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Food & Beverage: The Aramark Era begins

I'm unsure if this is a good thing or not.

Outsourcing means that some of the money that Merlin could have paid to the staff or spent on the product now has to pay for the profits of Aramark instead. It means the quality has to drop to maintain the same price, or the price has to go up to maintain the same quality.

However if Aramark has enough buying power to get quality ingredients at a better price than Merlin then maybe it could work. Company culture could also have an impact in terms of service and brand standards.

Do we know how many other facilities Aramark runs in the UK. I've not really heard of them. If they don't have many UK contracts they might not have the economy of scale.

I agree that Aramark skimming off their profits and having to pay Merlin will either increase prices or decrease quality or both.
Also feels like it takes away control (particularly in the hotels), one of the most complained about things in the hotels mediocrity topic is breakfast. If people are leaving bad reviews on Tripadvisor regarding breakfast it feels like there will be yet another layer for feedback to go through before things (don't) change.
 
Do we know how many other facilities Aramark runs in the UK. I've not really heard of them. If they don't have many UK contracts they might not have the economy of scale.

I agree that Aramark skimming off their profits and having to pay Merlin will either increase prices or decrease quality or both.
Also feels like it takes away control (particularly in the hotels), one of the most complained about things in the hotels mediocrity topic is breakfast. If people are leaving bad reviews on Tripadvisor regarding breakfast it feels like there will be yet another layer for feedback to go through before things (don't) change.

Aramark ran the vending machines at my work and the machines were beyond useless. The card machines would stop work after 1 successful vend for about 10 minutes. So good luck if you wanted a drink and a snack! The coffee machine would regularly drop a cup of hot water or sometimes just an empty cup for £1.20 (yay Amarark merch!) And they sometimes they just wouldn't vend an item. There was a constant van on site maintaining the machines and once they had to cut a giant hole in the machine to access the cash box after the machine completely seized shut.

They've now been replaced by Lavazzi and they just seem to work.

My boss's boss is in charge of the catering and vendors, not had many good words were said about support. I'd go in with low expectations to be pleasantly surprised.

My limited isolated experience isn't great but I'd accept its also not a real world scenario of how they would at AT.
 
How does outsourcing it to Aramark differ to franchising it to McDonalds, Burger King, etc?

Alton Towers had franchised units before but this sounds like it's structured differently. Is there a reason why they haven't just gone back to franchising?
 
How does outsourcing it to Aramark differ to franchising it to McDonalds, Burger King, etc?

Alton Towers had franchised units before but this sounds like it's structured differently. Is there a reason why they haven't just gone back to franchising?
I'm not sure it's franchising though, I think it's more like the HB leisure stalls were Alton Towers builds and maintains them but HB leisure run them in terms of staffing and cash and prizes. I think the same principle will apply in that Aramark will have there own staff and they will buy the food. It does seem a weird structure for Merlin to go for but I presume it's been calculated that in the long run it will save them money.
 
How does outsourcing it to Aramark differ to franchising it to McDonalds, Burger King, etc?

Franchising is where you (or in this case Merlin) pay a business (such as McDonalds) to have a licence to use their brand and sell their products.

Outsourcing is where Merlin pay someone to run their F&B for them. They will set the terms of the outsourcing - so how many units etc and they could specify which types of food or the minimal/maximum quality etc, but it all depends on the detail that is contained within the contract between the two parties.
 
How does outsourcing it to Aramark differ to franchising it to McDonalds, Burger King, etc?

Alton Towers had franchised units before but this sounds like it's structured differently. Is there a reason why they haven't just gone back to franchising?

Franchising and concessions is usually where you have a space you want a business to run their business in, so AT just tell McDonalds to run an outlet and they have quite a bit of freedom.

Whereas outsourcing is paying someone else to manage your brand for you.

I know AT wanted to oursource hotel housekeeping a few years ago (see below article) but was this cancelled?
https://www.stokesentinel.co.uk/news/local-news/alton-towers-outsource-more-200-378282
 
Franchising and concessions is usually where you have a space you want a business to run their business in, so AT just tell McDonalds to run an outlet and they have quite a bit of freedom.

Whereas outsourcing is paying someone else to manage your brand for you.
Let me rephrase the question then - why have Merlin chosen to pay somebody else to run their brand, as opposed to giving McDonalds the keys to some of the units?

Presumably there is some sort of cost saving or higher profit margin with outsourcing that they don't get with franchising?
 
Let me rephrase the question then - why have Merlin chosen to pay somebody else to run their brand, as opposed to giving McDonalds the keys to some of the units?

Presumably there is some sort of cost saving or higher profit margin with outsourcing that they don't get with franchising?

Probably yes they get more money from Aramark than they would with a known brand.

Also I think Merlin see their in-house brands like Burger Kitchen as "valuble" compared to back in 1998 where Tussauds had more to gain by getting high st brands in.
 
Let me rephrase the question then - why have Merlin chosen to pay somebody else to run their brand, as opposed to giving McDonalds the keys to some of the units?

Presumably there is some sort of cost saving or higher profit margin with outsourcing that they don't get with franchising?

The main reason you would go down the franchising route would be if you wanted to use the power of that particular brand to increase your sales. So for example if you thought having McDonalds in the park would push up food sales by £500,000 a season then having to pay McDonalds £100,000 to use their name would be worth it.

But Merlin came to the conclusion a few years back that they didn’t need the likes of the McDonalds name in the parks because guests would be there anyway, and would be buying lunch whether McDonalds name was over the door or not. So they scrapped the franchise model and saved themselves those payments.

They still ran the outlets, recruited and paid the staff, dealt with the admin, HR, health and safety and so on. Now they are outsourcing it, they don’t have any of that to concern themselves with. They get a payment from Aramark and that’s that. So it will probably save them money and be less work for them.
 
They still ran the outlets, recruited and paid the staff, dealt with the admin, HR, health and safety and so on. Now they are outsourcing it, they don’t have any of that to concern themselves with. They get a payment from Aramark and that’s that. So it will probably save them money and be less work for them.
But I think this is a lot more about money than it is guest satisfaction
 
A McDonald's is about as expensive a fast food franchise as you can get. They're extremely strict with their franchisee's. Price is one of them where McDonald's UK have a strict universal pricing strategy. The franchise itself is very expensive and their food is far cheaper than current prices in park and would need to be the same prices as every other McDonald's out in the wilderness. MSA operator Roadchef use McDonald's as a low margin leader because they know the strength of the brand attracts people to their service stations as opposed to their competitors. This is why others choose McDonald's as well, even though it's an expensive franchise and they get lower returns, it's the strength of the brand that make up for it.

You don't really need a strong brand in a theme park as you have a captive audience who can't go anywhere else. Even if Merlin did want a McDonald's or other franchise they would need to run it themselves or still find someone else to run the franchise. I'd imagine there's very little money in that as McDonald would be taking a cut of the cash from franchise fees and supplying the outlets, the franchisee would need to make money out of it leaving pretty much nothing for Merlin, perhaps just rent on the properties or something which would have to be low enough to allow the franchisee to make money out of the outlets
 
I think it's fair to say that this about making more money, although it does feel like a bit of a vote of no confidence in their own staff.
 
I think it's fair to say that this about making more money, although it does feel like a bit of a vote of no confidence in their own staff.
Yes I think it's just a way to save on the staff wage bill and not have to deal with there own staff. Theoretically it should make it easier for merlin as they'll need less administrators.
 
Merlin food, outside of ATH, has been pretty crap in my experience. Not sure how it could get much worse. WRT outlets opening and closing, I think the parks will still have a fair bit of control. This seems more working with Merlin, rather than letting them some units and telling them to do as they please.
 
In the case of the "Brand Partners" [as McDonalds, KFC & Pizza Hut were known] when they arrived at Towers in 1998 - they were bought in on a 10 year deal. Basically Towers rented the units out to the operator in question for 10yrs & they were free to run it as they wished (doubtless with a few contractural restrictions). In the case of the McDonalds units, these were run by McDonalds UK themselves - not a local franchisee.

Certainly the McDonalds units created a lot of complaints, as many of the staff had attitude - and from the guests perspective "it was at Towers, so it's Towers problem", even though this was not actually the case. Towers did intervene a little in about 2001 and encouraged the brand partners not to re-employ certain staff.

The brand partner staff did get Dream Tickets - as they were then, i.e. the free admission tickets to Towers. Towers simply sold them onto the brand partners at whatever they deemed cost price was at the time, for them to pass onto their staff as an incentive.

When the 10yr deal came up for re-negotiation, Towers wanted to crank the rent on the units up through the roof, to a level that even McDonalds found unpalatable, so they walked. We then got Burger King under franchisee Karali, who was prepared to pay the high rent prices and pass that onto the customer. The rest is really history - it's all gone downhill since then on the on-park food front, with Burger King walking and them Merlin having a dabble in the on-park food game themselves, before now deciding to let someone else do it.
 
Gonna throw in a random comment, and say one of my favourite memories of Alton Towers as a kid was the Cred Street McDonalds. Man, what an interior, for a McDonald's it was magical in the eyes of a young kid.
 
In theory the benefit of outsourcing is:

1) You take less risk
2) The outsourcing company is able to get better deals from suppliers as they are buying more to cover all their contracts.

I suspect as well that a company like this will offer different packages with varying levels of quality. So you might not see a major change in food quality (may even improve), but I would imagine it will stay the same as Merlin already have a huge markup on food.
 
I did some research into Aramark;

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https://mcquad.org/2020/09/01/the-c...rsy-aramark-comes-to-campus-community-reacts/

They don't seem like a good company.
 
Just to note, I have moved all of the posts relating to the outsourcing of F&B from the 2021 thread in to a new 2022 thread that can continue to be used as the year progresses.
 
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