Markup % For School Contracts

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indie_pizza

New member
I was wondering if anyone here did contracts with schools for students to buy pizza slices during lunch periods. I was asked to bid last year, but decided I wasn’t confident enough to try and take on orders like that yet.

I’m going to take a crack at it this year, but I’m not sure what kind of markup to bid at. I’m sure all the other places that are in the rotation have pretty low pricing, but they’re all corporate chains that can make pies for a lot less than I can.
 
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You can make a cost effective pie if you choose to…you just won’t make the margin…

What are your costs for a 16" cheese? $2.50 w/a box?

If ya sell it @ $6.00, you’ll gross $3.50…will you do 100+ pies…will that extra $$$ drop into your pocket w/little labor?

We used to do schools years ago…a hassle, but overall worth it…
 
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Do they release bids from previous years?..If they do, sometimes it will show bids getting lower and lower each year from folks that are just interested in “cash flow” versus “profit”…
 
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PP: That’s where I’m a little lost on what’s realistic, your numbers are about the same as mine, but I don’t know if that $6 is anywhere close to a winning bid. If I could do it for $6, surely the chains are well under that since they’ll just use cheaper goods and cheap labor.

Royster: That’s a good question, I’ll have to check into that.
 
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For a 14" pizza cut into 8 slices, all bids here last year were right at $5.00. The Food Service director went with the national chain all things being equal. I could have and should have gone lower… still kicking myself about that one, especially since she decided not to bid the contract out again this upcoming year.

You’ve got to believe that going with the name brand is the “safe” option - things go bad with that big, national company and everybody is surprised. Choose the “little guy” and they don’t quite live up to the contract… “well, what did you expect?”

I’ve seen regional chains bid at what I have to believe is close to their actual cost in the past and the national chains don’t mind scraping the bottom of the pricing barrel. Having a lunch contract with the school corporation puts their product into the mouths of (a member of) every family in the district AND (more importantly) keeps your product out!

When you consider the sampling & name recognition opportunity for your company, maybe leaving some margin on the table can be justified as a cost of marketing.
 
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indie pizza:
If I could do it for $6, surely the chains are well under that since they’ll just use cheaper goods and cheap labor.
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Indie
Yes, their labor is cheap, but their food is not necessarily as inexpensive to them as you believe. If you make your own dough, your food cost on a 14" one topping is likely similar to or less than theirs unless you buy Grande cheese. The chains make good money from selling items to their franchisees via their commissaries. If you buy well, you very well may buy your ingredients for similar prices as they buy their items for.
 
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Wow you are all bidding quite cheap compared to me. My school contract for the public school is $9.00 for a 14" cheese or one topping cut into 8 slices. We also do swim teams at $10.00 and a private school for $11.00 per pizza. We are a regional franchisee and we only have one competitor in our town though-also a regional franchisee.
 
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last year we landed the football team and cheerleading teams pizza parties after practise each week. The price was so low and the demand of these upper class parents were unrealistic that I wish we haddent. It took away from our main customer base quality of visit. I have stone ovens so im not set up for mass cheap pizza.
 
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I have been doing school slices for about 3 years. The lady that has the contract for the canteens in 8 schools in the area comes to me for their pizzas. What I have done is adjusted my price so the food cost is about 5% higher than I would regularly sell for. This means the selling price to her is $2 - $4 less than someone off the street for a whole pie. Her selling price at the school for a slice is about 50 cents more than what I sell slices for in the store.
 
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Couple things to add as I’m in indie’s town. This school in the past has wanted larges (14") cut into 6 slices, not 8. They resold them for a certain amount per slice to students, and made a nice little profit off of it. I’m out of the loop these days, so i do not know if things have changed recently. Also, this school is one of the most difficult customers to work with. If you mess up and cut a pizza into 8 slices instead of 6, they sell it to the students for half price, then deduct what they lost in profit off of what they are going to pay you for the pizza.

Indie; check your PM, i sent you a lengthy post in there a couple days ago.
 
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Where does one start when wanting to investigate doing school contracts?
It would have to be in place before the school starts so now is the time.
Since no one is there how do you contact them?
 
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Check with the district office. The offices should be open year round. As far as private schools they also should have someone in the offices over the summer.
 
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