Chillbox Works Local Foodservice Operators Into Its Growth Strategy

Chillbox, owned by New Haven, Michigan-based Bazco Oil, operates 33 convenience stores. The first store opened in 1989, it fourth store in 2006, the Chillbox c-store brand in 2015 and its 33rd store this year. It aims for 50 stores by 2025.

“We wanted to bring all these sites together,” said Fady Bazzi, operations manager, who owns the company with his brother, Aly. “We wanted to build some type of consistency and a following. To do that, you got to brand and push a similar brand across all sites.”

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The company has a 20-year relationship with Subway, but in recent years wanted to branch out.

“We didn’t see that to be the most appealing format,” Fady Bazzi said. “We knew QSR [quick-service restaurant] with hot foods and grab-and-go sandwiches is the way to go.”

The brothers consequently have implemented the Chillbox Grab and Go concept that includes hot foods like pizzas, Bosco sticks, sandwiches, cookies, cheese breads, pretzels, roller grill hot dogs and taquitos, wings and more.

They also offer fresh sandwiches, salads and subs, delivered daily, via a partnership with Fruit Ridge Farms, Grand Rapids, Michigan, which works with wholesaler S. Abraham and Sons, also based in Grand Rapids. The fresh salads are prepared with locally grown lettuce from Revolution Farms, Caledonia, Michigan. The Gourmet Signature Selects subs include Chicken Parmesan, Spicy Italian Hero, Classic Turkey, Tuna Salad, and more.

In addition to welcoming outside food vendors, Chillbox also offers its own robust brand that it prepares on site, again working with wholesaler S. Abraham and Sons, but using its own imaging. “They supply us all the ingredients, all the formulas, and then we run them through our oven,” Bazzi said. “We bake everything fresh.”

Hot sandwiches are primarily thaw and serve, kept at food warming stations.

With sandwiches, Chillbox works with its wholesaler for a thaw-and-serve program. “Our goal is to keep it simple,” Bazzi said. “The simpler it is, the more likely you will succeed because foodservice is all about consistency from one site to the other.

“I see the same thing with coffee,” he added about their coffee bar that features Beantown Coffee. “You might hate our coffee. As long as you hate it at every site, we are consistent. But you’re going to have a following of coffee guys that love your coffee. And when they go from site to site, as long as you can serve the same type of coffee flavor ... consistency is key. That’s the whole franchising formula. The No. 1 rule is to be able to be consistent across the entire chain.”

Chillbox is about to open its first location that includes a restaurant, Burger1, that currently is in just one location, in Ann Arbor, Michigan.

In this partnership with the restaurant, owned by Moe Chami, Burger1 will open soon in a Chillbox in Warren, Michigan—followed by openings in other Chillbox locations.

“Burgers are simple,” Bazzi said. “They’re quick, they’re relatively inexpensive.” And Burger1, he added, is creating a substantial following. “They’re locally owned, and they do so well.”

Chami, who owns other restaurants in the Detroit area, said all his burgers are fresh, never frozen, and made to order. He said the 800-square-foot-location in the Chillbox will have the same menu as his Ann Abor location.

He will also offer chicken breast sandwiches, wraps and tenders. “All fresh, never frozen,” he said. The location also will introduce a new breakfast menu items for Chillbox customers.

As to opening in a c-store and not having a traditional restaurant’s seating area, Chami said, “As long as you have the right staff and mentality, there’s no difference. The only difference is there won’t be a dining room.”

As Chillbox has been growing, they’ve aimed to feature local food operators in stores.

“For example, in Dearborn we have a Mexican food truck, something that caters to the a diverse demographic,” said Nasir Siddiqui, director of fuel sales. “It’s permanently set up on our property. As we’ve grown, we’re giving other people an opportunity to grow as well. Cantrina Mia serves up high-quality tacos, burritos, quesadillas, tortas and nachos.

“From our perspective, we’re a local gas station chain that gives back and gives food opportunities for local entrepreneurs. We’ve been the beneficiary of growing our company, and we’re giving back to the community to give them a chance to succeed with us as well as we’re continuing to grow our footprint.”

Chillbox also has a partnership with Madison Heights, Michigan-based Quick Foods, “another local guy who is probably the largest sandwich maker in southeast Michigan,” Bazzi said. “He has 30 trucks that drive around every day making fresh sandwiches and bringing them to our stores, where we put them on the shelves.”

About five years ago, Chillbox started its rewards program. “We’re closing in on 40,000 registered members, and we average around 1,200 rewards members per store,” Bazzi said. “It’s been one of our most successful programs to date. We are trying to build off that and expand our footprint, and since 2018 we’ve added 20 stores. We’re growing fast.”

The most aggressive Chillbox promotion is the 5-cents-per-gallon rollback up to 20 gallons per day, Bazzi said.

“That’s the most attractive part of our rewards program,” he said. “This is how we win everybody over to sign up. No strings attached. You sign up, you get a 5-cent rollback on every time you visit us to buy fuel.”

There also is a full menu of promotions through the rewards app. “We partner with Pepsi, Coke, Monster, G Fuel, where we’ll set up fantastic promotions, plus giveaways where G Fuel will bring us a whole host of cool products, like a gaming chair, a cooler,” he said

With the loyalty program, Chillbox has been aggressive, Bazzi said, including 15 cents off a gallon when you buy a couple of Coke products, or a three-for-six promotion for Monster. “You really get your drinks almost half price if you are a rewards member,” he said.

“Manufacturers are really stepping up with us,” he added. “They see the growth, they see it in our numbers and traffic. We have all kinds of companies knocking on our doors now. Even the little mom-and-pops are trying to offer up stuff for us now.”

One example of this is a beverage distributor Garden Foods, Dearborn, Michigan. “They want to partner, get in on the front page of our app. They want to offer us a promotion. We just have to work out the details.”

Siddiqui said Bazzi and his team have built a solid Chillbox following, helped by donating to local high schools and hiring locals.

“To win over your clientele, you have to offer them something that nobody else does, and that’s why we went with the aggressive 5-cent rollback” Bazzi said. “We surveyed the market, we saw what Speedway and Circle K do. On and off, they'll turn on a 3-cent promotion, then they’ll turn it off. They’ll turn on something else, they’ll turn it off. What we did is commit to this. Let’s put 5 cents on the table and let’s keep it there. That’s been the No. 1 tool that we had to win over.

“About 30%, 35% of our everyday transactions are tied to that 5-cent rollback,” he said. “If we were to pull that, that could upset some customers.”