Getting School District Contracts/School Lunch

Can anyone offer any advice/hints on how to get this type of business? I would like to take a stab at it but I don’t know where to start. Thanks!

Here is what I do.
I have a package that I have prepared for each school with my prices, and the different services that I can offer them. I deliver that with a pizza and a letter to the principal at the begining of the year. In it I include some fund-raising options and also a reading rewards program. I also offer to bring some pizza to their parent advisory council meeting. Works every time and I have all schools on a hot lunch program.

Pizzaguy has a great idea there and I think you would do great with it. I would also check with the School Districts about the health code guidelines that you will have to follow to prepare, package, deilver, and serve to their kids. The other thing is of course the nutritional guidelines, I don’t know about where you are at but around here the schools are really going crazy about this right now. Lots of money to be made though and I wish you the best of luck!

David McGuire

If I could get just one or 2 schools, I would give it a go. But my school system requires that we service all the schools in the district. We now have 14 Elementary schools, 3 high schools and 3 middle schools. It just isn’t feasible out of one store, with my current oven capacity. Not to mention travel time from one side of the county to the other!

Dominos and PJs are currently the only ones bidding on it, and they do it out of 3 stores.

I am so lucky we dont have to deal with any health code issues here. As long as we have a health permit that is all they ask fo. YA Alberta rocks!! LOL

What kind of prices are you guys quoting? What kind of food cost are you running on those prices? What kind of sales do you expect to bring in on those prices? -J_r0kk

I charge 11.50 per pizza (14" cut into 8) Most orders are for 60 to 80 pizzas. I do 2 schools a month sometimes 3.

We used to do pizzas for 5 high schools and 4 middle schools. 16" cut into 10 slices with 16 oz cheese for cheese only or 13 oz cheese/3 oz pepperoni, 24 oz dough to meet the National School Lunch Program minimum requirements.
We sold this to the district for $5.50 each. Brought in 3-4000.00/week.
Biggest issue was payment, we got them to pay within 10 days from invoice. This was every 30 days so you have to be able to carry paper for @ 4-6 weeks.

Sorry meant 8 slices per pizza.

Big Bob, I’m coming up with about $2.92 in food cost for an extra large pepperoni:

$.42 - 3 oz. pepperoni
$.43 - box
$.37 - 24 oz dough
$.16 - sauce
$1.54 - cheese

$2.92 divided by $5.50 is showing me a 53.09% food cost. Does that sound accurate to you? If so, is it just a sheer cash flow proposition for you or are you really making money on this. I’m being very sincere because I really want to know if there’s a way you can make money off the school lunch programs.

I am aware that labor costs will drop into the basement (probably in the 8-10% range) as you mass produce these pies. I’m just concerned that if I do this, how will a 10-12% drop in labor costs compensate for the 25% increase in food costs? -J_r0kk

Although your food projections are higher than mine, even using these it still makes sense to me. At 65% food and labor, this still leaves $1050 to $1400/ week left over to pay the added utilities and such. Over the 35 weeks of school it seems like Bob is making quite a bit from these orders.

Thanks Paul. One more question… Do you find that doing the school lunch helps your night sales, slows your night sales, or has no effect on night sales?

I’m asking because hurting, rather than helping my business is a big fear I’ve got. I don’t want the kids to burn out on the lunch pies and cause a chain reaction when the parents are deciding what to order for dinner. -J_r0kk

For me it makes no difference. Regular sales are normal.

Food costs were @50%. This really helps cover your operating overhead. Most of the work takes place prior to normal hours and prep for the next day keeps your staff occupied during slower hours.
Lets say your fixed costs are 10,000.00 monthly.
If you could get $3000.00 weekly from schools your gross pofit is 1500.00/wk. or roughly 6000.00/month.
This lowers the overhead on normal business to 4000.00/month.

what do you charge in the long run for a pie to the schools in that kind of quantity? and what is the profit margin on it…