Running all concessions for local schools -- advice needed....

[MSPW11]

We’ve been approached by the Superintendant of our local schools to run all of the concession stands for all sports at the Middle & High Schools. They are supplying all of the equipment and buildings, we would handle everything else (labor, food, everything). He gave us the option to only do Football or we could do all sports. He is requesting a % of sales. We are in a pretty rural area, but our stands are usually full and the lines are generally long at the concessions. So this could be a good opportunity and a foot in the door to offering pizza for school lunch as well.

Anyone have an idea what would be a fair # for this? Should we ask to give a % of profit instead?

Any advice or suggestions we need to consider before making a decision on this is GREATLY appreciated.

 

[d9phoenix]

Either way you decide to go with, you will need to spell out exactly how the final number is determined. And show him the difference between the two.

If he wants a percentage of Sales(gross or net sales and do you have any royalty sales that must also be deducted first ?) then it should not be any higher then 1 or 2% imo.

If he wants a percentage of profits(again you will have to define exactly how you reach this) it could be higher. I would be willing to go as high as 10%, but no higher.

What i would do is make up a mock chart of what you think a typical night would be. Then do it for both terms. Then when you talk to him, you both could decide on which scenario is both for best of you.

Also one thing to remember in these types of situations, this is also a marketing event for you and your business. You can take a lower profit as long as you provide good quality service and food. Because your final goal should always be to get more people hooked on your food so they will call/come in and become regulars.

 

[d9phoenix]

Oh and one last thing, the devil is in the details. So always make sure to spell out all of your expenses before you reach the profit figure or sales figures good luck

 

[MSPW11]

My wife stated they are wanting 20% of gross sales, but said that we can discuss this with him. That seems like a high number, but in the little bit of research I’ve done online, 15 - 20% of gross looks like the going rate. Seems awful high to me. I will have to run some scenarios and see where the numbers are at. I have a meeting with him on Friday so that we can go over the details further.

D9, I like your thought about the marketing event. We’ll be selling our pizza at these events, so it is a good way to get our product in more mouths.

Any other advice I need to consider? Thanks again!

 

[royster13]

Is there enough business to make it worth your while?..And if you do it will it distract you from your real business enough to hurt it?..These opportunities often sound good but take a lot of time and energy to make them success…

As far as putting your pizza in new mouths…Great if the product they get is close to what you serve at your place…But sometimes it does not come out the same and it can do some damage…

 

[rgjujitsu]

20% of gross? That’s nuts, how will you make any money?

 

[Daddio]

20% of gross? That’s nuts, how will you make any money?

Any time I have done offsite sales I sold at a higher price than in store to cover the extra expense. For example if I sell a slice in the store for $2 the price for that same slice offsite will be $3.

 

[Registered_Guest]

Any other advice I need to consider? Thanks again!

Yes.

Run. Is there anyone behind you offering the school 25%? 30%? Probably not. Because no one wants to do it at any percentage (probably).

The more of my pizza in mouths / marketing angle on these is a trick your mind is playing on you. No matter how much money you “make” it won’t be worth it. Not even close.