Tosci’s Could Close Student Center Shop
High Rental Charges, Location Are Factors
Toscanini’s may leave its Student Center location after receiving an eviction notice from MIT Real Estate. The ice cream shop is about three months or $13,000 behind on its rental payments.
Tosci’s owner Gus Rancatore said that he would not contest the notice because his business cannot afford its rent. Under the current rental arrangement, Tosci’s pays MIT 13 percent of its gross sales, or about $4,500 a month. Rancatore said that 8 percent is the industry standard.
“We cannot continue to pay rent at this rate,” he added. “We would like a different arrangement.”
While Tosci’s MIT shop generates about as much revenue as its shops in Harvard Square and Central Square, it has traditionally lagged behind the other locations in profitability because of the higher rental costs.
Rancatore said that the cost, combined with weak summer sales because of moderate summer weather, made him reconsider the viability of keeping the MIT shop open. A hearing on the dispute is planned for Nov. 9 in a Cambridge district court.
Competition, location hurt business
In an interview with The Tech, Rancatore said that Tosci’s location in the Student Center hurts business during IAP and the summer session. “Monday to Friday, when school in session, the store does pretty well,” he said. “But it’s not busy during non-academic time. It ends up being a store where we don’t sell enough ice cream.” He added that the shop’s distance from Boston discourages business from MIT’s Boston FSILG members and residents.
Rancatore also said that competition against other MIT food outlets hurts the shop’s profitability. While other MIT shops have non-competition agreements, he said, Tosci’s has none to protect its offerings of ice cream and coffee. “Aramark has a monopoly,” he said. “Every three years, we wait for it to be revised.”
He added that the Dome Cafe in particular came into direct competition with Tosci’s coffee sales, hurting business. After the Dome Cafe opened, customers “didn’t need to cross the street to get cappuccino,” he said.
In discussing future plans, Rancatore suggested that MIT run the Tosci’s seating area while Tosci’s operates an ice cream counter. The suggested setup would be similar to the current format for the Dome Cafe.
He added that Tosci’s will also explore other sales options besides opening another store. The chain currently sells through Kozmo.com and through direct sales, which could be an option for ice-cream deprived students.
Campus Activities Complex Director Phillip J. Walsh said that the issue of non-payment was a serious matter. “If the action being done is because of a nonpayment of rent, then that’s a legitimate issue,” he said. “One obligation [of renting space] is paying your rent .... We can’t just look the other way.”
In addressing Rancatore’s views on competition, Walsh said MIT was doing its part to increase competition on campus. “We’ve been working hard to eliminate some of those things,” he said. “In business, it’s always about competition. Consumers benefit from that.”
Rancatore has received accommodations in the past, Walsh added.
Jennifer Krishnan contributed to the reporting of this story.