University Food Service Basics

There are two basic categories of university food service: contracted food service and self-operated food service. While many schools still run their own food service operation, over the last thirty years more and more schools have contracted their food service operation to outside companies.

At self-operated universities, cafeterias and other food service outlets are managed and operated by a university department and the food service staff is employed by the university. At universities that contract food service, in most cases, the staff is employed by the company that operates food services.

The contracted food service segment of higher education is dominated by three multi-national companies: Aramark, Sodexo and Compass. While both Sodexo and Aramark are usually referred to by their company name on college campuses, Compass goes under the brand names of Bon Appetit and Chartwells. Compass is also a partial owner of Thompson Hospitalities. In terms of revenue generated by the top fifty food service management companies, these three companies control nearly 87% of the university contracted food service market. Smaller companies like Parkhurst, Aladdin, Pioneer Catering and AVI, make up the remaining 13%.

At universities with company operated food service there is always a contractual relationship between the university and the company. When universities sign contracts with companies, in many cases the company has a monopoly over food service business on campus, meaning that campus food outlets, such as McDonalds or Starbucks may actually be managed by or subcontracted by the contracted company.

The lengths of contracts vary, but at public universities they are subject to state procurement laws which sometimes delineate a maximum length of the contract's term. Contracts are public information and are often subject to Freedom of Information Act requests. When contracts expire universities often open up the bidding process (and in some states public universities are required to do so).

The bidding process involves issuing a Request for Proposal (RFP)¹‚ an invitation to bid. Companies may then submit closed bids which are opened on a date selected by the university. After reviewing the bids and negotiating with the companies, the university awards the bid to the company of its choosing.

In many cases not only the company but the university (or just the university in the case of self-operated campus food service) aims to profit off of the food service operation on campus.

¹In some cases the bid is termed an Invitation to Negotiate (ITN) or another term. In all cases the concept is similar.