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Concession Management Agreement Proposal

The Evans at Canal Shores - "The Shack" Operations

Structure: Management Services Agreement (Not Independent Operation)

Proposed Compensation Structure

Option 1: Performance-Based Commission Model

  • Base Management Fee: $500/month (covers basic operational oversight)
  • Sales Commission: 15-20% of gross sales revenue
  • Benefits:
    • Directly incentivizes sales growth
    • Aligns your success with course profitability
    • Provides predictable base income plus upside potential

Option 2: Tiered Commission Structure

  • First $2,000/month: 25% commission
  • $2,001-$4,000/month: 20% commission
  • Above $4,000/month: 15% commission
  • Benefits:
    • Rewards early success and establishment of customer base
    • Provides higher percentage on initial sales
    • Encourages growth beyond baseline expectations

Option 3: Hybrid Salary + Commission

  • Monthly Salary: $1,200 (split between Jim and Doug)
  • Commission: 10% of gross sales above $3,000/month
  • Benefits:
    • Provides stable income regardless of weather/seasonality
    • Still rewards performance above baseline
    • Lower risk for operators

Operational Framework

Golf Course Responsibilities

  • Licenses & Permits: Maintain health department and any required licenses
  • Insurance: Primary liability coverage for concession operations
  • Utilities: Provide electrical hookup and water access
  • Cash Handling: Daily deposit procedures and POS system (if applicable)
  • Inventory Procurement: Purchase all food and beverage inventory
  • Equipment: Provide basic concession equipment (grill, coolers, etc.)

Management Team Responsibilities (Jim & Doug)

  • Daily Operations: Open/close, food preparation, customer service
  • Inventory Management: Track usage, request restocking, minimize waste
  • Staff Coordination: Manage any additional seasonal help if needed
  • Quality Control: Maintain food safety standards and customer satisfaction
  • Sales Optimization: Suggest menu improvements and promotional opportunities
  • Financial Reporting: Daily sales reports and monthly performance summary

Key Performance Incentives

Sales Targets & Bonuses

  • Monthly Sales Goal: $3,500 (adjust based on season/weather)
  • Quarterly Bonus: $500 for exceeding average monthly target by 15%
  • End-of-Season Bonus: $1,000 for achieving overall seasonal goals
  • Customer Satisfaction: Additional $250 bonus for maintaining positive feedback

Cost Management Incentives

  • Waste Reduction: 2% bonus on food cost savings below 30% of sales
  • Efficiency Improvements: One-time bonuses for operational improvements that reduce costs

Revenue Sharing Examples

Conservative Scenario ($2,500/month average)

  • Option 1: $500 base + (15% × $2,500) = $875/month
  • Option 2: (25% × $2,000) + (20% × $500) = $600/month
  • Option 3: $1,200 salary + $0 commission = $1,200/month

Moderate Scenario ($4,000/month average)

  • Option 1: $500 base + (15% × $4,000) = $1,100/month
  • Option 2: (25% × $2,000) + (20% × $2,000) = $900/month
  • Option 3: $1,200 salary + (10% × $1,000) = $1,300/month

Strong Scenario ($6,000/month average)

  • Option 1: $500 base + (15% × $6,000) = $1,400/month
  • Option 2: (25% × $2,000) + (20% × $2,000) + (15% × $2,000) = $1,200/month
  • Option 3: $1,200 salary + (10% × $3,000) = $1,500/month

Legal & Financial Considerations

Employment Structure

  • Independent Contractors: Issue 1099s for management services
  • Employees: W-2 treatment with benefits consideration
  • Recommendation: Consult with course attorney for optimal structure

Risk Management

  • Equipment Damage: Establish replacement cost responsibilities
  • Inventory Loss: Set reasonable shrinkage expectations (5-8%)
  • Weather/Force Majeure: Adjust compensation during extended closures

Documentation Requirements

  • Daily Sales Reports: Track all transactions
  • Inventory Tracking: Monitor food costs and waste
  • Customer Feedback: Document service quality metrics
  • Financial Reconciliation: Monthly review of performance vs. targets

Seasonal Considerations

Peak Season Adjustments (May-September)

  • Higher commission rates or bonuses during optimal weather
  • Extended hours compensation for busy weekends
  • Tournament/event premium rates

Off-Season Strategy (October-April)

  • Reduced base compensation during closed periods
  • Maintenance and prep work compensation
  • Planning and menu development retainer

Success Metrics

Financial Performance

  • Gross Sales Growth: Month-over-month and year-over-year
  • Cost Management: Food cost percentage and waste reduction
  • Customer Count: Average transactions per day

Operational Excellence

  • Health Department Compliance: Zero violations
  • Customer Satisfaction: Positive feedback scores
  • Efficiency: Service speed and order accuracy

Recommended Starting Structure

For Remainder of 2025 Season:

  • Base Fee: $400/month
  • Commission: 18% of gross sales
  • Performance Bonus: $300 for exceeding $3,000 monthly average
  • Review Period: Monthly adjustments based on performance

For 2026 Full Season:

  • Adjust compensation based on 2025 performance data
  • Consider seasonal rate variations
  • Implement full bonus structure

Next Steps

  1. Legal Review: Have course attorney review proposed structure
  2. Financial Modeling: Project seasonal sales estimates
  3. Contract Development: Formalize management agreement terms
  4. Insurance Verification: Confirm coverage for management operations
  5. Pilot Period: Start with 60-day trial to refine arrangement

This structure allows you to benefit from sales success while operating under the golf course's umbrella, ensuring compliance with park district regulations while creating a mutually beneficial partnership.

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    Concession Management Agreement Proposal | Claude