The Future of SSMU Operations

Current Food Service Tenants• Bamboo bowl –approx. 10% of annual sales

– lease terminated Feb 2015• Bocadillo –approx. 11% of annual sales

– lease ends: June 2015• La Prep –approx. 55% of annual sales

– lease ends: June 2016• Liquid Nutrition –approx. 8% of annual sales

– lease ends: June 2016• Vending Machine –approx. 2% of annual sales

– lease ends: June 2016

Current SSMU-owned Food Services• Gerts (Gertrude’s Corner): approx. $50K in

annual sales (6%)• The Nest: approx. $75K in annual sales (8%)

The Proposal• To remove all or some commercial tenants in

the building and move toward SSMU-run food services within the University Centre

Pros/Cons of Commercial TenantsPros Cons

•Guaranteed rent revenue (approx. $200,000)•Less hands-on management required; plug-and-play business model

•Loss of variety and choice based on student needs or wants•Inflexibility with regards to SSMU-initiatives (e.g. banning water bottles, purchasing local)•Administrative and legal costs (approx. $20K annually)•Cannot prioritize student employment•University has used this against SSMU as a bargaining chip•Loss of “our” space, and the ability to build the SSMU brand

Pros/Cons of SSMU-owned SpacePros Cons•Flexibility and autonomy in food choices offered in the building•Able to prioritize student employment•Economies of scale and purchasing power can be achieved for all operations, improving the financial position of Gerts and the Nest as well•Admin and salary costs can be shared by all operations•Better brand recognition for SSMU operations•Larger ability to create promotional deals to encourage foot traffic on 2nd floor•Possibility of Meal Plan cards becomes feasible (big win!)

•How to generate lost rent revenue•High start-up costs•Higher risk•More managerial oversight from GM, VP FOPS, and Operations Manager

Operational Budget• See excel spreadsheet

Financial Costs and Implications

Legal and Administrative Costs $19K (operating)

Equipment—2nd Floor Remodel $26K (CERF and operating)

Construction and Capital Improvements $44K (CERF)

Total $89K

Option One:• Status Quo; continue to rent space in the

University Centre out to commercial tenants• SRC would remain lunch counter• Still plans to renovate cafeteria space

Option Two:• Move the Nest to the south side of the

cafeteria; close this space off and create seating/study area specifically for the Nest – Could still be bookable space– Foldable wall allows flexibility for things like

Activities Night, 4Floors, etc.– Would rely on kitchen for prep and storage space

Option Three• Move the Nest to the La Prep space when the

lease expires• Cafeteria space remains same square footage• Launch 3 operations in the 2nd floor cafeteria

Moving Forward• Building director continues to terminate leases either as they reach maturity

or as the opportunities becomes available• Deep cleaning of (some) current tenant spaces• Renovation of 2nd floor food area to accommodate shared cahier/payment

model• Operations Management Committee consults students on desired food

options• Ops Com and VP FOPS work with Operations Manager to draft menu,

promote, etc.• Launch new operations as they become ready (Bamboo Bowl space: September 2015,

other tenant space TBD)