CDT Summer 2022 - 17

GREENE: in my opinion, the ability to innovate selfoperated
dining allows more operational flexibility
and opportunities to innovate. With self-operation,
the sky is the limit, as long as you can hire quality
employees and afford the startup costs. it allows
the program to be more responsive, consider any
innovative services, and partner more closely with
the students. While contracted partners can do
much of this, it often requires re-negotiation of the
contract or extensive dialogue.
SHRIVASTAV: the university
provides an amazing
opportunity to innovate. For
example, we used the business
school to formulate a new meal
plan. We are able to operate
national and local brands on
our own. in fact, we go to local
ethnic restaurants in a daily
rotational manner-a concept
called globe-in our retail
program.
WHAT IS THE
ABILITY OF THE
PROGRAM TO MEET
INSTITUTIONAL
REQUIREMENTS
FOR FINANCIAL
CONTRIBUTIONS?
AUBREY: Self-operation
advocates the positives of not
being financially focused or
profit-driven. if a program has
a negative cash flow, it will not
have the resources necessary
for reinvestment into the
program, either self-funded or
to borrow funds and make payments. outsourcing
often offers a cash investment, commission, or a
combination of both to update furniture, fixtures,
and equipment. the investment comes with the
length of the agreement and reimbursement of the
amortized cost if the association is ended early. the
outsourced cash investment is attractive to avoid
borrowing funds or allocating capital reserves. the
investment is typically a zero percent loan or at the
cost of capital with the investment depreciated in
the operational financials.
GOLDBERG: Using university resources (loans
Transitioning from
contract to self-op
was challenging.
It came down to
communication
in groups and
communication with
individuals, it took
a lot of planning
and strategy, and
the execution was
amazing.
[Shrivastav]
or reserves) is more manageable than a contractor's
investment and the impact of annual operating
fluctuations. it also depends on the contract's provisions
and safeguards. the reality is, and i steal this quote from
an esteemed colleague, " manage like you are a contract
company and meet your commitments. " in the case of
controllable costs (food and labor), cost management
is similar. the contractors rely on national and local
contracts that a self-op has to create. Perceived food
cost savings typically benefit the company and not the
university. i feel it is cost
neutral. Finance and other
support are achieved
similarly with a self-op,
shared services model
if the campus embraces
such. it has to be analyzed
as to cost/benefit and
current operations in
other areas. it does add a
dimension to supporting
dining that is real. Control
is much more transparent
at the self-op level.
WHITE: there is a
persistent belief in
the marketplace that
management companies
are a ready source of
significant capital. When
contractors do make a
capital investment, they
expect to generate an
internal rate of return in
addition to commercial
interest on the loan.
thus, this is a costly
form of borrowing when
compared to the type of bond financing that an institution
can secure. Although a contractor may maintain that
its capital contribution is interest-free, the reality is that
interest is built in somewhere else in the equation (i.e.,
in profits). Should an institution fund significant capital
projects through a dining contract, care must be taken to
ensure the annual amortization is not so high that it leaves
the operator without enough budget flexibility to respond
to changes in the business environment or institutional
needs. this is especially important as programs work
their way out of financial challenges brought on by the
pandemic.
ContRACt oR SELF-oP? | CAMPUS DINING TODAY
17

CDT Summer 2022

Table of Contents for the Digital Edition of CDT Summer 2022

CDT Summer 2022 - 1
CDT Summer 2022 - 2
CDT Summer 2022 - 3
CDT Summer 2022 - 4
CDT Summer 2022 - 5
CDT Summer 2022 - 6
CDT Summer 2022 - 7
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CDT Summer 2022 - 17
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CDT Summer 2022 - 64
https://www.nxtbook.com/nacufs/NACUFS/summer-2024-campus-dining-today
https://www.nxtbook.com/nacufs/NACUFS/spring-2024-campus-dining-today
https://www.nxtbook.com/nacufs/NACUFS/winter-2023-campus-dining-today
https://www.nxtbook.com/nacufs/NACUFS/cdt-summer-2022
https://www.nxtbook.com/nacufs/NACUFS/cdt-national-conference
https://www.nxtbook.com/nacufs/NACUFS/campusdiningtodayspring2023
https://www.nxtbook.com/nacufs/NACUFS/cdt-fall-2022
https://www.nxtbook.com/nacufs/NACUFS/cdtsummer2022
https://www.nxtbook.com/nacufs/NACUFS/campusdiningtodayspring2022
https://www.nxtbook.com/nacufs/NACUFS/campusdiningtodayfall-winter2021
https://www.nxtbook.com/nacufs/NACUFS/campusdiningtodaysummer2021
https://www.nxtbook.com/nacufs/NACUFS/campus-dining-today-spring-2021
https://www.nxtbook.com/nacufs/NACUFS/Winter2020
https://www.nxtbook.com/nacufs/NACUFS/summer2020campusdiningtoday
https://www.nxtbook.com/nacufs/NACUFS/Spring2020
https://www.nxtbookmedia.com