Page 15 - GBC winter 2016 Eng

CONCLuSION
Based on the previous discussion, the following observations can be made (as per discussions with General Managers):
1. Although the opportunity to improve operating perfor- mance is significant and the lease may allow dues to not increase, the risk of not controlling member service may be too great.
2. When General Managers were asked about the above scenario, nearly all stated that they would like to control the food and beverage operation unless the Club was in financial peril. The General Managers believed that maintaining operating flexibility was key to a successful operation.
3.Some General Managers stated that this scenario may be attractive to a number of Board of Directors and that the reputation of the lessee would have signi- ficant influence on the decision; however, most General Managers agreed that a private club is an emotional operation and as such, a lessee will have difficulty operating in this environment.
OPERATOR EXPERIENCES
Based upon interviews with owners and operators across the country, there were mixed reviews concerning leasing versus operating the food and beverage functions.
Some individuals had experience at both operating with a lessee and subsequently taking back the operation. Others have had a lease arrangement for over five years and believed the arrangement was far better than their previous experience with operating the food and beverage function. However, the following observations were common among all individuals interviewed:
1. In all cases the financial impact to operations was the deciding reason for making a change.
2. The selection of the lessee was key to success. The lessee must have ‘skin in the game’ – he or she is rewarded based upon performance and more importantly, should have a reputation to maintain in the town/city. It is important that the lessee be hands-on and ensure staff, pricing and food quality are meeting patrons’ expectations. Do not enter into a lease arrangement without a proven operator.
3. If possible the lease needs to outline service expectations in detail with a termination clause for non-performance. “The devil is in the detail.”
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