During conferences, amid meetings or simply in everyday foodservice talk – there always seems to be a discussion centered on the topic of whether foodservice operations would be better off contract managed or self-operated. So, we thought it would be worthwhile to explore this popular debate and see what the different studies show.
Which is the preferred method of management?
How satisfied are operators?
Among long-term care administrators, 83% favored their self-operated process whereas only 50% were satisfied with their contracted operation.
Top motives of contemplating contract management:
- Mismanagement of current operation
- Implement change with qualified foodservice personnel
- Purchase necessary equipment
- Potential to increase purchasing power
- Assistance with recruiting skilled managers
- Access to benchmarking resources for performance evaluation
Major concerns dissuading operators from a contract:
- Quality may be compromised at the expense of profitability
- Perceived loss of operational control and corporate protocol impeding decision making process
- Disruption in organizational culture
- Conversion from a subsidized to a profit/loss method may incur pricing increases
- Income is shared with contractor
- Human resources issue concerning status of foodservice staff
- Predicament of being confined to a contract with an incompatible contractor
- Contractors lack ability to employ various means of service (i.e. – use of student or inmate labor)
- Request for Proposals (RFP) can be deficient in accurately quantifying every operational aspect
- Challenge of compiling past performance data
- Directors could face contractual barriers (i.e. – incorporating locally-grown food into program)
- Foodservice capital investments offered by contractor are not a complementary benefit
- Full repayment of unamortized portion of investment is typically requested by contractor when early termination occurs
- Primary fiduciary responsibility of contractor goes to stockholders, followed by the client
Ways to boost the self-operator’s experience:
There are several resources available to foodservice operators. One option that offers favorable results relative to purchasing power is joining Group Purchasing Organizations (GPO’s). Additionally, regional meetings and industry conferences provide great opportunities for foodservice professionals to network and gain insight on progressive best practices, new concepts, and innovative technology.
Performing a streamlined conversion:
For those foodservice operations that are currently under the management of a contract and are apprehensive of a changeover to self-operation, fear not. The conversion process can be carried out efficiently, especially when facilitated with the guidance of experienced consultants and healthcare foodservice experts.