Dollars to Donuts: That's a Good Idea

On Oct. 1, the $450 million CBC Federal Credit Union unveiled a newly-remodeled branch in Camarillo, Calif. Inside the new branch is an updated lobby, a new Dunkin' Donuts franchise, a community meeting room and paintings hung throughout the branch showcasing local artists.

Don't worry, I am not going to just glaze over the Dunkin' Donuts portion of the branch redesign news.

According to a news report I read by reporter Lisa McKinnon and the accompanying video of the story on the Ventura County Star's website, Aharon Aminpour, who is the CEO of Madison Foods and operates about a dozen Dunkin' locations, said, "This store is a first of its kind. It's a bank and a Dunkin' all under one roof."

Sure, I cringed at the term "bank."

The 4,700-square-foot space was due for a redesign as it has been around as a CBC FCU branch for 25 years. There's a shared space for seating and even an outdoor patio for both organizations and members/consumers to use.

Since the hours are significantly different at a donut/coffee shop and a credit union, the credit union is able to slide over a beautifully branded partition for those hours when the credit union is closed and the Dunkin' customers can sit, eat a cruller and drink their coffee.

When the credit union is open, those partitions open to that shared seating area and credit union lobby, and Dunkin' customers can eat a cruller and drink their coffee while pondering, "Do I hate my bank enough to take my donut and coffee over there and open an account?"

I was digging into some of the expectations of the donut industry to see just how viable and lucrative this move of an in-branch Dunkin' could be for the credit union. Turns out there is a "Global Doughnuts Market" revised report that came out in September. According to the teaser line, the "doughnuts market is set for phenomenal growth in key regions by 2029." The thing is, it costs more than $3,000 to get a copy of that report, so I'm going to pass on that purchase.

I do want to point out that I am not exactly clear on the financial details of the credit union/Dunkin' deal. Is this a Best Buy selling off portions of its locations to Microsoft type of deal or is it something different?

What I've been most interested in and thinking about for a while is this concept of shared and/or dual-branded spaces for credit unions and whatever other organizations to cohabitate. And my interest comes from not only the fact that the cohabitation makes branding sense for both parties, but that it also reduces the overhead costs for each party. You know how expensive it is to pay for the cost of the physical branch each month, as well as property taxes.

The first time I can recall seeing a co-branded space that seemed like the greatest idea in the world was 27 years ago. I walked into an all-in-one Taco Bell/Pizza Hut/KFC that was built near my apartment.

Cheap food? Check. Open until 1 a.m.? Check. At the time, I had a pretty simple set of requirements and most of those requirements revolved around how many tacos I could get for $1.

We've reported on some of these cohabitation spaces in the past year. For instance, Nutmeg State Financial Credit Union in Rocky Hill, Conn., opened a dual-service branch with the State's Department of Motor Vehicles. Renew your driver's license, open a checking account. Renew your driver's license, make a deposit. Renew your driver's license, apply for a loan.

According to our reporting earlier this year, Nutmeg State Financial had $600,000 in loans approved in this 800-square-foot branch during the first three weeks of opening.

Everything has gone so smoothly there that in fact, the credit union and DMV are planning to open a second dual-service location that'll be more than triple the size of the original location.

The idea isn't that new, really. There have been credit union and bank branches inside of grocery stores for years. The grocery store gets some help covering its monthly property costs and now it can provide an extra service to shoppers. What is relatively new is this reverse idea of the credit union branch giving up real estate to a second organization.

And I'm all for it.

In case you're wondering how Best Buy's "store within a store" venture has worked out, after trimming the number of Best Buy Mobile stores and some other pruning, the company and analysts are seeing some impressive results for careful future growth. In fact, according to a new financial analysis released this month, Best Buy's stock is up 114% over the past five years.

It's going to take some imaginative thinking by credit union executives to continue making their growth metric numbers each year. And, if it makes sense, I'd love to see what unique partnerships credit union executives can come up with to create new shared spaces to benefit members, a second business and the community.

Some of my branch partnership ideas?

• Credit union and Bath & Body Works: Just don't use the tester lotion before using the ATM.
• Credit union and Cheesecake Factory: Our rates are lower than your cholesterol.
• Credit union and music venue/club: Late-night credit union with a full bar and open mic.
• Credit union and florist: You can smell how good our rates are.
• Credit union and REI: Two cooperatives are better together.

OK, so I actually really like the music venue and REI ideas. You get the gist; this is about opening our creative minds to make a better credit union and branch experience for a much wider audience.

I find myself needing to physically go to my credit union branch a lot this past year and if I had a plain cake donut with me, I'd enjoy it even more.

Michael Ogden

Michael Ogden is editor-in-chief for CU Times. He can be reached at mogden@cutimes.com.