Running municipal foodservice

[FineBaker]

About 20-25 minutes away from me is a town with a municipal building that houses the town bureaucracy (about 80 people) the town's library (about 15 people spread over multiple shifts), the police department (about 20 people, but they also have their own entrance too) and town court (about 10 people) plus people visiting this complex.
Near the main entrance is a cafeteria with about seating for 30. At the lunch counter there is the basic countertop fryer, countertop griddle, prep table with refrigeration, countertop convection oven, microwave, a display refrigerator and a household freezer. Some 110 volt, some 208 volt appliances.
The operator's lease is up and he doesn't want to stay. The rent is $400 a 4 week period (13 payments a year) plus utilities. From what I've been told, the gross sales were $45k for the prior year. The prices are low, typical sandwich is $2.50-3.00. A 12 oz coffee is 75¢. The town insists on approving the menu and the prices. The menu is bland and prices are a little too low if you ask me. What really hurts is the bulk of one's business will obviously be civil servants, who MUST get a 10% discount.
As part of the deal the vendor must clean the dining area.
I don't know if I'm interested in being so restricted. I don't want to work for $20-25k (if I'm lucky?) a year at a full time job after hiring helpers, who wouldn't be town employees and wouldn't get town benefits.
Would you touch this one? My guess is I will attempt to re-negotiate the terms. The current tenant is done on Sunday, August 30. I don't even think that is enough time to prepare to take over... They started advertising the contract just this week. While I could have my own business with very little up front costs and an established clientel, I don't know if this is the way I want to get started with my own business.

[kuan]

The math works out bad for you. It would be different if you got the vending concessions as well.

Assuming you actually gross 47k a year, you will only be doing $180/day. I'm not counting holidays. That's good news, you only need to do $180/day to do 47k. Bad news is you're only doing $180/day. Your building census is about 90 so you have to sell something worth $4 to half of them each day.

Seems unrealistic unless there is nothing else around. I mean nothing, no coffeeshop, no gas station coffee, nothing.

But also find out if there is potential for future growth in this town. Fact is you have unlimited usage of a kitchen which you can use for catering and other things. Would you take it if there were 160 people in townhall?

Kuan

[FineBaker]

I figured it did. They are about a mile from a gas station/convenience store. The current tenant is not open weekends and evenings, missing out a lot of library patrons and court people. Perhaps before a Town Board meeting John Q. Public needs to sit and have a coffee before giving the town council a piece of his mind?
This building is used for everything. There's a community room used by senior citizens. My credit union holds their annual meeting in this room. Many other things happen there. My thought is if I have the contract for the food concession, then I'm protected from others bringing food from the outside from professional sources, but I know this not to be the case.
Beyond this property is a second lot, less than .2 miles away, it is a park and ride commuter lot. It is also a limited bus rider parking lot. It has 1 bus into a major city in the morning and home in the evening on weekdays. There is a station elsewhere that has 2-6 buses per day at a variety of hours. I know there is a roach coach at that lot because my current job supplies him with rolls and bagels. I'd want him off the property too. Perhaps put my own concession out there.
Right now the purpose seems for the bureaucrats to get a cheap and convienient meal. They collect some serious rent and I feel that should entitle me to make a fair amount of money, not minimum wage. If they hired a staff and ran it themselves, with government benefits and wages, I bet they'd actually lose money running it the way they do now, instead of making money off of it.

[kuan]

I wouldn't even think about it unless it did 120k in sales. Maybe not the first year, or second. By the third year it needs to do 120k or I'd abandon it. It needs to show promise. Small towns are generally bad places to do business because they tend to disappear off the map. Where are you? If you're on the great plains then forget about it. Drop it immediately.

Maybe if you can work in the annual hog roast and other official functions it might be worth it.

Man... 47k.

[FineBaker]

I'd hate to say. The place is an outer suburb (in a way) of NYC. Perhaps a bit beyond the outer suburbs...
My guess is the current operator is there about 8:30-4:30, putting in his 40 hour week. If I did the same, plus stayed open until 7:00 for the library/court/town board meetings that's an extra 12.5 hours a week for probably another $40 a week in sales. The library is open Saturdays from 10-4. Their Sunday hours are few and seasonal. We're into nearly 60 hours a week. If I was over $60k in sales, that would be a shocker.
If I pay someone who could actually make a grilled cheese sandwich I got to pay him or her probably $7 an hour or more. That's 20% off the top for a part-timer who will give out too much free food. It gets easier and easier to see this is a sucker's bet. I understand why this building opened in 2000 and has already had several foodservice operators come and go. While I'm sure they will say no, my offer is no rent, no competitors on the property, no town employee discounts. I get to make the menu and the prices. If the tax collector wants $1.25 hot dogs and the town supervisor wants a 75¢ cup of coffee, let them go to the convenience store!
I'd like to own my own business. This probably isn't the one.

[kuan]

Listen, 60k? That's in sales. Are you single or DINK? (dual-income-no-kids)

You really should check on growth possibilities in that town. If currently they're offering a moratorium on property taxes and people start building $400,000 homes right there you never know what might happen.

Hehe... I had to chuckle when you said "Perhaps a bit beyond the outer suburbs." Just say it. It's podunk. It's OK. Nobody knows who you really are.