THE CLUB CATERING CLOCK: TO CONTRACT OR NOT TO CONTRACT
Written by Victor Hamit

It has been an interesting Summer and some comments from Sydney colleagues and Club Executive Chef, Mick Fry, reminded me of the caution required when clubs enter into catering arrangements. From time to time, many clubs have wrestled with catering and whether to run the catering operation themselves or simply to contract out the operation. The answer to that question differs from club to club and from time to time at any particular club. We also take a light hearted look at the Club Catering Clock to start the year.

Firstly, caution must be exercised that the Club in its arrangements with a Catering Contractor, does not lease or sub-lease, for the purposes of the Liquor Control Reform Act (Vic), part of the licensed premises without the consent of the Director. To do so is a breach of the Liquor Control Reform Act.

Some Catering Agreements are described as licences when prepared. In some cases the Courts have found licences to constitute a lease, and therefore problems can arise for Clubs under the Liquor Licensing Laws. Accordingly, a Club should carefully consider that its Catering Contract is in fact a contract for the provision of food services and not a lease.

On a lighter note, I thought it might be interesting to revisit the Club Catering Clock and allow readers to determine if the Club Catering Clock applies to them and, if so, what time zone is their Club currently in?

In Sector 1 the Club has been dissatisfied by ongoing problems with catering staff, chefs and meal quality, and decides to remove its headaches to a Catering Contractor. The Club believes it has the advantage of someone else having the responsibility for staff and meal quality. The Club believes that it will no longer suffer a loss in catering and therefore be better off financially.

The Club appoints a Catering Contractor and things start off swimmingly with great optimism for the future and Members are responding enthusiastically to the change.

In Sector 2, whilst things started well, prices have gone up. There is a Member undercurrent that despite prices increasing, meal quality and variety have decreased. Members note a new BMW in the Catering Contractor’s dedicated car park. The undercurrent swells into a tidal wave of Member dissatisfaction. The Catering Contractor “is not around as much as he used to be”, “why doesn’t the Club run the kitchen and keep the profits for the Members?”, “why doesn’t the Club run the kitchen and reduce the prices to Members!”. The Board reacts and terminates or does not renew the Catering Contract.

In Sector 3, the Club appoints an enthusiastic young executive chef to run the catering operations on behalf of the Club. The Board receives warm congratulations from Members that meal quality, variety and service “have never been better”, although “it’s not cheap”.

The Board is pleased with the decision to change and how well things have gone. The enthusiastic young chef asks for a substantial pay rise. The Board reluctantly agrees. An undercurrent amongst Members starts that prices are up. The enthusiastic young chef resigns to travel through Europe.

In Sector 4, since the departure of the enthusiastic young chef, there has been a succession of chefs, high staff turnover and industrial disputes. The Club’s Manager and Board devote most of their time to catering. Catering losses are rising rapidly. The Member undercurrent swells to a tidal wave of dissatisfaction. “Why doesn’t the Board get a good Catering Manager who will have the incentive to keep Members happy and keep the prices down?”.

The Board advertises for a Catering Manager and moves back to Sector 1 on the Catering Clock.

The Club decides it must try and stay in its most preferred Sector for as long as possible and stay in its least preferred Sector for as little as possible. But one thing is certain, the Catering Clock never stops!

Article Published: Club Connect – February 2012

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Victor Hamit
Wentworth Lawyers
Level 40,
140 William Street
MELBOURNE VIC 3000

Email: vhamit@wentworthlawyers.com.au
Website: www.wentworthlawyers.com.au

Tel: +61 3 9607 8380
Mobile: +61 408 590 706

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