FAQs

The goal of a food service RFP process is not to necessarily change providers; it’s about practicing due diligence. Increased competition from not only the ‘Big 3’ but numerous regional dining providers means that proposers increasingly must put their best foot forward. You can garner investment offers, favorable contractual terms, and other financial incentives (even from your incumbent provider) that you might not have otherwise. If you are interested in changing providers, however, a food service RFP will help determine the dining provider best aligned with your institution. You do not need to go into a food service RFP process knowing in advance whether you intend on changing dining providers. The process is meant to be flexible. Some institutions who initially want to change their dining providers ultimately choose not to, and vice versa.

JGL is a strong advocate of student involvement in our food service processes. If the objectives of the food service RFP, responsibilities, and the amount of trust being placed in them are explained from the outset, students can bring a perspective that simply can’t be found with faculty or administrators. We typically ask 1-2 students to participate in all food service RFP discussions & milestones, including discussions surrounding financials.

There is no correct answer, nor do we have a favorite. A P&L agreement is one where an operator bears the financial risk. They collect all revenues and expenses and often pay a percentage commission back to the college or university. While this structure minimizes risk to the institution, it also reduces your control over the dining program. If changes are requested such as extended hours or reduced pricing, this will cut into the operator’s budget, and they may not be willing to make the change. Conversely, a management fee agreement is one where the institution bears the financial risk. The operator is entrusted to manage all revenues and expenses on the college’s behalf, and most surplus or deficit is borne by the institution. The operator profits from a management fee, usually expressed as a fixed fee, percentage of revenues or percentage of cost. While there is more financial risk involved for the college, it also means you have complete control over your program. If you are willing to fund it, your operator can make it happen. Ultimately, this decision comes down to each institution’s risk tolerance.

Including neighborhood restaurants can be a great way to support the local community and expand offerings and operating hours but needs to be considered with the budget in mind. Your institution must first determine the amount of dining dollars it is amenable to offering; these funds will no longer be captured by your in-house dining program. This must be balanced with the selected restaurants’ willingness to pay upfront costs for student card readers and other IT integration features. Regardless, the first step any institution must take is to discuss it with your dining provider. Depending on who bears the financial risk of the program, that conversation can then evolve into determining the level of dining dollars offered and engaging in initial discussions with local restaurants to gauge their interest.

Yes, we have seen local restaurants included as part of a dining provider’s overall program. For student dining, this can take the shape of product features, periodic pop-ups, multi-day station takeovers, or even semi-permanent residence within a retail location. On the catering side, we’ve also seen the inclusion of local restaurants on the operator’s very own catering guide. This can be an alternative solution to allowing use of meal plans off campus; however, there are financial impacts that must be considered with this approach as well.

We believe that some kind of visitor food option can be developed for most institutions. Visitor food can enhance the visitor experience, deepen ties to the organization, increase the length of stay, and may stimulate gift shop sales. Smaller institutions can consider a simple kiosk or mobile cart that is weekend or seasonally programmed.

A large number of museum café operations are supplied from outside kitchens (called commissaries). This allows the museum to preserve valuable space for museum collections and generally negates the need for a hood and fire suppression system in the smaller onsite support kitchen.

The best location is one the visitor sees upon entry to the museum, ideally near the gift shop, although this is not possible in many facilities. If the café is not highly visible, be sure to have good directional signage and feature it prominently on the website, all maps, and collateral material.

Catering operations are much more profitable than café operations. Options might include considering a short, preferred caterer list, considering an exclusive caterer, bundling the liquor rights with the catering operation, or guaranteeing a certain volume of internal catering. The more catering opportunities an operator can capture, the more likely they are to support an amenity project on behalf of the institution.

The number of financially successful true “destination restaurants” within a museum environment are few and far between. Many more fail than succeed. A destination restaurant requires a separate outside entrance, heavy street traffic, and full control over hours, menu, and price points. It also helps to be in an area where there are other successful restaurants. Tread carefully because the failure of a destination restaurant within the museum will be considered a failure of the museum.

Maybe. It depends upon the sales potential, the term of the contract, and the amount of the investment. Generally, an investment is only possible in an exclusive relationship.

It depends upon whether there is an investment requirement, the start-up cost, and the volume of sales activity. A contract with no investment might be as short as 3 years. The average in our practice is 5-7 years. A contract with significant investment might be 10 years plus. Regardless of the length of the contract, it is critical the museum have the right to terminate without cause at any time.

It depends upon the norms in your market and the goals of the food service program. We do not generally advise developing an exclusive relationship if the rest of the market has a long-preferred list because that will create a negative differentiation. Below is a chart that highlights the commonly accepted advantages and disadvantages of each:

 

Category	Preferred List	Exclusive
Client Choice	High	Low
Varied Price Points	Likely	Less Likely
Café Development	Unlikely	Likely
Commission Return	Lower	Higher
Investment Potential	Little or None	Higher
Facility Caretaking	Depends upon caterer	Better
Marketing Assistance	Will feature on website	Will commit $
Sales Assistance	Unlikely	Likely
Preferred Internal Pricing	Limited	Definitely

 

 

The easy answer could be that the current food service operator is not managing the account properly. But, in fact, there are many factors that can potentially affect the annual subsidy amount. The first course of action should be to have an assessment done of your operation. Catering expectations, site population, participation, inflation, frequency of price increases, operating hours, staffing levels and menu variety all play a part in the financial health of the operation. It is important to take a comprehensive approach to understand the status of the account and to assess the goals that you, as a company, have for your corporate dining program. It is also important to make sure your contract terms are consistent with industry norms as there can be many hidden fees in contract dining. Understanding the big picture is important so that achievable expectations for the future can be set.

The decision to go out to bid can be a difficult one, especially when there is a longstanding positive relationship in place with a current operator. However, we always explain to our corporate dining clients that going through a food service RFP process is not only a learning moment for the client, but also an exercise in due diligence. With contracts that are 10 or more years old, there is a good chance that industry norms and terms have changed. It is important to take the opportunity to review your program, view it with fresh eyes, and be sure your company’s corporate dining program is operating as well as it should be. If there is absolutely no desire to go through a bid process, we would strongly recommend an assessment process to ensure the program and contract terms are considered competitive from an industry perspective.

We applaud you for the ultimate foresight…and insight! Your operator could, indeed, be doing a great job. But if they are in the same environment day after day, with the same regional manager visiting each quarter, the creative impulse may be stagnating more than anyone realizes. Sometimes a fresh set of eyes is what’s needed: not to criticize the current operator, but to work in partnership with them to develop new ideas and approaches to refresh the program.

This has become a hot topic for corporate dining and food service operations in the post-pandemic world. There are a variety of solutions that operators have come up with to mitigate loss and manage subsidies because of variable populations. For example, utilizing innovative technology has been a popular solution that seems to be gaining traction. Grab and Go models with self-checkout such as Amazon Go are being used more frequently to reduce labor costs on slow days. Heat mapping, waste tracking and pre-ordering are other tools that we have seen implemented to improve efficiency during quieter times. Consistent evaluation of sales and menu engineering also need to be done to ensure product is ordered based on population level. Operators and their clients need to be in constant communication about policy changes and organizational expectations regarding on-site population.

Tell the story! All food service operators are making great strides in working towards a more sustainable future. Most companies we have worked with have waste tracking systems, strive to procure local goods as much as possible and are excited to share their sustainable efforts with clients. It is important to make sure you are supporting your operator’s efforts by working collaboratively. Some of the ways in which we have seen this done is by giving the operator outdoor space to grow a garden, providing roof top space for bee hives, or promoting food drives on digital signage throughout the campus. It is important to make sure there are regular meetings with the operators’ marketing team to build a collaborative relationship that speaks to your organization’s priorities.

It is important to collaborate with operators to develop KPI’s that are fair, measurable, objective and achievable. One thing to keep in mind as you develop KPI’s is that it’s okay for them to change over the course of the life of the contract; as a matter of fact, it is encouraged! KPI’s need to evolve with the business. Here are three tips to keep in mind about KPI development:

• The risk and the reward must be meaningful for KPI’s to work! We always recommend 50% risk and 50% reward whenever possible.
• KPIs should be clearly defined and easy to understand. Avoid vague language or metrics that can be interpreted in multiple ways. KPI’s should be quantifiable, and the metrics should be numerical so progress can be tracked objectively.
• It is important to set goals by establishing achievable targets that challenge the operator without being unrealistic.

Strong KPI’s can be a contract’s superpower. Measuring the successes and challenges of an operation is difficult if expectations are not clearly defined. Creating a system of accountability from the start of a contract term sets the tone for a positive relationship that is beneficial to both parties.

Percentages paid are dependent on sales volume and capital investment proposed. The higher the revenues the higher the percentages. For sales levels of around $2M, commissions tend to be in the mid-twenties range.

It depends on whether there is an investment requirement, the start-up cost, and the volume of sales activity. A contract with no investment might be as short as 3 years. The average in our practice is 5-10 years. A contract with significant investment might be 10 years plus. Regardless of the length of the contract, it is critical that the institution has the right to terminate without cause at any time.

The best location is one the visitor sees upon entry to the venue and/or exit out of the venue, The shop should also be accessible to the visitor without buying a ticket to the institution. Some shops generate significant volume from visitors just wanting to shop, especially around holiday time. Additionally, if the shop can have outside access, it can be open even when the institution is closed. This is not possible in many facilities. If the shop is not highly visible, be sure to have good directional signage within the building or on the grounds and feature it prominently on the website, all maps, and collateral material.

We believe that some kind of retail merchandise option can be developed for most institutions. Having a shop can enhance the visitor experience, deepen ties to the institution, increase the length of stay, and may stimulate cafe sales. Smaller institutions can consider a simple kiosk or mobile cart that is weekend or seasonally programmed.

You should think about transitioning employees to the contractor. You should also include the contractor buying your saleable inventory as well as merchandise that is on order. You should think about having approval rights of merchandise being carried in the shop since it represents your brand. Lastly, you should have approval rights of the manager that the contractor will want to place since they will be representing the institution.