Loading...
HomeMy WebLinkAbout2003 07 14 Consent L Profitable Food Facilities " COMMISSION AGENDA ITEM L CONSENT X INFORMATIONAL PUBLIC HEARING REGULAR . 07/14/03 . Meeting MOR. f--: /DEPT c,ey Authorization REQUEST: The Parks and Recreation Department is requesting the City Commission to reject Bid no. RFP-013-03CP by Fred's Franks for Concession Services and direct staff to continue City Operation of the Concession implementing the consultant "Profitable Food Facilities" recommendations. PURPOSE: The purpose of this item is to reject the bid by Fred's Franks & Continue City Operation of the Concession implementing the consultants recommended changes. CONSIDERATION: · On May 15, 2003 only 1 RFP for concession services was received. Fred's Franks 5% of gross sales. · On June 30, 2003, Budget Workshop the City Commission received a presentation and report regarding the city concession operations by Profitable Food Facilities. · Staff has notified Pepsi of the change to syrup instead of bottled beverages and Pepsi will install and service the dispensers. · Staff has transferred the Concession Manager and is seekingla new Concession Manager who will put in place the consultant's recommendations to operate the concession as a business and attain profitability. FUNDING: None Required. " RECOMMENDATION: Staff is recommending that the City Commission reject the bid by Fred's Franks and direct staff to continue operation of the Concession implementing "Profitable Food Facilities" recommendations. IMPLEMENTATION SCHEDULE: August, 2003 . September 2003 Hire new Concession Manager and establish systems & procedures Youth League Play Begins. ATTACHMENTS: #1. Fred's Frank Bid No. RFP -013-03CP #2 Profitable Food Facilities Report. COMMISSION ACTION: ~. 2 ATTACHMENT # 1 PROPOSAL CONCESSIONS OPERATIONS FOR.." CENTRAL WINDS PARK (BID NO: RFP-013-03CP) , to. PREPARED FOR: CITY OF WINTER SPRINGS PREPARED BY: FRED'S FRANKS PROPOSAL DUE DATE: ~. May 15, 2003 3:00PM RFP-013-03CP FOOD CONCESSION AT CENTRAL WINDS PARK TABLE OF CONTENTS SECTION NAMES . REQUIRED SUBMITTALS lA GENERAL INFORMATION 2B DISPUTES DISCLOSURES & LICENSE SANCfIONS FORM 3C PROPOSED MENU, ITEM SALE PRICE 4D PRICE PROPOSAL FORM 5E ADDmONAL DATA 6F I.' RFP-013-03CP Concession Operations For Central Winds Park 1. REOUIRED SUBMITTALS A. Letter of Transmittal May 15, 2003 RFP Review Board City of Winter Springs Fred's Franks is a family owned and operated business providing exclusive concession services. Our experience in the concession business has proven to be benefi~ial in several respects. 1. We are able to identify the appropriate selection of products to maximize revenues and increase customer satisfaction. . 2. Inventory is maintained at a level sufficient to provide product to all patrons without excessive ending inventory. This allows us to maintain the high quality and fresh products our customers have come to expect. 3. Operations are run efficiently and additional support added as nec.essary to handle peak loads often experienced at the competition of individual sporting events. Fred's Franks understands the scope, nature and concession operations which are outlined and required in the RFP and will fulfillment them should we be awarded this contract Fred's Franks authorizes the following person to make representations and presentations on behalf of the company: Mr. Fred J. Ma.nnara and Mrs. Marsha Mannara, Owners; 1118 Seafarer Lane; Winter Springs, FL 32708-6200; PH: 407/699-5359/ Fax: 407/696-5503 ~. .m~ Fred J. ara, Owner Ii RFP 013-03-CP Concession Operations For Central Winds Park 1. TYPE OF BUSINESS . Fred's Franks is a sole proprietorship business located at the above address.in Florida 2. FEIN Fred's Franks federal identification number is: 58-51598R-4 3. PRINCIPALS Mr. Fred J. Mannara is the only person designated as a principal of Fred's Franks. Mr. Mannara has granted authority to Mrs. Marsha Mannara to oversee operations in his absence. 4. CORPORATE INFORMATION Fred's Franks is not incorporated. 5. STATEMENT OF INSURANCE COMPLIANCE See statement of Insurance Compliance Form 6. ADDITIONAL DATA , ~. c DISPUTES DISCLOSURE & LICENSE SANCTIONS FORM Answer the following questions by placing an X after YES or NO. H you answer YES, please explain in the space provided or via attachment. Has your fHm, or any of its officers, received a reprimand of any nature or been suspended by the Department of Professional Regulation or any other regulatory agency or professional association within the last five years? YES NolL Has your fInD, or any member of your finn, been declared in default, terminated or removed from a contract or job related to the services your firm provides in the regular course of business within the last five (5) years? YES NO L . Has your firm had fIled against it or fIled any requests for equitable adjustments, contract c1aiins or litigation on the past five (5) years that is related to the services your firm provides in the regular course of business? YES NO X- H yes, state the nature of the request for equitable adjustment, contract claim or litigation, a brief description of the case, the outcome or status of suit and the monetary amounts or extended contract time involved. License sanctions: List any regulatory on license. Agency Sanctions t'\ E> t-t t I hereby certify t.hat aU statements made are true and agree and understand that any misstatement or misrepresentation or falsification of facts shall be cause for forfeiture of rights for further consideration of this project: PROJlECf: CITY OF WINTER SPRINGS CONCESSION OEPRA nONS FOR CENTRAL WINDS PARK (RcDS rR/Jtlf-S FmM~ JAui .m~ AUTBO SIGNATURE ffED -:r f!JJJ-N H A R. ft PRINTED OR TYPED NAME .5 -/~-- 03 DATE OFFICER TITLE 8 PROPOSED MENU ITEM CITY 5% SELLING PRICE STATE TAX APPROVED PRICE LIST Hotdog $ 1.75 $ 0.09 $ 1.84 $ 0.14 $ 2.00 Italian Sausage $ 3.32 $ 0.18 $ 3.50 $ 0.25 $ 3.75 Kielbasa $ 3.32 $ 0.18 $ 3.50 $ 0.25 $ 3.75 NY Potato Knish $ 2.44 $ 0.13 $ 2.57 $ 0.18 $ 2.75 Assocrted Candles $ 0.88 $ 0.05 $ 0.93 $ 0.07 $ 1.00 Nacho Cheese & Chips $ 2.22 $ 0.12 $ 2.34 $ 0.16 $ 2.50 Soft Pretzel $ 1.56 $ 0.08 $ 1.64 $ 0.11 $ 1.75 Pickles $ 1.33 $ 0.07 $ 1.40 $ 0.10 $ 1.50 Candy E3srs $ 0.67 $ 0.03 $ 0.70 $ 0.05 $ 0.75 Bottle Water $ 1.56 $ 0.08 $ 1.64 $ 0.11 $. 1.75 Frozen Lemonade $ 1.75 $ 0.09 $ 1.84 $ 0.14 $ 2.00' Coffee $ . 1.33 $ 0.07 $ 1.40 $ 0.10 $ 1.50 Cup of Ice $ 0.03 $' 0.47 $ 0.03 $ 0.50 Slush Puppies $ 1.56 $ 0.08 $ 1.64 $ 0.11 $ 1.75 20 OZ Soda (Plastic Bottles) $ 1.75 $ 0.09 $ 1.84 $ 0.14 $ 2.00 20 OZ Gatorade $ 2.44 $ 0.13 $ 2.57 $ 0.18 $ 2.75 12 OZ Can Soda $ 1.33 $ 0.07 $ 1.40 $ 0.10 $ 1.50 Sausage Biscuit $ 1.75 $ 0.09 $ 1.84 $ 0.14 $ 2.00 HOT BOILED PEANUTS .. ~~.-. Small $ 1.56 $ 0.08 $ 1.64 $ 0.11 $ 1.75 Medium $ 2.45 $ 0.12 $ 2.57 $ 0.18 $ 2.75 Large $ 4.00 $ 0.21 $ 4.21 $ 0.29 $ .4;50 , ADDITIONAL ITEMS WILL BE CONSIDERED UPON REQUEST ITEM 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. D PROPOSED MENU PROPOSED SALE PRICE $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ THE SALE OF TOBACCO, GUM AND ALCOHOLIC BEVERAGES IS PROHffiITED. COKE PRODUCTS MUST BE SOLD UNDER THE CITY'S CONTRACT. Attach additional pages as required 9 E PRICE PROPOSAL FORM CITY OF WINTER SPRINGS CONCESSION OPERATIONS FOR CENTRAL WINDS PARK The 1lIndersigned hereby submits the following price proposal and agrees to execute A contract with the City of Winter Springs to operate concession facilities in accordance with the terms and conditions as stated in the RFP and proposers response. Proposer offers to pay the City as follows: a. 5 % of Gross Sales less applicable State and Florida Sales Tax; {FIVt:j ,q SIGNA11JREOF PROPOSER, ~ J' m~ PRINTED OR TYPED NAME r /(e /) J. M A f'( N Af2. R TITLE Ow N E f( COMPANYNAME FRef)S R/J/Yts ADDRESS W g ,- SEAfi;,eE!C.. !-I'/ /Jill!::A.f jt 3:< ltJ! - 6:l.0 0 TELEPHO~?tJ7) ~qr.-S3S'! Fd:t;o7) bjh ~ 550 3 STATEMENT OF INSURANCE COMPLIANCE The undersigned firm agrees to obtain prior to award, of selected, General Liability Insurance, Automobile Liability Insurance and Worker's Compensation in accordance to the requirements as set forth in Request for Proposal, attached hereto. . r((ED's' ~I?/Jtf/..S BIDDER ~ ,,:rd. ~ AUTHOltr'ZEDSIGN URE OuJNEf( , ~ OFFICER TITLE DATE: s: JcJ-()3 10 ADDITIONAL DATA Fred's Franks will pay city of Winter Springs five percent 5%, as per contract agreement made with Pepsi Corp. Or any other soda companies that the City has an "agreement with. OR Fred's Franks will pay city of Winter Springs seven percent 7%. with no buying restrictions of any soda companies. We will use all name brand products, which the public will buy. CONCESSIONARIE RIGHTS . Subject to the terms and conditions of this agreemen~ the City Grants Concessionaire Fred's Franks the exclusive rights to provide food and beverage concessions at Central Winds Park. to,... 'Ji' Exhibit "A" Central Winds Park Pricing Of Bottled and Canned Products Effective 2003 . . .', ,. ':'., ~. ... .; " Package hJr;W~}~:;', Products Available Price/Case or Gallon 100z NR Bottles CSD Pepsi, Diet Pepsi $10.75124 120z Cans CSD See Attached . $ 7.50/24 3 " f 200z Non Carb Fruitworks, Upton . $16.95/24 200z Isotonic AIJsport $13.50124 5 .. 200z PET eso See Attached $16.95124 200z PET Water, Aquafina $ 7.95124 1.5L PET Water Aquafina $ 7.95/15 Chilled Coffee ,. Starbuck $10.75/12 160z PET Juices Dole $ 9.55/12 Energy Products StarbuCks Double Shot, SoBe $31.95/24 /, Adrenaline Rush, Dew Amp SoBe 200z Glass Various $11.10/12 1 Non-CarWl~ed Fruitworks Fruit Punchllemonade $ 9.47/Gal. . ~ GATORADE Fruit Punch, lemon Lime, Orange. $18.00/24 StraWberry Ice, Riptide Rush, Glacier ..-- Freeze c2 7/ -r; 31 C/o iiO 33 q) /' 1,) f... ~ .'~j Chris Caldwell From: Sent: To: Subject: Davidson, Jan {PBG} [Jan.Davidson@pepsLcom] Thursday, May 01, 2003 10:46 AM Chris Caldwell Pepsi Response - Hakan Guvenc Chris, Here is our pr~c~ng for Pepsi Fountain Brands: . They are all_5 Gallon Bag in the Boxes. Pepsi, Diet Pepsi, Sierra Mist, .Mt. Dew, Mug Root Beer, Slice Orange, Mt.Dew Code Red are all $12/gallon which is $60 per BIB. Dr. Pepper, Lipton Teas (Sweet, Unsweet, Raspberry), Fruitworks Punch, Lipton Lemonade are an-$~lotfWKi'ch is. $65 fler DID. _--. .---.... Jan B. Davidson 1700 Directors Row Orlando, FL 32809 Phone: 407-826-5956 Cell: 321-229-5135 .. 1 , ~ ~Co . 0~ 1\ x( ~{f 407-699-5359 ,. Fred's; f)"i . Franks ~i?II\~ Fax: 407-696-5503 REFERENCES SEMINOLECOUNTYSUPPORTSER~CES 200 WEST COUNTY HOME ROAD SANFORD, FLORIDA 32773 (407)665-5250 ANGIE THOMPSON CLASSIC DELI PROVISIONS '164 HOPE ST LONGWOOD, FLORIDA 32750 (407)834;3399 BRIAN CULTER ORL;\NDO CITRUS 3156 YORYCH LANE ORLANDO, FLORIDA 32822 (407)275-5610 TIM GARCEAU ~ , I; Fred's Franks is a family business doing concession services for 8 years. Fred's Franks has been providing concession services for Seminole County . for the past 3 years. Sylvan Lake Park - Sanford Asst. Director Steve Waring (407) 869-5966 . Supervisor of Sylvan Vito Petrone (407) 322-6567 Red Bug Lake Park Seminole County Director of Park Joe Gasperini (407) 788-0405 Supervisor of Red Bug Paul Kobylarz (407) 695-7113 Fred's Franks has been a business partner with the Seminole School System for over 5 years. Providing different school concession services when needed for special events. References available if needed. . l.' I ~ Fred's Franks will pay the utility and water monthly charges for the Baseball and Soccer Concession stands at Central Winds Park. Winter Springs must submit all utility bills for Baseball and Soccer Concession stands. . , ". , i. ATTACHMENT #2 To: Chuck Pula From: Bob Mark, Profitable Food Facilities (PFF) Re: Executive Summary of Report for visit May 30-31,2003 PFF was asked to review the following for the City of Winter Springs (WS): 1. Evaluate the concessions operations at Fields of Excellence with respect to profit potential and performance. 2. Review the proposal from Pepsi to assume the role of beverage products supplier and corporate sponsor in exchange for services and marketing assistance. 3. Weigh the pros and cons of allowing the concessions to be run by an outside vendor, as well as a review of the bid proposed by that company (Fred's Franks.) 4. Supply any other suggestions regarding menus, expenses (food and labor,) POS, staffing and general information pertinent to better understanding the necessary systems and procedures for a successful food and beverage (fib) operation. The high.'Iights: · Yearly fib losses (8-10% of revenues in recent years) are due mainly to a 45-50% cost of goods (COG) and 40% labor (wages only.) Both areas of expense can be fixed with a doable and reasonable plan. · The current high COG is a result of a beverage-driven menu mix (the top four sellers account for 63% of sales) that is not cost-friendly. COG can be easily be lowered to an acceptable 10w-to-mid 30s% by doing the following: o Switch from bottled sodas to fountain (bag-in-the-box concentrate that is mixed with C02 and water) sodas to reduce the costs by 50% for a single menu item that represents one-fifth of sales. o Take advantage of better pricing offered by Pepsi and negotiate better pricing from Best Pops. o Minor menu price adjustments on a few key items. · Lower supplier prices and menu engineering is not a guarantee for low COG. Concessions management needs to adopt a program based on tasks that monitor expenses and revenues in a timely fashion, including periodic inventories designed to reconcile any possible cash or product pilferage. · High labor is rooted in the manager's rate of pay. An estimated 5-6% can be regained by aligning management hours closer to business needs rather than a schedule that is static. · The fib operation is in a rut, like on autopilot. It cannot ~e taken to the next level until management addresses the above issues. and assumes a sense of ownership that welcomes change and is always looking for the next way to improve things. · The Pepsi contract is standard and generally favorable. In exchange for the scoreboards and mostly fair prices, WS selJs its soul to the Pepsi logo. · The concept of bringing in an outside concessionaire is the easier fix but really deserves further investigation: 1 o The proposaVbid from Fred's Franks is realistic and reveals clues that they understand the nuances of the fib business, which is good. They know that there is enough money to be made even after paying a cut to WS. That alone should Jl?otivate WS to try it alone one more time. . o Fred's Franks is just.a name for now. Reference checks are in order (who have they done business with in the past, and what was the outcome, in the opinion of the client.) They must also be seen in action. City employees should make unannounced visits at venues where Fred's Franks is currently working before any decisions are made. PFF. believes that it is the wiser move for WS to keep concessions. However, there is a fine line that separates maximizing profits while still satisfying (or better yet, exceeding) the fib anticipations of Park users, and that line is always moving. It is the job of the concessions manager to watch that line so that expenses are kept to a minimum and customers are continually getting satisfaction. · The concessions are capable of generating profits in the 5% range at the current volume level. Any further gains will be seen through sales building. Sales building is a function of markefmg and repeat business from Park users. Marketing plans should not be put into motion until sound accounting basics are in place; this ensures that all the hard work put forth will not be in vain. , " , " 2 To: Chuck Pula, Winter Springs (WS) Parks and Recreation Director From: Bob Mark, Profitable Food Facilities (PFF) Re: Visit to WS concessions operation, May 30-31,2003 The City of Winter Springs has reached a crossroads with the food and beverage (fib) operations at its sportsplex: Because of repeated bottom line losses for the last several years, the decision has been made to either put into place a plan that ensures reaching at leastbreak-even (preferably a profit) or sub-contract an outside c~mcessionaire that will run the show for them and pay a percentage of the sales for the privilege of doing so. PFF was hired to evaluate the situation, mainly to determine whether it makes sense to give uptpe concessions to another party or if there are ways to salvage fib and keep it as an integral part of the Parks and Rec system. The following report is in no particular order, but addresses topics based on observations during the two-day visit and data gathered from information supplied by the City. THE NUMBERS Complete sales data was unavailable for fiscal year 2002, but 2001 was the best year ever in terms of fib revenues. On $97K in sales, the net loss was $8500, or about 9%. If the fib operation is to be'profitable, two areas of expense must be addressed. That is (1) cost- of-goods (COG). and (2) labor. It would not be out ofline to expect that a city-run fib operation run a COG at 30-32%. For the last five years fib has averaged a 50% COG. The community deserves value, but not at the expense ofthe city running into red ink. A review of the menu prices, prices paid for supplies and menu mix (how many of each item is sold) reveals that there are opportunities that can be fixed: · Menu prices to the public, in general, are satisfactory. There is no need to take a blanket approach and raise everything. It is a quick fix that rarely results in money going to the bottom line. · Prices that the City pays to its suppliers run from satisfactory to scary. This is obviously not the biggest account in town, which means roc,k-bottom deals cannot be expected. The account does deserve respect, however, ffQm the standpoint that the supplier knows this is a low-maintenance situation and a very reliable customer, especially when it comes to getting paid. o Sysco, Lance and Sunspot appear to be treating WS fairly, as prices are decent and increases over the last year have been minimal to zero. Sunspot has advised that if the equipment (slushie machines) were purchased (price unknown-it is a freebie for now,) the price of its product would be reduced by 50%. 1 . , o Best Pops' prices could stand a review. Candy and snack prices are suspect, including substantial increases (passed on from the manufacturer, as noted on an invoice or two) over the last six months on prices that were arguably high to begin with. These increases have been from 5:-14%. It is time to shop around for a better deal. o Coca Cola prices are typical, but the proposal from Pepsi could change the picture for profitability significantly with some key moves (more later.) · The menu mix shows that only four items, all beverages, account for 63% of total revenues. Unfortunately, those items average 39% COG. All fi'b operations, public and private, chain or independent, rely on the beverage half of the menu to offset higher food costs; these beverage costs are too high. Chart No.1 shows the week May 12-18,2003 fi'b menu mix. The theoretical COG (perfect world scenario) for this week was 41.7% (value of product rung into the cash registers divided by net sales.) If the actual COG (value ofprod~t used based on inventory) is, for example, 43.3% (as it was for fiscal year Oct-July 2002-the most recent figures PFF had,) then the 1.6% difference or loss is likely attributed to waste, product~ilferage or loss of cash at the registers. The COG for the last five years has been more like 50%, which may indicate a more serious set of circumstances going on with respect to pilferage or money not making it into the till. . The number one seller is bottled soda, the biggest profit killer in the concession business. By switching to fountain soda (lowers the cost per drink by half,) selling Pepsi's bottled water (22 cents per bottle savings,) and making a few other minor adjustments shown on Chart No.2, the overall COG is lowered by 8.1 %, which puts the operation at almost break-even. Other minor pri"cing issues: · Nacho cheese sauce is 12 cents an ounce. If someone wants a 4 oz. cup of sauce for dipping a pretzel the charge is $0.25 for something that costs over $0.50 (including the cup) to make. · For a cup of ice, the customer is charged $0.25, even if they are buying a bottled beverage. This seems severe. PFF thinks that it should be free with a soda, but a $0.50 charge for someone that wants ice only. If the conversion to fountain soda happens, the bottle/cup of ice is no longer an issue anyway. · Chicken fingers, candy and sausage biscuits are the biggest offenders of poor pricing. These, and the cup of ice, are candidates for raising prices. · There are many other items on the menu that are pushing the limits of being priced too low (or costing too much at the back door.) Incr~asing prices on these items by just a quarter could help get the COG much lower,~~ut the purpose of this exercise is to show that there is great impact with minimum adjustments. The other key area is labor. The cost of staffing the concessions (not counting workman's comp, payroll taxes, benefits, etc.,) in the best of all worlds would be about 25-30%. For fiscal year 2001 it was 40%+. The biggest part ofthat is the salary being paid for the concessions manager ($13.66 an hour.) 2 The issue is not really ifthis rate is too high, but whether the job descriptiori.for this position has been crafted to reflect a list of responsibilities that go ~and-in-glove with the rate and ultimately ensure the success of the concessions. Bonnie Roberts is not at fault if she has never been asked to do the things that must be done to make fib pfO'fttable for the City. Now is the time to change that. I Among the list of things that need to be in place: .. A set of systems and procedures that must be done by the manager to monitor the numbers on a timely basis. The fact that inventory is taken but once a year is an invitation for failure. During peak seasons (spring and fall) a weekly inventory is more appropriate, and in the winter and summer, a monthly count is satisfactory. .. The purpose of inventories is to reconcile usages with sales rung into the register. By doing frequent counts, discrepancies can be investigated or researched as opposed to doing nothing and accepting a loss, the rewarq for waiting all year to see if things came out okay. II By doing a theoretical COG (see charts,) the City or concessions manager also has useful data to help make decisions in changing prices or adding and deleting items fi;om the menu. II Labor costs should also be monitored on the same schedule as the inventories. II Supplier prices must be monitored at least monthly, an easy task since there is such a limited amount of goods coming through the back door. II All menu items need to be broken down into their components to get a plate cost before a price can be determined. That includes the paper products (napkins, straws, lids, etc.) that make up the final product. II The concessions manager should be reporting fib results to the Director on a weekly basis, in the form of a one-page report every Monday morning. That report is a summary of the previous week's results. It should include: o Concessions sales for the week; sales +/- from last year, same period o Per cap spending for the week (how much are customers spending) o Inventory product levels (total dollar amount for food and drink) o COG for the week, including waste dollars o A comparison of actual COG vs. theoretical COG and explanations for any differences o Weekly labor dollars, also expressed as a percentage of net sales o Any miscellaneous info related to staff, customers, etc. It is PFF's opinion that Bonnie's 40 hours per week are not being used to the best advantage of the concession business. Her early morning shifts an9 having weekends off (not all weekends, but concessions is a business that demands that fu:anagement work most, ifnot all) is not efficient in terms of getting the most ''bang for the buck." As an example, if Bonnie were to shift her workday/week so that at least 20 of her hours were used during times when the concession was open, that is 20 hours that can be cut from the part-timers, many of which by her own admission (Kathy, her best employee, agrees) are poor performers. Not only are the savings significant (40 weeks per year at 3 20 hours times $7 per hour equals $5600, or 6% on the bottom line,) the City has the peace of mind that their best person/manager is on site when needed most. There are also times when neither }3onnie or Kathy are manning the concessiop.s, meaning the most unreliable people are in charge. Sure enough, this has been when the most challenges or problems have occurred with personnel. Finally, a more difficult part ofthe manager job description to define is commitment and an attitude towards change and moving forward. Trustworthiness and loyalty are not issues in this case, as Bonnie has proven to be all of that and more. The concern is more about a willingness to adopt a "sense of ownership," which requires more awareness with the numbers and a desire to grow the fib business. Expressed in other words, the manager must be actively seeking ways to improve the fiscal strength of the bottom line and find ways to stimulate inter~st with patrons that will encourage increased sales. For example, the menu is tight (that's good,) yet from day to day it is often tightened up fUrther because whoever might be working that evening or day deciqes that popcorn or the kielbasa is too much trouble to serve, so it is unavailable (this is happening.) This is hardly the way to build a following with the community. REVIEW OF PEPSI CONTRACT · Pepsi needs to be aware that there will be a conversion to fountain soda (which may catch them by surprise.) They should install the equipment for fountain service at no charge. · New scoreboards are the obvious attraction. It is hard to find fault with the prospect .0fPepsi picking up the tab for $24K. To a purist, the biggest drawback is strictly aesthetics; the WS sportsplex is a beautiful venue, and to have Pepsi logos splashed all over the outfields takes the edge off the clean appearance of the parks. Welcome to the world of corporate sponsorship. · The $5K Marketing Support budget (Exhibit "B" of the contract) twice makes reference to the program being "valued at $5000 per year." This is subjective. It basically amounts to more marketing punch for Pepsi in the form of signs and logos everywhere. "Product Donations" is appealing, though. · Prices quoted in Exhibit "A" are mostly fair. The bottled water is 22 cents better than Coke's product, and the Allsport (like Coke's Powerade) is 12 cents cheaper. The bag-in-the-box price is high ($65 for five gallons-try negotiating for a price closer to $45-ifthey counter with $50-52, it is still a major gain.) · Much of the contract is dam hard to understand, thanks to th~ legalese. It is as difficult to navigate as the "lNVIT A TION TO BID" that the city asks applicants to go through for the concessions deal. REVIEW OF CONCESSIONS PROPOSAL (FRED'S FRANKS) Ideally the City should keep the concessions. Just,because it hasn't made money in the past is more a reflection on the above issues rather than the mystery/pain-in-the-neck of running a snack bar. After all, if someone from the outside is willing to come in and 4 cheerfully pay the City a cut of the action for the privilege of taking over, it 'is certainly a clue that there is money to be made. While in town, PFF made an attempt to check out the Fred's Franks (FF) oper~tion. Information was given that they were working a softball tournament at the Seminole Softball Complex about 10 miles away. This turned out not to be the case; a family has been running the concessions there for the last 13 years and had never heard ofFF. The reasons are many. Giving up the concessions to a subcontractor means letting go of control over subjective issues like quality of employee, quality and variety of food and perception of cleanliness, to name a few-if patrons have a complaint, the City will take the hit regardless of who is responsible. The upside to that statement is that perhaps FF can improve on all three areas, but better to see it all first-hand rather than take their word for it. It is suggested that more than one person from the City pay an unannounced visit to see FF in actio~. Ifthe City is to make an informed decision, they must first check this outfit out by attending at least one, if not more events they are working. . The proposal submitted by FF appears reasonable: · References are made that suggest these people know the fib business as true experts, including menu variety, inventory levels and the need for smart staffing. · The proposed price list is fair. This includes some increases and decreases compared to the WS menu. · The 5% payout is fair, considering the revenues are only $1 OOK. The 7% option also makes sense. If there is a concern over beverage branding, ask for their list of drinks to be sold. If Pepsi is to be the supplier and the City makes arrangefuents for fountain soda to be installed, then perhaps negotiating with FF to payout 6-7% is a possibility. MISCELLANEOUS · Math Puzzle assigned by Chuck: The City will save $29750 over seven years ifit converts to fountain sodas. That is based on sodas accounting for 18% of revenues ($18K on a $100K season.) Bottled sodas COG is $8500 per year, fountain $4250, a 50% cost savings. $4250 x 7 years = $29750. Seven years represents the length of the contract with Pepsi to get the scoreboard deal ($24K.) So if the Pepsi deal falls through, but the City converts to Coke fountain and goes out and buys its own scoreboards, they could pay them off in soda savings in about 5Y2 years. , · The cleanliness and organization at the two venues and the "S,torage shed is satisfactory. Food handling and sanitation procedures are good. Bonita lamented that storage is not sufficient on busy days, primarily because of the need to chill or ice many bottles of sodas. Converting to fountain will end that problem. · If the City is to purchase the slushie machines, make sure that the price is equal to the condition and age of the equipment, just like a used car. 5 11 The facilities all over are very nice. Too bad about all the black gurri ,blobs beginning to cover the concrete. An occasional power wash or steam clean should be done. It is smart that gum is not available at the concessions. 11 The kitchen space at the main stand is tight, but not impossible to work. in. Bigger does not mean better when it comes to layout; stand No.2 is a bit roomier. Both designs have been done with forethought, as each can handle four lines of customers if things ever get super busy. There are also floor drains exactly where the fountain towers should go, which is between the two most central windows; the beverage lines for the bag-in-the-box can be run through the ceiling instead of tearing up the concrete floors. The only foreseeable challenge in future years of increased volume would be where to store extra frozen goods. That would necessitate a freestanding walk-in freezer. · Going to the bank only once per week is risky. There is no safe on the property, so the daily cash deposits are placed in a locked cupboard. For example, on Sunday night, May 18th, the cash on hand would have been over $3000. Not good. Too much exposure, and the insurance might not cover an inCident. · Although Bonita says'it has never been an issue, letting more than one person wprk out of a cash register makes it impossible to go after an employee that comes up short after a shift. · Bonita keeps sort of a "ship's log" or diary for business, but it could be more useful ifit had certain bits of info collected each day of business. That might include sales for the day, head counts, per cap spending, the weather, special circumstances like cancellations or incidents involving fi'b, employee issues, etc. · The cash registers are adequate. They can generate the basic reports that are enough information to help with inventory reconciliation and menu mixes. SUMMARY -, Re-tooling the menu alone (fountain sodas, a little help from vendors with pricing, and a few menu price, changes) can take the concessions to break-even. Attacking the labor can put it 5-6 points into the black. But none of this will happen ifthings remain on autopilot, which is where flb is now, in PFF's opinion. Any further progress with profits will have to come from increased sales. Increased sales means more work in the marketing of the menu. As a comparison, the concessions at Seminole are a notch above WS. The menu had more variety. There was a barbecue set- up outside. They pour fountain sodas (three sizes.) It would take little effort to match what they are doing, and not much more to exceed it. This, and the paragraph above can only happen with some extra work. It is a good bet that FF's busin~ss plan is rooted in some increased sales and profits to offset the percentage being paid' Qut to the City. Bringing FF in would seem to be nothing more than a convenient fix for the City, maybe the path ofleast resistance for getting things to happen with a minimum of pain. At this time, in addition to not knowing ifthis FF is as good as it claims to be, is the unfamiliarity ofFF as a business partner with the City or any other client. FF may turn out to be more high-maintenance than desired. It is worth doing a reference check on 6 them with a current or past client of theirs (they do not provide any references in the proposal, which someone might argue is a red flag.) PFF favors the idea of holding onto the fib business rather than walking away-from it. With committed management and a" platform that expects the concessions to be operated as a business within the business, this is an operation that can easily be a credit to the City instead of a liability. PFF remains available from afar at any time from now onward, to call for a second opinion or to use as a sounding board for direction. It is hoped that the WS staff will take advantage of this arrangement and keep communications open as the project takes shape and moves ahead. ." , ~ , <. 7