, including Boba Loca and Cup o’ Joy, close by midnight, meaning that by
collaborating with Lotus Boba7 would benefit from a threehour monopoly on boba. In
addition, if you collaborate with Lotus, Boba7 will be more than a boba shop, but also
become an instant part of the social nightlife experience, a business aspect your competitors
will not be able to compete against. Boba Bear, a restaurant relatively far from campus,
currently combines hookah and boba in the same way that this partnership aims to
accomplish. Their consistent success bodes well for this potential partnership.
Probably the most attractive aspect of a partnership with Lotus is that there are no costs
associated with purchasing land, construction costs, remodeling, marketing, or licensing. The
inside of Lotus is very spacious, dimly lit, decorated with a “zen” Asian theme, which work
together to create an effective loungelike area. Equipment costs should be low as well, given
that Lotus already has an operational bar. Labor costs should stay around the same level (you
may need to take into account extra hours of operation). Free parking will also save you the
cost of the yearly parking pass you currently purchase. Another notable cost advantage is that
Lotus has an alcohol license, allowing Boba 7 to continue serving its specialty drinks
throughout the entirety of its transition to this location. Also, Lotus’s reputation around
campus is strong enough so that marketing efforts are not necessary to acquire customers and
achieve profits. Lotus already has a TV, music, and wifi.
Taking over current locations Boba Loca
Street Address: Address: 3617 S Vermont Ave, Los Angeles, CA 90007
Phone: (323) 7662622
Hours: 9AM 9 PM Everyday
Boba Loca’s USC branch is located on Vermont Ave, just west of USC. Boba Loca is
bordered by residential areas on the west, and it is not visible from Exposition Blvd or
Jefferson Blvd, the main avenues that daily traffic flows through. Boba Loca is located
within a small strip mall that contains the following businesses: Smart & Final, Citibank,
Togo’s Sandwiches, Supercuts, Advance America, Radioshack, CashAdvance, and Taco
Bell. To the north of the plaza is the United States Post Office’s Dockweiler Station and to
the south is the mediumsized St. Mark’s Lutheran Church. All of these institutions will help
drive consumers to your location and generate more sales. Smart & Final’s size dominates the
area and Taco Bell’s standalone location closer to the street makes it stand out. The
presence of retail outlet Smart & Final, as well as fast food outlets Togo’s Sandwiches and
Taco Bell may also help your sales. Overall, Boba Loca’s general location is disadvantaged
by its distance from major roads and position on the west side of campus, but its proximity to
USC and nearby commercial and retail locations more than makes up for it.
The key drawback for Boba Loca’s position is that most offcampus student housing is
concentrated to the north of campus and USC’s more popular shopping plazas are located in
that general direction, ranging from the North East to the North West along Figueroa and
Vermont respectively. Please refer to the Housing Concentration Map in the USC Location
section of the Executive Summary for a better idea on housing concentration.
The presence of other fastfood restaurants or food stores may help rather than hinder sales, which indicates
that shoppers may be attracted to an area rather than to a specific store. The presence of other restaurants in the
immediate vicinity is often referred to as a restaurant cluster (Okabe et al., 1985; Pillsbury, 1987)
POSITION OF SITE
Within the plaza, Boba Loca’s is in the center and is a focal point of the commercial area in
that regard. While Taco Bell and Smart & Final have been discussed with regards to car
traffic, it is clearly visible from the entire parking lot and sidewalks, and given that most of
your traffic will be coming on foot from USC, Boba Loca’s visibility is sufficient.
Throughout the six hours that was spent monitoring traffic in and out of Boba Loca, the
parking lot was never full. Parking is also free in contrast to the nearby paid parking
structures of USC and so it is common for students to park in this parking lot to avoid costs.
As far as signage goes, there is ample space and infrastructure in place for a welllit sign
above the store entrance. There is a plaza sign near the main entrance of the plaza clearly
visible along Vermont Avenue. Oddly, Boba Loca does not have a place on the plaza sign, so
if you plan to move into this location, plan to work to get your presence up there. Boba
Loca’s site is accessible from both Vermont Ave and 36th Plaza and is quite convenient not
only for traffic coming from outside of the area, but also the local residential and student
populations given that it is tucked in between USC’s campus and residential areas. Boba
Loca is, however, quite far from public transportation and utilities. This plot’s
Commercial/Industrial zoning type will allow you to operate your business as any restaurant
would. Overall, Boba Loca has an average place within its site, but the site itself is a
Boba Loca has a following in the nonstudent population of the area and we recommend that
this be cultivated if you choose to operate out of Boba Loca’s current location. Another big
portion of your customers will be coming from the Webb, Flour, Parkside, and IRC student
dorms. These student dorms are on the western edge of campus and several gates lead out
onto Vermont Avenue. Around 2,500 students live here, a large proportion of which are
Asian, and so put you closest to your target demographic. There may also be more students in
general. Not only are USC students primed for your boba product, it seems a small portion of
the local population towards the west has taken to boba as well.
While there is significant traffic during the day going down Vermont Avenue, the majority of
the residentialtowork traffic flow travels along Exposition and Jefferson. Boba Loca lies
about a mile away from the Interstate 110, so that highway will have little influence on traffic
volume. Onfoot traffic will be quite ample given Boba Loca’s vicinity to the only wholesale
grocer in the area and USC. There is a traffic light on the intersection of 36th Plaza and
Look up this plot’s Zoning Type by using the AIN 5040029025 through this link
Vermont Avenue which will gives the plaza Boba Loca is located in more exposure. The side
streets of 36th Plaza and 36th Street are simpler two lane streets with room for parking along
the sidewalk. These highvolume traffic patterns will remain quite consistent, but only during
USC’s academic year. During academic breaks, especially winter and summer break, most of
your customer base will disappear. A large amount of traffic passes by Boba Loca and the
key to taking advantage of this foot traffic is oncampus marketing and connections while
also building ties with the residential population for the academic breaks.
In its specific vicinity, Boba Loca faces no considerable threat from any other direct
competition and very limited threat to similar cafes and restaurants due to their lack of
influence. However, the dominance of Taco Bell and the absence of any other established
stores within the strip mall might reduce the chances of individuals coming upon Boba 7 by
chance. Having said that, this makes for an exciting opportunity for Boba 7 to start being the
center of traffic in this mall.
Boba Loca’s USC branch is a franchise, part of a 22 branch chain. Given this, the current
franchisees could be convinced to work for you. On the other hand if we were to consider
buying Boba Loca out, the most attractive aspect is there being no costs associated with
purchasing land or construction. Cost of improvement and development could be costly
depending on how much remodeling you wish to do to match your desired theme. The inside
of Boba Loca is elongated, yet spacious with a large skylight; the space lends itself to a
loungelike area. Equipment costs should be low as well, given that Boba Loca already has
all the machinery in place to operate a boba vendor. Labor costs should stay around the same
level as it costs you now. Free parking will also save you the cost of the yearly parking pass
you currently purchase.
Partially because it is away from the concentration of food outlets near the Northeast side of
campus and because of its lack of reputation, Boba Loca sees far fewer customers from USC.
Currently Boba Loca’s USC location has 1.8 stars on Google Reviews, 2 stars on Yelp. Many
people on our team haven’t even heard of the place. There is also a negative perception of the
neighbourhoods west of campus, west of Boba Loca, given its proximity to lowerincome
areas and lack of student housing there.
Taking over current locations – Cup o’ Joy
Option Name: Cup o’ Joy
Street Address: 3016 S Figueroa St, Los Angeles, CA 90007
Phone: (213) 7458569
Hours: 10:30 AM 11:45 PM Monday Friday
11AM 11:45 PM Saturday Sunday
Website: No Official Website
Menu: Physical Copy in Appendix
POSITION OF SITE
Located on S. Figueroa Street between W 30th
and W 31st
Streets, Cup o’ Joy’s visibility
changes depending on the location of the viewer. Northbound traffic and patrons already
inside the plaza, Cup o’ Joy is easily visible; it is in the middle of a strip mall, so regardless
of a consumer’s intended destination within the plaza, they are able to see Cup o’ Joy. In
addition, Cup o’ Joy is easily viewable through the windows of Fatburger, which occupies the
opposite side of the parking lot. The parking lot contains 39 standard parking spots, and is
shared by Cup o’ Joy, its three strip mall partners (Hawaiian BBQ, Arabian Nights Smoke
Shop, an American Express Kiosk, and Fred Lloyd Insurance), as well as Fatburger.
Relocating to this location will keep Boba7 relatively close to the heart of Los Angeles, while
at the same time maintaining easy accessibility. Not only can USC students utilize Uber (Free
after 7:00 pm), but there are stations for both the LA metro bus and train services within
Despite these benefits, the storefront is not visible from southbound traffic on Figueroa,
which may be a limiting factor in attracting new customers Thus, for this location to continue
to be successful, Boba7 will want the Ono Hawaiian BBQ to be successful, as it is the only
shop visible to southbound traffic. At the time of this writeup, this restaurant has not yet
opened for business, so there are no success metrics available.
View from across S. Figueroa.
Boba7 will clearly not want to rely on another restaurant to achieve success, and can instead
rely on its customers will to raise social awareness once it has finished relocating. This
should be relatively simple, as many USC students will be eager to try a new boba shop in the
hopes of finding high quality product, as there is currently no high quality provider near
campus. Knowing Boba7’s superior quality, many of these customers will likely be pleased,
and look to share this new restaurant with their friends.
View from S. Figueroa and W 30th
Street. (Note the lack of branding on the back of the
Cup o’ Joy is surrounded by a vast residential population. Most of this population is
comprised of students, but the location is also situated to reach workers both commuting to
Los Angeles and working in the nearby shopping areas. Cup o’ Joy enjoys premium access to
many University Housing units, as well as the nearby Galen Center and the Fraternity Row.
Because it is one of the closest locations to many of the freshman dorms, including Pardee
Tower, Marks Tower, Marks Hall, Trojan Hall, Birnkrant, and New/North, this location gives
Boba7 the potential to satisfy and maintain a customer base that may continue to support the
company throughout their four years spend on campus. The population of USC is made up of
largely white, AsianAmerican, and international students with disposable income; of which
the latter two groups are likely culturally disposed to consume your product.
Both the daytime and evening populations provide large potential markets. The daytime
population is comprised mostly of students either travelling to class or to the offcampus
restaurants. The evening population, while numerically smaller, appears more likely to be of
relevance. Not only are students more easily swayed to travel off campus because of USC’s
free Uber service, but many students will already be off campus of their own volition, either
due to sporting events at the Galen Center or parties on the Row. The two 2hour observation
periods supported the belief that the area is more active at night, and also suggested that
majority of customers were of EastAsian descent and appeared to be students; a small
portion of the customers did appear to be either permanent residents or employees of nearby
businesses. Though these individuals’ backgrounds were not confirmed, it appears that Cup
o’ Joy does have a small following in the nonstudent population of the area, though it is very
small in comparison to the student following.
Thus accommodating for both USC students and the nearby retailers, the potential market
population is quite large. It will be important to note when targeting freshmen that many will
be predisposed to utilize the oncampus food facilities, as the University requires them to buy
an allyoucaneat dining hall meal plan. This issue in securing freshman customers will be
slightly offset in that many enjoy eating off campus when possible, and the dining halls close
at 10:00 PM, meaning that students attending parties and sporting events will often find
themselves forced to find food off campus. While Cup o’ Joy does have an excellent location
for securing freshman customers in these situations, it will likely miss out on students living
in the Webb, Flour, Parkside, and IRC student dorms, as they are all situated on the western
side of campus. These dorms house around 2,500 students, many of whom are of Asian
descent and could be within your target demographic.
There is significant traffic throughout the day flowing through Figueroa, and the nearby LA
Metro bus and train systems run throughout the day. In addition, Cup o’ Joy lies less than
half a mile from the Interstate 110, giving shops located on S. Figueroa a constant stream of
potential customers. Foot traffic is also quite heavy, given the Cup o’ Joy’s aforementioned
proximity to the Row, Galen Center, and Residential buildings, and should remain similar for
the foreseeable future. Figueroa has four consistent lanes for northbound traffic, as well as
stations the LA Metro Bus stop. Southbound traffic, however, only has two consistent lanes.
This southbound traffic will likely contribute very little to the actual customer base of the
plaza, due to the poor visibility of the plaza. The side street of W 31 Street has 2 lanes and
space for parking, with one lane for each eastbound and westbound traffic. Both Figueroa and
W 31st Street have sidewalk access for pedestrians. These traffic paths will provide
consistent, highvolume traffic that should remain constant throughout USC’s academic year.
During academic breaks, it is likely that most of this traffic will disappear. The speed limit on
Figueroa is 35 mph, and is further slowed by traffic lights and high volume traffic during rush
hour. This will help to provide ample time for drivers to see your restaurant. For individuals
who enter the plaza, there is a parking lot shared between Cup o’ Joy and the other stores in
its strip mall
To maximize the large amounts of traffic near Cup o’ Joy during the school year, I suggest
focusing on oncampus marketing, specifically emphasizing efforts on freshmen, as securing
their loyalty will provide you with a consistent stream of customers for the remainder of their
time at USC. To maintain success during school recess, it will also be crucial to also create
ties and incentives for the local community to choose to visit your boba shop as opposed to
your competition, which will likely be closer to their homes.
Most of the current competitors in USC’s boba market are situated near Cup o’ Joy, which is
actually a blessing in disguise. Boba7’s product is much better than Cup o’ Joy’s, which
according to both student customers and the reviews below, are averageatbest. Boba7’s
drinks are also much higher quality than those of Trio House or Volcano Tea House, the two
other boba providers in the area. Because of the low quality of their drinks, the fact that these
locations carry boba at all is not well known, so if Boba7 implements smart marketing tactics,
it could easily steal the few customers that visit these locations, becoming the only major
provider in the area. However, while this location is excellent for securing customers around
the eastern side of campus, it is worth mentioning that there is a boba shop on the west of
campus called Boba Loca, detailed in the previous section.
Probably the most attractive aspect of buying out Cup o’ Joy is that there are no costs
associated with purchasing land or construction costs. Cost of improvement and development
could be costly depending on how much remodeling you wish to do to match your desired
theme, but is not necessary outside of changing nameplates and the menus. Cup o’ Joy’s
seating area is rectangular, which provides patrons with ample space to socialize and
therefore creates an atmosphere conducive to “lounge” concept that Boba7 wants to capture.
Equipment costs should be low here, given that Cup o’ Joy already has all the machinery in
place to operate as a boba distributor. Labor costs should stay around the same level as it
costs you now unless you choose to hire more employees to help manage the increased
consumerbase. Additionally, Cup o’ Joy has a parking lot, which should eliminate the need
to purchase a parking permit
By buying out a previously existing boba provider, Boba7 will likely have to deal with
preexisting expectations from past patrons. Fans of Cup o’ Joy may be skeptical or even
resentful of Boba7 for buying out Cup o’ Joy, but due to a lack of quality boba restaurants
around USC, they will find themselves giving Boba7 a chance rather quickly and this can act
as an avenue for building a loyal customer base in USC upon moving in. The bigger problem
would be patrons who started avoiding Cup o’ Joy, either for poor service (see below) or low
quality boba. These potential customers might find it hard to step over their hesitance to go
back to the same location as Cup o’ Joy as many of them may still actively avoid the location.
It would be Boba7’s responsibility to redefine the experience so that customers give it a
Expansion through purchase of vacant space – ICON Plaza
Address: 3606 S Figueroa Street, Los Angeles, CA 90007
Leasing Office (213) 7474266
Real Estate Agent (310) 4350446
Store Size: 1700 sq ft
Kitchen Equipment: Available
Rent per sq ft: $5.50
ICON Plaza offers an ideal location, close to the heavily
visited Figueroa stretch and a central location very close
to campus with heavy human and vehicular traffic. The
biggest limitation of this position is that unlike the other
Boba places, ICON plaza is not a strip mall and as such
does not have any parking space available. This would be
the biggest deterring factor as far as this location goes.
There is however, street parking available along Figueroa
during permitted hours. The lack of parking would make
it harder for people to stop and grab Boba. It should not
be an issue once the brand is established.
POSITION OF SITE
The graduate student commuters frequent Starbucks in ICON Plaza and Pizza Studio also
exists right next to the proposed location for Boba 7. This vacant space is opposite the new
Marshall Business School hall being built next to Popovich. Once it is completed, there will
be more people around this part of campus and the businesses nearby will likely see a growth
in demand. Being positioned right next to Starbucks will result in competition and will also
require Boba 7 to not just be a beverage store, but more of a cafe/restaurant with food options
as Starbucks often has regulations with its leasers with regards to the kind of establishments
they can also subsequently lease to in the same complex. This can however be seen as an
opportunity for Boba 7 to grow with another arm to its business or a partner firm with a focus
on food, creating better utilization of the space, and making the rent feasible.
There are over 2,400 students living on campus in the East side along with around 400
students living in Tuscany and ICON Plaza and around 1,000 graduate students who come to
USC while parking their vehicle at Parking Structure A. Most of the other demographics are
similar to those reflected in the Executive Summary. It would be accurate to follow those
details because if you were to choose the ICON Plaza location, you’d be in a prime spot and
should ideally target the entire USC population.
ICON Plaza is on a major road and will easily capture the attention of people passing. It
comes with the option of putting up a name board, and the store is positioned just on the side
of Pizza Studio and further down from Starbucks, which occupies the corner lot of ICON
Plaza’s ground floor.
There are various parking structures, such as PS1, which attract lots of commuting students,
especially graduate students, a lot of whom study on the South Side of campus. Other
frequent visitors include those who live in Tuscany, ICON Plaza and the nearby USC
housing. It is also part of a food stretch, which is walking distance from the East side of
campus and the academic buildings of Popovich and Price. Many of these consumers walk
towards chipotle, chickfila and the other restaurants that operate at Tuscany. The location is
right next to the Galen Center and several bus stops, and it is also on the path that most
visitors to the Coliseum take when leaving from games and concerts. There is usually a full
crowd at Pizza Studio during game days, representing the volume that comes through this
path. The Science Center, Echo Park and other attractions are also close by. However, visitors
typically do not venture onto Figueroa in search of food or beverages, but this can be an
opportunity in the future.
There will be some competition from Popovich Cafe as they typically draw most of the
students studying in the academic buildings. Most graduate students, once inside the
academic buildings, prefer to do this instead of heading to Starbucks although it is just
opposite the street. This could pose a challenge which can be overcome if Boba 7 were to put
up prominent signs.
The other Boba competitors up north on Figueroa Street might still pull customers to
themselves if Boba 7’s products are not able to truly capture the imagination of the users. As
such, this location is at prime proximity, therefore the main differentiating factor would be
the quality of product and extent of differentiation from the other Boba locations.
For you to consider this location, your estimated rent per month will be around $9350, a stark
increase over what you might be currently paying. However, this location is a large space and
comes with the opportunity of partnering with other vendors with whom the rent can be
divided. With regards to cooking equipment, Built Burgers used to previously occupy this
space and the space is built for a cafe or restaurant style business, with the necessary stove
gas and water outlets and kitchen equipment. This will reduce any further costs you might
have to bear.
Diversification through a Boba7 Food Truck
IBISWorld 2015 figures:
The food truck industry is in a period of “Quality Growth” (IBISWorld) that is expected to
continue in the coming years. The industry enjoys a wide consumer base on the west coast,
particularly in Los Angeles and San Francisco. Food truck customers tend to be young (1835
years old) and there are several food trucks located on the border of USC’s campus. The
following chart lists the top cities in terms of food truck, based on 2014 numbers from NCR
Los Angeles 366
San Francisco 193
Washington D.C. 167
New York 116
Many believe that the rapid growth of the food truck industry we see today was catalysed by
the effective marketing and quality food of Kogi, founded in 2008 by Roy Choi (Southern
California Mobile Food Vendors Association). The following overview is provided by
Life Cycle Stage: Growth Revenue Volatility: Medium Capital Intensity: Low
Industry Assistance: Low
Concentration Level: Low
Regulation Level: Medium
Barriers to Entry: Low Industry Globalization: Low
Competition Level: High
The main challenges facing food trucks today are increasing competition and increasing
government regulation. Government regulation varies greatly based on state/city, but Los
Angeles county is relatively foodtruck friendly with only a permit registered to the truck and
a yearly certification inspection (Public Health, County of Los Angeles).
IBISWorld lists the five key success factors for the food truck as ability to control stock on
hand, proximity to key markets, license/permit, effective quality control, and a unique,
differentiated menu. Below is an analysis of these success factors in relation to
Success Factor Description Boba7
Ability to control
stock on hand
experience with restaurant
Experience running Boba7 for
five years, relatively low
wastage costs as reported in
2015 financial statement
Proximity to key
location for a food truck.
Roaming Hunger can help
with this, borders of USC
campus have high volume
Must have license Permit and yearly
Roaming Hunger provides
High standards to pass
Not as many health standards
for drinks compared to foods
Competition from other
food trucks and restaraunts
Past success and unique drink
The outlook for the food truck industry looks positive moving forward; the consumer
confidence index is expected to rise as people gain more disposable income. Here is the
revenue outlook, provided by IBISWorld:
Year Revenue $ million Growth %
2016 889.5 3.8
2017 926.9 4.2
2018 955.9 3.1
2019 975.7 2.1
2020 996.2 2.1
2021 1,012.1 1.6
There are two bobaselling food trucks that operate on the north side of campus near Cafe 84,
namely the Boba Truck and Phantom Food Truck. The Boba Truck, however, only stays a
portion of the day and usually only once a week; the Phantom Food Truck stays even less
frequently. Although these competitors could provide obstacle to Boba7’s growth, they may
also support the popularity of boba and serve as a primer for Boba7’s higher quality boba.
This report provides preliminary information about the opportunities a food truck provides
and the costs of starting a food truck. It is not a complete business plan; the report identifies
resources so that you can explore the food truck option further if you see fit. Roaming
Hunger is a website that connects people with food trucks in their area, as well as provides
services to vendors entering the food truck industry. We have been in contact with Tyler
Kalin, a Marketplace Manager, who has helped us figure out what your options are and what
your costs would be to get into the food truck industry. His contact information is below, and
you can feel free to contact him anytime.
The main two options he gave would be leasing a food truck or buying a food truck, both of
which can be done through Roaming Hunger.
LEASING A FOOD TRUCK
The price to lease a food truck through Roaming Hunger is between $2,000 and $4,000 a
month, usually falling right around $3,000. Tyler would help connect you to a truck that
matches your needs and price range, and he has already sent me the bestfit truck he has
available now. I have attached the information for this truck at the end of the report.
In Los Angeles, food trucks are required by law to belong to a commissary, which is where
the food truck lives. Commissaries have hookups for water, propane, etc. and have electrical
inputs to keep the fridge running overnight to avoid spoilage. They also provide dump
stations and security from theft/damage.
Commissary costs run at $900 – $1,200 a month. Roaming Hunger provides the permit for
the vehicle and covers normal wear & tear repair costs. Tyler also stipulated that insurance
for a food truck (in case of accident) is covered by normal car insurance, so for overhead
costs, you would be looking at ~$3,000 lease payment and ~$1,000 of commissary fees, for a
total of around $4,000 a month.
In terms of startup costs, the deposit, which you receive back at the end of the lease, is two
months lease payment, so around $6,000. You must also wrap the vehicle, i.e. put your logo
on the side. Roaming Hunger can do this for you for $4,000 to $5,000, but I believe it would
be cheaper with a company that specializes in vehicle wrapping. Many companies do online
quotes for vehicle wraps; here is a link to Top Wraps, which gets excellent reviews on Yelp,
and can give a quote over the phone: http://www.yelp.com/biz/topwrapslosangeles2.The
startups costs total to about $10,000 $12,000 for leasing a food truck.
BUYING A FOOD TRUCK
There are two options for buying a food truck from the Roaming Hunger marketplace: buying
a used truck, or building a custom truck. Tyler recommends buying a used food truck as an
even better option than renting, if you have the credit to do so. This is because the mortgage
on the food truck is normally a little bit less than a lease payment, and you would be building
equity in the truck.
The truck prices vary widely based on the features and equipment, but we think the trucks
priced around $60,000 would be a good fit. The down payment for these trucks is 10% of the
price, so it would be the same startup cost as leasing, at about $6,000. The health permit also
comes with the truck once again.
In terms of building a custom truck, Roaming Hunger does fully renovate used trucks (with
about 4090K miles on them) for $55,000 $75,000. With this option, the truck would be
custombuilt for your needs. Roaming Hunger can also build the custom car new, which runs
from $80,000 to $150,000 depending on features.
In terms of overhead costs for buying the truck, commissary costs + mortgage payments
would be about the same as renting, around $4,000 a month. However, if you buy the truck,
you would be building equity towards owning the truck and possibly selling it or leasing it
out in the future. The startup costs are also the same, $10,000$12,000. This is of course
dependent on quality and features of the food truck.
Through Roaming Hunger’s website, you would be connected to people looking to cater their
events. This is a great opportunity for an extra revenue stream, as well as an opportunity to
build your personal brand as a boba maker and bartender.
In Los Angeles, you cannot sell alcohol on the street from a food truck. However, because
you have a brick & mortar store and an alcohol license, you can sell alcohol at private events.
So any catering opportunities (college parties, business events), you would be able to sell
EXAMPLE OF AN AVAILABLE FOOD TRUCK
Tyler provided the following description:
The Açai & Coffee Juice Truck was manufactured according to the customer’s needs for
delivering Açai bowl, fresh cold pressed juice and at the same time to have coffee available
inside the truck. As you can appreciate, the truck has all necessary equipment to make cold
pressed juices of many different types of fruits and vegetable, and healthy Açai bowls. It has
an espresso coffee machine as well.
Features and equipment:
• Easy to drive
• Easy to operate
• Built in durable materials
• 3 Compartment sinks
• Hand wash sink
• Top shelving
• Bottom storage
• Prep area
• Service window
• Propane generator
• Pressed Juice Machine
• Espresso Coffee Machine
• Coffee Grinder
• Drink Dispenser
• Under the counter refrigerator
• Large / Tall Refrigerator
• Cash Register
• Receipt Printer
• Square Stand
• TV Screen
This truck is in the $3,000/month range to lease, but you could talk to Tyler to inquire about
the specific price and mileage. This truck has similar features to the used trucks in the
$60,000 range on the marketplace