OpinionOpinion
Editor mouths off on Meals for $3
February 4, 2010
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The meals for $3 (MF3) proposal — one of USC presidential candidate Marshall Goldfarb’s platform points — reminds me of my passion for Jessica Biel. It’s nothing more than a fantasy.
Hurdle 1: The Western/USC Lease Agreement
One of the perks of owning a university is the ability to create contracts with exclusivity clauses: charging companies for the exclusive right to market their goods and services on your property.
This is why Centre Spot prices are expensive, why Subway’s “Famous $5 Footlongs” cost $7. It’s also why the Spoke can’t grow beyond its current size and why the University Students’ can’t offer prepared/pre-packaged food for sale.
There are currently exceptions — the atrium yogurt bar is an added USC retail operation Western has temporarily allowed. The same goes for the Spoke’s pre-packaged salads — it’s a grey area of the contract Western has permitted, but is unwilling to allow the USC to expand upon.
So if Goldfarb wishes to offer $3 meals, he needs to account for not being able to make the meals ahead of time, not being allowed to offer soup or more salads, and not being able to run it outside of the Spoke.
Hurdle 2: The Costs
As has been noted, the USC long-term strategic plan “Vision to Lead” puts an emphasis on services over profitability.
Sacha Kumar, USC vice-president finance, noted MF3 would cause financial problems for the Spoke down the line.
“While $3 is great on the service side, it raises questions of long–term potential,” Kumar said. He noted several fixed costs the Spoke faces annually, while questioning whether the proposed numbers have actually been vetted.
“You can’t just sell a sandwich for the same price you bought the ingredients for,” Kumar said. “It’s not that simple.”
Kumar pointed out MF3 would likely not add anything to the Spoke’s bottom line, leaving students to subsidize the operation by taking money from other budget lines.
Hurdle 3: The True Potential
In his feasibility study of MF3, Goldfarb acknowledges the proposal’s only weakness is the service could be too popular. If anything, that should set off a few alarm bells.
Right now, the feasibility study places demand for MF3 at over 1,600 people per week — hundreds of people willing to pay double the price for food they could easily prepare at home.
And that’s the real problem here. These $3 meals are not going to be Subway subs. They’ll be tuna salad slapped on Wonderbread — or something equally bland. In other words, a meal you can still make for a cheaper price at home. The Facebook petition set up supporting this issue is already 2,000 strong, but how many are aware of what meal they’ll be getting?
I can understand backing this — it’s an effective political gimmick which really speaks to the populism inherent in any USC election. But to stand behind it as a financially sustainable proposal stretches the boundaries of logic.
Well Jon, as impressed as I am that you feel I could safely aim for Mila Kunis, I’m still afraid I have to disagree with you.
Yes, you do have the option of using the coffee bar as a location to make sandwiches.
Yes, there is the option of adapting your operation to fit the criteria of the exclusivity clause (though you may run into issues with fresh fruit, prepackaged salads and soups).
Yes, I will even admit I used the phrase “tuna salad slapped on Wonderbread” because I like the way that sentence sounds more than saying “whole wheat loaf from Goldenmill bakery.”
But what you still haven’t addressed and what I think is the more pressing issue here is a lack of realistic goals.
As it stands you put your break-even numbers at 1000 sandwiches a week. You and I both know a lot of the numbers tacked on to the end of your feasibility study aren’t accurate – you admit this in the report. Since many of the people I’ve talked to, Sacha included, have indicated those numbers low-ball a lot of costs, I’m going to assume 1000 sandwiches isn’t going to cut it
So now you have to assume an even higher demand for the product, and while you can point to the number of members on your Facebook petition as indicating such a demand, I’m sure many of those petitioners are speaking to the issue of campus food prices – not a need for a daily source of USC-branded peanut butter and jam.
With that being said, kudos to you and Goldfarb for speaking to an important issue. The price of food on campus is something a lot of students feel strongly about and dialogue is needed.
Now that the campaign is over there isn’t really a need to talk more about this, but if you’d like to feel free to swing by the office – I’d be happy to chat more.
Perhaps Jessica Biel is out of the question, but we would be happy to settle for Mila Kunis.
What was proposed in the feasibility report was a foundation of a business. The great thing about a business solution to a problem is that it can change and adapt to a problem at a much faster pace than a policy solution.
While I couldn’t help but notice that your conversation with Sacha was exactly the same as I had earlier that week with him; you failed to acknowledge in your article that we had more than one option of location. We simply proposed both the yogurt bar and the Spoke Cafe because while we had heard about the legalities the document failed to materialize when we asked for it (several times). Until the document with the specific details showed up, we were gunning for Jessica Biel.
Now that we have to settle for Mila Kunis. In reality this isn’t so bad, we just have to adapt our operations to conform to the exclusivity clause. If premade sandwiches will cause legal tension, than the sandwich must be made in front of the customer.
Mila Kunis does not equal Wonderbread. In the report it clearly states that we used a whole wheat loaf from a brand called Goldenmill Bakery. You’re right, Meals for $3 (MF3) will not provide the same value as a product like a 12 inch toasted assorted sub on italian herb and cheese. While the MF3 product will taste good it should not be compared to subway. The customer of MF3 solely cares about price.
Sure it’s no Jessica Biel, but Mila Kunis is not looking so bad after all.