n contract administration - manask budget woes hit restaurant ... with your contactor manager(s),...

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Introduction Most cultural institutions have a number of contracts with outside vendors covering many or all of the following areas: � Restaurant/café � Food/beverage carts � Approved Caterers � Approved Vendors � Vending Machines In working with our clients we find that many of you that have one or more of these contracts in your area of responsibility do not do as good a job monitoring and managing the terms and conditions in the contract (also known as an Agreement) as you should due to the many areas of responsibility you handle. In turn this oftentimes manifests itself into differences and conflicts with the operators/contractors that are providing

Volume 5 Spring 2003

Food Service News & Views For Museums, Aquariums, Botanic Gardens & Zoos

services based on the terms and conditions in these contracts. Commonly, contracts are difficult to negotiate and both parties (the institution and the contractor) can’t wait to get them signed and filed away. After filing the contract it is commonplace for the contract to never be viewed (or reviewed) again unless there is a problem with the relationship.

Contract Purpose The purpose of the contract is to memorialize the operating, financial and service terms and conditions that both parties have agreed upon. When the contract goes in the filing cabinet, what have you done to insure tha t you know the institution’s and the contractor’s obligations and responsibilities and then are closely monitoring these important provisions? Key points and terms that should be in any well-written and crafted contract include:

� Terms & Termimnation: Start and end date of Agreement, renewal and termination terms and conditions.

� Responsibilities: Who is

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NNNNEWSEWSEWSEWSBBBBRIEFSRIEFSRIEFSRIEFS Contrac t Admini s t ra t ion :Contrac t Admini s t ra t ion :Contrac t Admini s t ra t ion :Contrac t Admini s t ra t ion : Ar e You M o n i t o r i n g & M a na g i ng

Y o u r F o o d s e rv i c e C o n t ra c t ? By Arthur M. Manask

Editor’s Note: The first several NewsBriefs are intended to make you aware that foodservice is not your institution’s primary mission and purpose, but an area that deserves to receive your close attention and supervision.

State Budget Woes Hit Restaurant Inspections. State and county budget crises spawned by a weaker than expected economy have resulted in a wave of belt-tightening, with foodservice inspection services among the casualties. Checking Rhode Island’s 2,000 commercial and 6,000 noncommercial foodservice facilities was a challenge with a staff of 15 state inspectors. The 13% staff reduction—necessitated by a $2.5 million reduction in the Department of Health’s fiscal 2003 budget---means 1,000 fewer visits this year. Operations against which complaints are filed will be checked; many others will not be inspected. Similar reports come from South Carolina’s Department of Health and Environmental Control, Washington’s King County (includes Seattle) that is looking at raising the cost of inspection fees by 76%. (Restaurants and Institutions 2/1/03).

Keep your visitors, guests, staff and volunteers safe. Avoid potential adverse press and publicity from a food safety and/or sanitation issue. Consider using independent food safety and sanitation inspection services like Indianapolis Museum of Art, The National Gallery of Art and Chicago Botanic Garden among others. For information about independent inspection service in your area email [email protected].

Pre-Oscar Mystery Illness Identified. The March 2 event at the Regent Wilshire hotel in Beverly Hills honored scientific and technical achievement in cinema. A disease that spreads through food infected with sewage pollution is


What’s Inside

� Museum of Science and Industry’s Creative Genius Provide Guests a Greater... 3

� Visitor Foodservice Alternatives: Vending Machines 101 4

� Dealing With Contractors: Playing The Contractor Investment Game 5

� Do It Yourself Operator Selection 5

� Contractor — Operator Tips For Responsive & Winning Proposals 8

� Book Review: The Complete Guide to Foodservice in Cultural Institutions 11

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(Continued from page 1)

likely responsible for a mystery illness that overcame at least 100 guests who attended this pre-Oscar ceremony. After collecting stool samples from some of those infected, epidemiologists have classified the disease as a type of Norwalk virus said Dr. Lauren Mascola, head of infectious diseases for the Los Angeles County Department of Health. Among the infected were Laura Ziskin who’s producing the March 24 Oscar telecast. The menu included arugula salad, lobster bisque, roasted beef with a side of halibut, mashed potatoes, tomatoes and asparagus tips. Among the desserts were berry sorbet, chocolate cake, lemon tart and assorted fruits. The Norwalk-type virus traditionally spreads through food tainted with fecal material, often shellfish infected by raw sewage pollution in the ocean or meat tainted by stool from sick food handlers. Investigators don’t believe the outbreak resulted from deliberate contamination and said it does not seem to be the result of faulty preparation at the hotel. (Associated Press, 2002)

How Safe is Your Food From Terrorists? There are no guarantees, of course, but government and producers are working to keep the nation’s larder safe and secure. It wasn’t long after September 11 that the nation’s attention turned to other poten-


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(Continued from page 1) responsible for what? Equipment, j ani to r ia l , t r ash, u t i l i t ies , telephone, customer satisfaction, pest control, insurance, etc. to name a few.

� Financial: Budget preparation, reporting to the institution, price adjustments, capital investment, payments to the contractor, payments from the contractor for commissions/rent, if applicable auditing, etc.

� O p e r a t i o n a l : M e n u / p r i c e changes, marketing, hours of operation, frequency of operations review meetings, annual inventory of institution owned FF&E, etc.

How to Monitor & Administrate Contracts The following are recommended actions that can be taken when the contract is signed, ‘before’ it is filed, and if already in the filing cabinet, ‘take it out’ and do this now:

Contract Action Schedule: 1. Make a copy of the contract(s) that

fa l l unde r yo ur a r ea o f responsibility.

2. Use a ‘highlighter’, carefully, page-by-page, highlight any and all items in the contract that require an “action” by your or the contractor, have dates and/or timing associated with them (see above key points for examples).

3. Take this marked-up contract and prepare a spreadsheet of all ‘action items’ with their respective associated date(s) and timing. This should be a chronological list starting with the first action item after the date of contract signing (such as, ‘approve opening menus and prices’ or, review and approve pre-opening budget, through and including some of the last action items such as, ‘provide at least 6-months notice of your intention to renew the Agreement’).

4. Then, using whatever scheduling/contact software you might have that would be applicable and provide you ‘critical alarms’, enter all the action items and their respective dates to insure you are reminded of what needs to be done and when it needs to be done.

Implementation of Contract Action Schedule Your operator/contractor should be doing exactly the same thing as recommended above. We find, however, in 95%+ instances this is not being done, further, the operator’s onsi te manager , o r manager responsible for the contract terms and conditions may not have even read the contract document. When you have completed number three (3) above we recommend you have a meeting with the key manager from your contractor (the manager that has contract responsibility, the person that signs the contract), that is responsible for implementing the contractor terms and conditions and provide them a copy of your chronological listing. Review it with them item-by-item, in detail to be sure there is a clear understanding of the respective party’s responsibilities and obligations, including, of course, key dates and timing issues (like when reports or payments are due each month). Immediately following your meeting with your contactor manager(s), document the meeting with a brief memorandum to the contractor with copy to your contract file.

One Time Effort Improves Contractor Relationship While it takes some effort to do what is recommended above, the good news is that it only has to be done once at the beginning of the contract and only updated when the contract is amended. If this is done in every case with e v e r y c o n t r a c t u n d e r y o u r responsibility, you can reasonably be assured of fewer issues, conflicts and unhappiness as it relates to ‘contract terms and conditions’ during the life

Contract Administration: Contract Administration: Contract Administration: Contract Administration: Are You Monitoring & Managing Your Foodservice Contract?

NEWSBRIEFS

of the contract. �

Share Best Practices As indicated above, many contract administrators at cultural institutions do not or have done what is detailed under the four points above. Manask & Associates would like to share ‘best practices’ in the next issue of The Manask Report.

If you have a success story to share, email to [email protected].

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WWW.MANASK.COM The Manask Report

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G u e s t s a t i s f a c t i o n a nd participation are on the rise with the opening of the Brain

Food Court and Café at the Museum of Science and Industry in Chicago. The consolidation of restaurants, updated technology, expanded menu options and design has made the food service at the Museum cutting edge. The Museum of Science and Industry formerly operated three separate restaurants each with its own theme. Pizza Hut offered name and product recognition, Café Spectrum served up burger, fries and other traditional hot sandwiches while the Century Room prepared hot breakfast each morning, cooked to order exhibition selections, soup, salads, deli sandwiches and desserts. Andy Zakrajsek, Director of Business Operations for the Museum, utilized his extensive foodservice background along with the design team from Aumiller Youngquist, P.C. to create a food court atmosphere. The goals of the project were to consolidate the three restaurants while offering guests an interactive environment. Constructing such a vision would take months and required planning to provide foodservice during that period. The Museum first had to equip a small existing kitchen space located in the Henry Crown Space Center with ample equipment to support both Museum guests’ needs along with those of the special events department.

The Brain Food Court is a made up of six unique stations each offering flexibility in design. The Grill station features a 30” circulating grill with a viewing window for guests. Pizza makes it way from the topping station to an open flame oven viewed from any location in the food court. Favorites, the Museum’s cooked to order station is equipped with infrared burners ideal for a quick stir-fry. The Deli serves up freshly baked breads from the two ovens located on the line. Speed and variety were essential elements in the design plans. An island offers versatility serving as a tossed to order salad station and soup bar and dessert center, however during peak season features a variety of prepared sandwiches and salads to accommodate the increase in visitors looking for a

quick meal. The Museum works closely with their foodservice contractor, Sodexho, to create menus that will meet guest and Museum employee needs. The Brain Food Café serves up specialty coffee drinks, continental breakfast, pastries, express salads, sandwiches and snacks. A not for profit venue such as the Museum of Science and Industry relies heavily on the per cap spending in food service to support the organization. To date, the per cap is up 12 percent since the opening of the Brain Food Court and Café in October 2002. �

Article Submitted By:

Museum of Science and Industry

And Sodexho USA

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(weatherproof), and if applicable, there are roll down security doors (with cash emptied daily and a sign on the machines indicating this is the case).

Where do we obtain Vending Machines, products and services? There are two primary options as follows:

� Cold beverage machines are available from the local Pepsi-Cola or Coca-Cola bottler; and,

� The same and additional (cup dispensing soda machines) cold beverage machines plus all the other machines to dispense the items listed above, including bill changers, etc. are available from what are called independent ‘ r o u t e v e n d i n g m a c h i n e companies’ in your area.

How do these Vending Machine suppliers work? Usually, the local bottlers will provide the cold beverage machines at no cost to the institution, fill the machines, provide all repairs and maintenance, collect the revenue, and, depending on the total sales volume generated, possibly pay a percentage of the total revenues back to the institution. Optionally, the local bottlers will rent these cold beverage machines to the institution; sell the institution the product (sodas, bottled water, juices, etc.), enabling the institution to stock (fill) the machines, collect the revenue and profit by the difference between the cost of the rental, product and revenue collected. Route vending machine companies will normally provide all the equipment and always provide all the product and related service, collect the revenue, and possibly, depending on the total amount of revenue (versus the number of machines; i.e. , their capital investment in equipment), pay



Visitor Foodservice Alternatives:Visitor Foodservice Alternatives:Visitor Foodservice Alternatives:Visitor Foodservice Alternatives: For Small Museums, Zoos, Botanic Gardens & Historic Homes

By Arthur M. Manask

VENDING MACHINES 101 When planning visitor foodservice, following are the alternatives most cultural institutions can consider presented the ideal order of popularity:

� Restaurant; sit-down, table service � Restaurant; self-service with table

delivery � Café; smaller restaurant; limited

menu, casual service, self-service and/or with table delivery

� Cart; limited variety of hot and cold beverages; snacks and bakery products

� Cart; hot and cold beverages with limited variety of prepared and pre-packaged sandwiches, salads, possibly soup (if odor/smell is not an issue); snacks and bakery products

� Vending machines

What is the definition of ‘Vending Machines’? Under most circumstances, vending machines are coin (and bill acceptor) operated machines that will dispense a wide variety of hot and cold beverages, snacks (candy, bakery products, mints, etc.) as well as items such as cold and frozen prepared foods, milk, juices and even ice cream. Vending machines are not as desirable as the primary options listed above because they are just ‘machines’, impersonal, and usually not very attractive and do not blend in well with most cultural institutions’ décor and ambience.

When should Vending Machines be used? Acknowledging that most full and limited service restaurants, cafés and carts as described above are not profitable operations in and of themselves for the institution or the operator (if not self-operated), vending machines are a cost effective way, and possibly even an ‘income producing’ way for smaller (visitor attendance under 100,000+/- visitors per year) institutions to provide this necessary

visitor anmenity. Vending machines do not have to look ugly. If your institution is thoughtful in the selection of your vending machine provider (discussed later), any and all vending machine exteriors can be substantially customized (color and even personalization) to fit in to most any interior (or exterior) décor, including creating enclosures to hide the top, sides and back so your visitors only see the front where the product is displayed and merchandised.

Where should you locate the Vending Machines? As with any retail operation, it would be best to locate these machines where visitors will easily see them, ideally, on their way in to your institution and again on their way out. If this is not possible, they should be placed along high-traffic paths, again, as visible as possible. Assuming you are using vending machines in lieu of a manually operated café or restaurant to provide your visitors a refreshment or snack during their visit, it would be good to have a small seating area or at least several tables and chairs and trash receptacles. Standard 110-volt convenience outlets (usually one circuit for each machine that has built-in refrigeration with other machines able to share one 110 volt outlet). In order to optimize vending machines as a visitor service and amenity, they should be as v i s i b l e a n d prominent as possible. In addition, it is common to place a d d i t i o n a l machines in staff/volunteer only areas as well as outdoors (if your visitors will also be touring outdoor spaces). If outdoors, it is important to be sure that the machines have enclosures

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T here’s no free lunch” is a time-worn truism that applies to a food service contractor’s

investment in your dining facilities as fully as it does to any other “free-something” offer. In most cases, this is not an investment in the same sense that you use the term when buying new equipment or putting money into the stock market. Contractors expect a profit from the services they provide and a healthy return on their money when they advance funds for your facility. If anything goes wrong, no matter the cause, the client must pay back the balance of the “investment,” just as you would if the bank called your loan.

‘FREE LOAN’ (PLUS INTEREST) In a recent proposal, a major contractor spelled out its “investment” offer with unusual candor. The contractor offered a “XXX,000 interest-free loan” to be repaid over the life of a 5-year contract. However, “in the event this Agreement expires or is terminated...prior to the complete repayment of this loan, Loan (client) shall repay the outstanding balance plus all accrued interest” at prime rate plus 2% from the date the loan was made. The contractor’s purpose is unmistakable. It will advance funds to gain or retain an account, but does not intend

Dealing With Contractors: Dealing With Contractors: Dealing With Contractors: Dealing With Contractors: Playing The Contractor Investment Game

THERE’S MONEY TO BE HAD, BUT IT’S NOT FREE AND THERE ARE STRINGS

of its investment over a period of, typically, five to 10 years and assur-ance that, if the contract is terminated by either party for any reason before the end of that period, the client will reimburse the unamortized amount. Therein lies the problem. It’s not un-known that a client becomes dissatis-fied with the services long before the amortization period ends. What then? If the investment is, for example, $500,000 over five years and the con-tract still has three years to run, you must write a check for $300,000 to terminate the contract. You might ask the successor contrac-tor to pay off and refinance the amount, but you are not offering the new company much of a benefit. If it, pays out funds, but gets no “bang” for its investment, its terms may be tougher than they would be if its money was used for, say, sprucing up the servery or installing new concepts.

WHERE’S THE VALUE? Some questions to ask yourself before entering into an investment agree-ment:

� Do we really need this improve-ment?

� Will the new facilities outlast the amortization period?

� Is there a less expensive alterna-tive? �

- Tom McDermott of Clarion Group

intend to lose money in the process. Other contractors may be more diplo-matic in their wording, but the intent is much the same.

INCUMBENT MORE GENEROUS Now, a contractor’s proposal is not necessarily its best offer, and the terms of an investment/loan usually can be negotiated to something less onerous. This is especially true in a competitive situation. An incumbent will want to retain your account and may be persuaded to pro-vide funds as the price of an extension of its contract. Usually, it will seek more favorable terms—lower commis-sion or elimination of unprofitable ser-vices—if the amount involved is large.

If you understand your position—how valuable your business is to the contractor and what you can offer in exchange for the investment, you usu-ally will obtain the funds on favorable terms—meaning no interest charges and no concessions that are harmful to your interests. (You may agree to transfer the vending contract and allow some price increases, but can’t agree to reduce operating hours, for example.)

BEWARE THE ‘BUYBACK’ Except when the amount is small, you will not get an investment without a “buyback” agreement. The contractor wants to spread recovery (amortization) of

“Do It Yourself Operator Selection” By: Sherwood D. Spivey, Deputy Director, Phoenix Art Museum

Phoenix Art Museum opened to the public in 1959, but it wasn’t until 1996, in conjunction with a major expansion, that it first opened a restaurant for use by its visitors. So in 1995 I knew that I, as Deputy Director for Operations, was re-sponsible for designing and equipping an efficient, commercial kitchen, deco-rating and finishing a comfortable dining

dining area and introducing a quality foodservice operator, and I had about one year to do it. I spent time doing research that included communicating with many of my counterparts in other museums and with local restaurant owners. What did I learn from this research? That I knew very, very little about the food business, and had no

particular knowledge of how to design and equip a kitchen, or how to deco-rate and furnish a dining room, or how to find a quality foodservice provider. Fortunately, Lee Cohn, a successful Phoenix restaurateur and friend of the Phoenix Art Museum, introduced me to Arthur Manask, a foodservice ex-pert who had years of experience as an (Continue on page 6)

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complete and rewarding without a good consultant. I established my game plan for vendor selection with help again from Arthur Manask. I don’t know about the dynamics at your institutions, but at Phoenix Art Museum it seems that the entire staff, most of the volunteers and trustees,

and a majority of visi-tors take on the charac-teristics of food ex-perts and critics. I was determined not to make this vendor se-lection without allow-ing adequate participa-tion from representa-tives of those groups. Therefore, I appointed a 12-person advisory

committee that was comprised of one other staff member, 5 members from among the leadership of volunteer support organizations, and five trus-tees. The Board President and Mu-seum Director served as ex-officio members. All willingly served on the committee and came with open minds and the enthusiasm to help when needed. The ad hoc Foodservice Committee came to its first meeting armed with materials that I had sent to them in

in preparation for this important meet-ing: a short biography of each member, a history of foodservice at the Museum, financial information such as monthly café sales during the pass three years with a comparison to monthly atten-dance, a brief statement giving the Committee’s objectives and timeline, a copy of the book “The Complete Guide to Foodservice in Cultural Insti-tutions“ and an agenda for the meeting. Committee members came prepared for the selection process. That first meeting was very important and turned out to be extremely success-ful. I had asked Art Manask to lead the meeting and he did so very well. The Committee was able to redefine the Museum’s goals in hiring a foodser-vice vendor, and to do so realistically. Without Art Manask’s broad knowl-edge of the industry and without his familiarity with many successes and failures in cultural cafes and restau-rants, the Committee may never have fully believed that our Museum’s cafe is not positioned to attract huge num-bers of restaurateurs. The big money and consistent profits just are not there. Once this financial objective and other realistic goals were documented, the Committee agreed that the Museum


(Continued from page 5) operator of foodservice facilities in some of the best-known American mu-seums. With the expertise and leader-ship of Arthur Manask, Phoenix Art Museum was able to design, equip, decorate, and furnish the physical facili-ties, and was able to contract with a well-known local res-taurant operator/caterer to run the foodservice operation. Enough history. In April 2002 the Mu-seum and its foodser-vice contractor amica-bly agreed to termi-nate the contract within six months. Why? Well, it was rather complex, but perhaps I will be able to tell that story at another time. Back in April, the situation was this: I had to have a new foodservice operator up and running within six months. At least I wasn’t faced with the major start-up issues that I had experienced six years earlier and I certainly wouldn’t need the services of a consultant this time around. Or would I? Contrary to the title of this article “Do It Yourself Operator Selection”, the selection process could not have been nearly as

““““Do It Yourself Operator SelectionDo It Yourself Operator SelectionDo It Yourself Operator SelectionDo It Yourself Operator Selection””””

Visitor Foodservice Alternatives: Visitor Foodservice Alternatives: Visitor Foodservice Alternatives: Visitor Foodservice Alternatives: Vending Machines 101

“Arthur Manask, is a foodservice expert who had

years of experience as an operator of foodservice

facilities in some of the best-known American museums.”

and services to be sure that prices are not elevated and just returned to you as a donation, rebate, corporate sponsorship, etc. Most Coca-Cola and Pepsi Bottlers are very familiar with these agreements and usually are favorable to doing them, especially at museums of science, natural history, children’s, as well as aquariums, and, as mentioned, most any other venue that is high visibility for their product line.

Dollars & Cents? Vending machine commissions from bottlers or route vending companies normally run about 10% of revenue. It may be less or zero, however, depending, again, on the total revenue generated from your visitors, staff, volunteers, and guests versus their


the bottler may be interested in an ‘exclusive rights agreement’ which will provide for all their product line to be used exclusively at your institution for all foodservices (visitor and special events) in exchange for cash and/or in-kind contributions, corporate sponsorship, marketing, promotion, etc. If you opt for an exclusive rights agreement it is important to review the bottler’s pricing for all products and supplies (cups, etc, if applicable) ‘before’ entering an agreement. Have the pricing reviewed by the caterer(s) that cater the special events at your location and, if applicable the visitor foodservice operator. It is important that the bottler provides ‘market competitive’ pricing for all products

(Continued from page 4) a percentage of some or all of the revenue to the institution. It is best to conduct an RFP (request for proposal) to solicit interest and proposals, carefully and thoroughly check operator references, accounting systems, financial stability, and, importantly, have a well-constructed contract that can be cancelled by your institution if there are serious service and/or quality problems.

Exclusive rights agreement option? When talking to the Pepsi-Cola and Coca-Cola bottlers, if your institution is high profile in the community, has a lot of special events (facility rentals) and/or has a lot of children as visitors,

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(Continued from page 2) tial targets for terrorist strikes. Promi-nent among them: the food supply, a natural delivery vehicle for spreading deadly germs to significant numbers of the population. The government's pre-paredness for such a threat is question-able, say some experts. Perhaps the area of greatest concern is the prospect of an ‘inside job’, terrorism perpetrated by employees who have access to produc-tion areas. (Food Management, 3/2002).

Foodservice is not a museum, zoo or cultural insti-tution’s primary business or service, but a service that touches almost every visitor, staff member and volunteer. Talk to your foodservice manager (and/or operator if the service is outsourced) to be cer-tain your foodservice and catering departments are pro-active in this regard, both internally and with vendors that supply the food and beverages used at your institution.

Salmonella hits Disney World units; 141 sickened and McD worker dies after hepatitis shuts Wisconsin unit. Health officials linked the Disney inci-dent to prepackaged, diced Roma toma-toes served at six of their restaurants, and health officials indicated that no one that ate at the McDonald’s restaurant that was voluntarily closed reported be-coming ill with liver disease symptoms. (Nation’s Restaurant News, 9/2/02).

Tax Exempt Revenue Bond Funds Used for Expansion May Affect Foodservice Contract Terms & Condi-tions. Is part or all of your current or proposed expansion financed by tax-exempt reve-nue bonds? Does any of the expansion include foodservice space that will be operated by an outside contractor? In this circumstance, did you know that if your contract with your foodservice operator does not have certain IRS approved terms and conditions that your institu-tion may run the risk of having the bonds not be tax exempt? If you are not certain if this applies to your institution, we recommend checking with your legal (bond) counsel.

McDonald’s Beefs Up Profile at Washington Museum. McDonald’s is beefing up its profile at the National Air and Space Museum (part of the Smith-

sonian Institutions). When the Wash-ington, D.C. museum announced that the fast-food company would open a 1,000 seat restaurant to replace the museum cafeteria, watchdog groups criticized the decision. As a result, Director John Dailey says, ‘great care’ was taken to make sure the Wright brothers’ 1903 Flyer wouldn’t play second fiddle to a Filet-O-Fish. Per-haps a little too much care, as it turns out. Three months after opening, the restaurant ‘isn’t quite performing to capacity,’ Mr. Dailey says. A possible reason: Nobody can find it. Hidden behind an Apollo-program lunar mod-ule, the entryway to the McDonald’s is marked with a fork and knife; the fa-mous Golden Arches are visible only from inside the restaurant. Not for long. McDonald’s is working on an array of ‘tasteful’ signs to boost traf-fic, Mr. Dailey says. Changes will include ‘familiar corporate signage’ inside and out. The McDonald’s name will be added to museum maps, and a visitor’s center will direct hungry visi-tors to the restaurant, which also serves pizza. Keeping the registers ringing is important to the nation’s busiest museum, which is struggling to

pay for a $311 million ex-pansion. Officials say the deal with McDonald’s will boost its foodservices profit by $10 million over a dec-ade. As for the heat he’s taken about the partnership, Mr. Dailey says: ‘Fries were our biggest seller before McDonald’s opened, and they’re our biggest seller

now.’ (Wall Street Journal, 9/20/02).

[Editor’s Note: If you look at museums and zoos that have McDonald’s around the U.S. you will find the most successful (from a visitor per cap and visitor satisfaction standpoint) institu-tions are generally those that also have other distinct branded and non-branded foodservice choices. Examples include The Field Museum, Children’s Museum-Indianapolis and Cleveland Metroparks Zoo.]

Restaurant Union Launches Cyber-space Attacks on Chain Foes. In connection with the above McDon-ald’s-Smithsonian Institution WSJ arti-cle we noted: The Hotel Employees

and Restaurant Employees Interna-tional Union, or HERE, is brandishing a new weapon—the Internet—in at-tempts to undermine operators with whom the giant foodservice workers’ union is displeased. HERE launched the website www.whosesmithsonian.org in August 2002 to take the non-profit Smithsonian to task for what the union calls a ‘lack of public ac-countability’ in some of its business dealings with companies such as McDonald’s Corp. (Nation’s Restaurant News, 8/19/02)

More on McDonald’s. The 1,000 seat McDonald’s opened in May 2002 at the Smithsonian National Air and Space Museum in Washington, D.C. The Smithsonian was reportedly guar-anteed $16 million over the 10-year span of the contract. To better serve the approximately 9 million tourists who visit the museum each year McDonald’s brought in Boston Mar-ket and Donatos Pizza (owned by McDonald’s) to enhance menu vari-ety with such things as grilled special-ties and salads. According to Vincent Martino, director of special projects for McDonald’s, they are also sched-uled to open a unit at the Dulles Air and Space Museum that is being built at Dulles International Airport just outside Washington. That museum is scheduled to open in December 2003. (Nation’s Restaurant News, 7/15/02)

[Editor’s Note: Assuming McDonald’s is pay-ing rent/commission based on approximately 8% of total revenue, it would appear it is pro-jecting total sales over the 10-year period of about $200 million. This would convert to about $20 million annual sales or per cap spending of about $2.20 assuming about 9 mil-lion annual visitors. Similar family/tourist-oriented museums in the U.S. that have the appropriate ‘mix’ of foodservice to meet visitor needs enjoy per cap spending of $3.00 and more. Besides ‘location’ and ‘access’ within the museum, installing the appropriate ‘mix’ of foodservice concepts (brands) is critical to optimizing per cap spending, which in turn optimizes operator and institution profit/income.]

And Even More on McDonald’s. Activists Protest New Smithsonian Eatery. McDonald’s at Air & Space told to take flying leap. Find-


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CONTRACTOR-OPERATOR TIPS FOR RESPONSIVE & WINNING PROPOSALS

Manask & Associates works with many clients around the U.S. helping with operator selection (RFP) processes. We would like to offer the following recommendations to all operators that will facilitate reading and review of your pro-posals, and likely result in your winning more contracts. The following applies to large, medium and small foodser-vice organizations that respond to RFP’s.

Do: • Respond to all requests; omissions or lack of clarity take too much time back-and-forth and does not place

your company in a favorable light with the client. • Submit your information in the order it was requested. • Be as specific as possible; when referencing other material in your proposal, refer to a page number, not a

whole section. • Include only what is asked for; boilerplate does not help. • Provide the fewest number of pages in your proposal; quality of response is more important than quantity.

Do Not:

• Alter or change submittal forms. • Be sure you check and double-check your numbers; it is amazing how many submittals have simple mathe-

matical errors. • Use a 2-column format for text; 2-column writing is very hard to read and increases the bulk of your submit-

tal. • Include any boilerplate; it is very apparent to clients when an operator has customized their proposal and

when they have not customized their proposal. • Submit 100-200 page proposals when the same information can be submitted in 50 pages.

Consider:

• You are certain the person or persons within your organization that respond to RFP’s have the skills (writing, grammatical, math, spreadsheets, etc.) to provide the highest quality job. • That all of the people compiling the proposal are ‘on the same page’ – using the same financial projections, capital investment figures, etc. • Getting professional help to write and format your responses to RFP’s. If not available internally. • Involving any subcontractors as early as possible, getting all required information, and making sure that your financial projections coincide. Remember, although you are not providing the services, you will usually need to ‘sell’ this subcontractor with as much detail as though you were.

(Continued from page 7) ing some logical disconnect between The Spirit of St. Louis and Big Macs, the Center for the Science in the Public In-terest activist group has called the open-ing of a McDonald’s unit at the Smith-sonian Institution’s National Air & Space Museum in Washington, D.C., ‘inconsistent with its educational mis-sion.’ The group, which has waged jihad against the high-fat/high-calorie offerings of fast food chains for years, called on


the Smithsonian to cancel the 10-year lease deal, which guarantees the Mu-seum $16 million over the contract period. Museum director John Dailey notes that nutrition content was not part of the contract negotiations, and in any case the eatery’s offerings in-clude not only the standard McDon-ald’s fare but more upscale offerings from Donatos Pizzaria and Boston Market (both owned by McDonald’s), including salads and grilled items.

Meanwhile, the Museum’s visitors are expected to vote with their feet and the only suspense is whether the Air & Space McDonald’s will knock the McDonald’s at Walt Disney World in Orlando off its perch as the chain’s busiest unit. A telling sign of the kind of business McDonald’s expects is the size of the dining area, which seats 1,000. (Food Management, 3/02)


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(Continued from page 8) [Editor’s Note: ‘Nutritional content and menu variety are an important part of the operator selection (and contract writing) process for museum restaurants in order to optimize visitor satisfaction and per cap spending. Assuming the 1,000 seats are 85% occupied when busy and assuming the busy lunch-time extends over 3-hours, it would appear that McDonald’s an-ticipates serving about 2,600 lunches on a busy day. With a $5.00 check average that would be about $10,000 sales.]

Celebrating is 110th anniversary, the Modern Art Museum of Fort Worth unveiled its new $65 million building in December after three years of con-struction. At 153,000 square feet, ar-chitect Tadao Ando’s design quadru-ples the museum’s total area. The mu-seum now owns 11 acres of property and includes a new restaurant, café and outdoor terrace. The restaurant, ‘Café Modern’ offers Sunday brunch, daily lunch, including a very creative and contemporary menu by Executive Chef Mathew Freistadt. Restaurant General Manager is James Bernhardt.

The Norton Museum of Art in West Palm Beach, Florida completed its expansion recently. The museum’s expansion includes a restaurant, es-presso café and catering services un-der the management of Lyon & Lyon, a well-known caterer and café opera-tor headquartered in Miami Beach.

Don’t Bother Asking About The Mystery Ingredient. The 62,000 square foot privately owned and de-veloped International Spy Museum opened in Washington, D.C. in 2002. It includes Restaurant Zola, ‘where romance of spying will provide a rich backdrop against which patrons enjoy excellent food, wine and service.’ The Star Restaurant Group (D.C.’s Red Sage, etc. al.) operates Zola, and a companion café that serves more cas-ual meals. Projected yearly atten-dance: 500,000 visitors. (Restaurant Hos-pitality, 4/02)

Cafeteria Coup. Is there hope for museum food? The National Gallery of Art in Washington, D.C., aims to boost restaurant sales by offering spe-cialty dishes tied to its “Goya: Images of Women” show. The offerings in-

clude Spanish cheeses and tortilla espag-nole, a baked omelet….. (Wall Street Jour-nal, 5/3/02).

Cultural Cafes: While feeding their minds, museum visitors can nourish their bodies at on-site restaurants. The Indianapolis Star (9/25/02) provided an extensive write-up about dining at the Indiana State Museum, The Chil-dren’s Museum, Hall of Fame Mu-seum, Indianapolis Museum of Art, Indiana Historical Society, Conner Prairie and the Eiteljorg Museum. Of note is that these institutions have a vari-ety of national and local foodservice op-erators. Further, according to the article, “According to the most recent survey of its members, the American Association of Museums found that in 1999, the fa-cilities responding gained 0.5 percent earned income from foodservice. Among that response group, 12.9 percent said they received some value by provid-ing food at their facility.”

Hot Dogs Make ‘Natural’ Pairing for Museum’s Baseball Exhibit. When the American Museum of Natural History opened its ‘Baseball as America’ exhibit in May 2002, Restaurant Associates used an American sports icon, the hot dog, to tie he exhibit to the museum’s restaurant offerings. The menu included a variety of 10 hot dogs from around the country including the Dodger Dog, Chi-cago Red Hot, Texas Corn Dog and oth-ers.

Art and Appetite. You take mayo with that Monet? Southern Califor-nia’s fine art museums offer delicious dining. (Sunset Magazine, June 2002) This article writes that ‘Good cooking has long been considered an art form. So, as museums seek out innovative ways to attract visitors, it’s not surprising that many of them have opened fine restau-rants to complement their other aesthetic offerings. Southern California stands as a prime example of this phenomenon; with six top art museums now feature sit-down dining rooms that serve excep-tional cuisine at moderate prices. From Los Angeles to San Diego, museum go-ers can experience feasts for the eyes—and the taste buds as well.’ Featured

museums include: Museum of Con-temporary Art in San Diego, Los An-geles County Museum of Art, Hunt-ington Library in San Marino and Bowers Museum of Cultural Art in Santa Ana.

Exclusive Corporate Sponsorship IRS Rules. Does your institution have an exclusive beverage agreement with Coca-Cola or Pepsi-Cola or other cor-porate sponsor? Are you familiar with the latest IRS rules in this regard? The August 2002 AVISO (publication of the AAM) has a very interesting article about the subject with contributions by Marsha S. Shaines, deputy general counsel at the Smithsonian Institutions.

Prehistoric Design for Café at Natu-ral History Museum. The newest res-taurant at the National Museum of Natural History has embraced its theme by adopting an ancient design motif. The 60-seat Fossil Café has an intimate link to the museum, according to Larry Ponzi, general manager for Restaurant Associates, the museum’s foodservice operator. The new café cost $900,000 to build. According to museum curator, Scott Wing, ‘When visitors stop at the café, they can con-tinue to learn while they eat and drink. I don’t know of any place like this in the world’. The café serves 250-300 people a day. (Nation’s Restaurant News, 7/15/02).

CONTRACTOR NEWS

Foodservice Contractors. Following is the 2002 Leading Contract-Management Companies (Restaurants and Institutions, 9/15/02) ranked on total 2001 food and beverage sales in North America. Total sales run from $4.9 billion for number one to $80 million for number sixteen. 1. Sodexho USA 2. Aramark Corporation 3. Compass Group 4. Delaware North Companies 5. HMSHost Corp. 6. Volume Services America 7. Fine Host Corp (now part of Aramark) 8. Bon Appetit Management (part of

Compass Group) 9. HDS Services


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Visitor Foodservice Alternatives: Visitor Foodservice Alternatives: Visitor Foodservice Alternatives: Visitor Foodservice Alternatives: Vending Machines 101

““““Do It Yourself Operator SelectionDo It Yourself Operator SelectionDo It Yourself Operator SelectionDo It Yourself Operator Selection”””” every Committee member on a weekly basis. This was essential in keeping the members informed, involved and prepared them for the finalists’ inter-views. By the August 16 proposal deadline, I had received three great proposals – I could have accepted any of them and lived happily ever after. However, I needed the buy-in from the Committee members, and, frankly, I respected their judgment. I sent copies of the proposals to the members and asked them to prepare for three 45-minute interviews that we would hold back-to-back-to-back (with ½ hour in-tervals). The interviews with the three finalists were held on September 10. The pres-entations, like the proposals, were ex-cellent. The Committee was well-prepared and asked all the important questions. After the interviews, the Committee stayed to discuss the situa-tion. Although the Committee was ad-visory in nature, I asked for a “straw” vote on the candidates. The result was unanimously in favor of the candidate that I, too, had selected. It was a win-win situation. The Museum had made

a selection that was best for the Mu-seum, and the Museum had also estab-lished support of its choice by a group of Museum leaders and volunteers. I met with the selected candidate and negotiated a fair contract. The new vendor is called Arcadia Farms Café at Phoenix Art Museum. A r c a d i a Farms also owns and operates a well-known restaurant and bakery in Scotts-dale, and pro-vides foodser-vice at Desert Botanical Gardens i n Phoenix. It has only been operating at the Museum for six weeks, but has already redecorated the dining area, marketed the location extensively and has boosted sales. Everything is going very well. As far as operator selection is concerned, there is no such thing as “Do It Yourself”. �

- Sherwood D. Spivey

(Continued from page 9) 10. All Season Services 11. Guckenheimer Enterprises 12. Guest Services 13. Five Star Food Service 14. CulinArt 15. Lackmann Culinary Services 16. Culinaire International

Aramark has partnered with Wolf-gang Puck Catering and Events and entered into a new contract at the St. Louis Science Center. The new terms include a complete redo of the visitor foodservice and exclusive catering. Adding new accounts to its portfolio, Lake Success, NY-based CulinArt has formed a separate division and named Lou Vogt Director of Operations. Vogt is credited with four more ven-ues including Westchester Country Club, Cradle of Aviation museum vil-lage Club at Lake Success, and Bryant


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(Continued from page 6) should outsource the café services (don’t run it in-house), and engineered a list of 15 local and national restaurants that Committee members thought would provide the type of quality food and ser-vice that would meet the Museum’s goals and needs. Two others were later added to the list. During the next month or so I called all 15 of the possible vendor candidates to discuss Phoenix Art Museum’s search efforts, and asked each CEO I spoke to if he(she) has any interest in receiving an RFP or at least continuing the dia-logue any further. Most wanted addi-tional information. In that case, I sent them a letter of introduction including some Museum and café history, a café fact sheet, and an outline of information that the vendor should include in a pro-posal (Art Manask had some very help-ful input into the proposal package). This part of the process was not as sim-ple as it may sound. It included many telephone calls, visits from vendors and follow up correspondence. But I kept very good notes of all these and e-mailed updated copies of these notes to


(Continued from page 6) capital investment for the machines, frequency of service, repairs and maintenance, etc. The basis of the commission is determined by the amount of operator capital investment (cost of vending machines) versus total projected annual sales, and, the type of machines and products that will be selling. For example, if you install canned or bottled sodas, water and juices, normally the commission percentage will be less than if you permit installation of a ‘cup soda’ (cold beverages are dispensed in a cup), which generally is more profitable for the operator enabling them to pay a higher commission percentage. If you want to optimize return, consider placing them in a high visibility location with some casual seating. As mentioned, if they are built-in and either customized or color coordinated they do not have to be as

offensive as most. If they are in a highly visible location, and, for example 100,000 visitors per year spend an average of 50 cents ($50,000), this has the potential to return about $5,000. If you rent the cold beverage machines and fill them yourself, then this dollar amount could easily double, or more, ‘not counting’ your cost of labor, storage, inventory, etc. Regarding the exclusive rights agreements mentioned above, if your institution is as described, with about 200,000 annual visitors, an annual cash contribution/donation could amount to $5,000+/-, plus co-operative marketing, loan of concession equipment, if needed and other potential marketing/advertising relationships. �

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I have been a manager in the museum’s self-operated Restaurants and Special Events department for almost 20 years. In addition to acting as one of three directing managers in this department, I am also responsible for the scheduling and rental of all museum facilities; audiovisual services; special music department, and all catering sales functions. Exclusively our in-house department handles all foodservice in and at the museum. The book The Complete Guide to Foodservice in Cultural Institutions is a tremendously important resource for museum professionals that supervise or manage any facet of foodservice in their institution. The book does an excellent job of defining the often-unclear roll of the foodservice operation within a cultural institution, and goes further to offer solutions for the enhancement of that relationship. It also provides a good cross-section of what our industry looks like across the nation, and can help a non-foodservice experienced museum administrator understand more clearly the benefits and challenges of self-management. I found all of the case studies to be interesting and familiar, particularly those involving other self-operated museum foodservices. Many of the issues that we have faced in our own operation, such as the departure of a senior manager, the maintenance of aging equipment, and receiving contradictory messages from senior management regarding mission, are addressed with insight and a clear understanding of the problems and benefits of self-operation. It is comforting to realize that many issues and problems that we have always considered unique to our operation are actually more widespread and have been faced and dealt with by other museums. Our Board of Trustees has recently been debating the respective merits of

Book Review The Complete Guide to Foodservice in Cultural Institutions

By: Catherine E. Turner, Director of Special Events at The Virginia Museum of Fine Arts, Richmond, Virginia

project can be daunting, and the Architectural Program Statement is a terrific organizational tool, which we will use as a template for planning purposes. Additionally, the book discusses quite a few good ideas for sales analysis – I was pleased to discover that I can use more of the statistical information we gather for meaningful analysis. Reading The Complete Guide to Foodservice in Cultural Institutions opened my eyes to the breadth and scope of our industry, which I had previously thought of as fairly narrow. In addition to being well organized the book is also enjoyable to read. The issues and players in the case studies were so familiar that I frequently felt I was reading about my own operation. I would strongly recommend this book to any manager in a self-operated museum foodservice, as well as to museum administrators who are responsible for foodservice operations. I have no doubt that this book will be one of my most valuable resources for future planning. �

co nt inu ing self-operation and contracting with a foodservice management company. The book provides a great deal of well-researched material that, in many cases, supports much of the anecdotal

information we presented to our Finance Committee. Since the senior foodservice managers obviously have an interest in seeing the museum retain an in-house foodser-vice department, it was especially important to be able to use The Complete Guide to Foodservice in Cultural Institutions as an objective resource to support some of the positions and assumptions we presented to the board. Another section of the book that I found very helpful is the chapter containing an Architectural Program Statement for Foodservice Planning. The Virginia Museum of Fine Arts is planning a major building renovation and expansion in the next several years, and that project will involve the demise of current restaurant facilities, and the creation of new ones. Contemplating such a large

HOW TO ORDER

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Cultural Institutions”

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exclusive catering at the Walker Art Center in Min-neapolis when Walker com-pletes its expansion in 2005. WPCE currently operates the foodservices at the Museum of Contemporary Art in Chi-cago and provides catering services to The Field Mu-seum and other cultural insti-tutions in the Los Angeles and Chicago areas. The Art Institute of Chi-cago has selected Bon Appe-tit Management (division of Compass Group) to assume all foodservice operations (long-time self-operated) effective March 1, 2003. EDITOR’S NOTE: No endoresments of companies or service is implied in this column. Editor welcomes contributions to this column and “The Manask Report” from any institution and/or provider of food-services to cultural institutions.]

(Continued from page 10) Park. CulinArt enters its sixth state having recently signed on the Clay Center for the Arts & Sciences in Charleston. The Arkansas Art Center selected ‘Simply Best Ca-tring’ to operate their café in 2002. The Phoenix Art Museum selected ‘Arcadia Farms’ (see related story in this issue of The Manask Report). Sodexho has assumed the foodservice operations at Longwood Gardens (also known as DuPont Gardens) in New York. Wolfgang Puck Catering and Events (in partnership with Aramark) has been selected to operate a sit-down restaurant and self-service café and provide

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