concessions at sfomedia.flysfo.com.s3.amazonaws.com/media/sfo/... · terminology • acdbe...
Post on 26-Jul-2020
3 Views
Preview:
TRANSCRIPT
Concessions at SFO
Pathways to Entry for Small Businesses
Learning Objectives
• Understand Options for Operating at SFO
• Understand Concessions Timelines and Processes
• Understand Requirements for Operating at SFO
2
SFO Concessions Program FY 2016-2017
Passengers
• Total Airport Passengers 53,000,000 (approx.)
• Passengers Per Day 145,205
Concessions Program
• Gross Sales (w/o duty free) $368.3 million
• Food & Beverage Sales $241.4 million
• Retail Sales (w/o duty free) $126.9 million
• Duty Free Sales $110.8 million
• Average spending per enplaned passenger $13.71
3
Terminology• ACDBE – Airport Concession Disadvantaged Business Enterprise
• Revenue Development & Management (RDM) – The office that manages the use
and leasing activities of concessionaires and related businesses at SFO.
• Concession – Lease premises at the Airport for retail, food and beverage, and
service operations.
• Joint Venture Partner (JV) – Partnership agreement where partners share in the
capital contribution, control, management and profits based on ownership interest.
• Minimum Investment Amount – Minimum amount of construction costs that a
business must invest prior to beginning operations.
• Minimum Qualification Requirements – Minimum qualifications that a business
must meet in order for its proposal to be responsive.
• Primes – Companies that coordinate concessions through direct leases,
partnerships and licensing agreements with others. 4
Baseline Questions
1. Some leases require no previous operating experience,
therefore SFO is a good place to start your business.
2. After signing a lease agreement, it can take 12 months or more
to begin operating in the concession space.
3. Businesses may submit unsolicited lease proposals at any time
throughout the year.
5
Three Twins Ice Cream
Green Beans Coffee
1300 Fillmore
6
Leases & Other Options for Small Businesses
1. Direct Lease – Sole Proprietor
2. Direct Lease – Joint Venture with Others
3. Direct Lease – Joint Venture with Primes
4. Sub-lease with Primes
5. License Agreements
6. Supplier to Concessions
7. Pop-Ups – 1 Year Term
8. Permit – Six Month Trial
1. Direct Lease - Sole Proprietor
• BENEFITS
Greatest Return
Maximum Control
• CHALLENGES
Responsible for 100% of the Initial Investment
Individual Business Must Meet All Minimum Qualifications
Responsible for 100% of the Operational Costs
8
2. Direct Lease – Joint Venture with Others
• BENEFITS
Shared Control
Shared Initial Investment
Shared Operational Costs – Accounting, Payroll, Bonding
• CHALLENGES
Shared Control
Shared Initial Investment
Shared Operational Costs – Accounting, Payroll, Bonding
9
3. Direct Lease – Joint Venture with Prime
• BENEFITS
Primes Contribute Capital, Reducing Small Business Investment
Primes Contribute Knowledge of Airport Operations
Primes Assist Business to Meet Minimum Qualifications
• CHALLENGES
Agreements May Tie Business to Prime for an Extended Period
Less Control Over Business
10
4. Sub-lease with Prime
• BENEFITS
Greater Control Over Business
Sub-lease May be More Affordable/Manageable
• CHALLENGES
Prime Holds the Lease: Therefore Read Agreements Very Carefully
Sub-lessee Likely Responsible for Build-out and Operational Costs
11
5. License Agreements
• BENEFITS
Income Without Directly Operating Facility
Low (or No) Up Front Cost
Allows Licensee Greater Visibility
• CHALLENGES
Percentage Fee Varies – May Not be Negative If Parties Agree
Business Should Monitor Implementation of Concept
12
6. Supplier to Concessions
• BENEFITS
Income Without Costs Associated with Operating a Concession
Increased Brand Awareness
• CHALLENGES
Tenants Have Control Over Orders – Revenue Fluctuations
Tenants Control Placement and Visual Merchandising
Tenants Control Pricing – High Price May Reduce Demand13
7. Pop Ups – 1 Year Term
• BENEFITS
Turn Key Operation - Low Start Up Cost
Less Expensive to Operate
Ability to Test Concept in Airport Environment
Lower Minimum Qualifications
Exposure May Lead to Future Opportunities – In & Outside of SFO
• CHALLENGES
Very Short Term (1 Year)
Space May Limit Concept and Design
Limited Pop-Up Locations at SFO
14
8. Permits - 6 Month Pilot Projects
• BENEFITS
Lower Upfront Investment
Less Expensive to Operate
Ability to Test New Concept in Airport Environment
Tenant May Terminate Contract with 30-Day Notice
• CHALLENGES
Very Short Term
Testing Phase at SFO – Inability to Predict Outcome
No Guarantee There Will Be a Long Term Lease at the End
Space Limits Concept, Design and Income
Limited Opportunity – Tests Conducted for Untried Concepts Only
15
Basic Differences
Average
Lease Term
Average
Initial Investment
Direct Lease – Sole
Proprietor
Food & Bev. (F&B): 10-12 Years
Retail: 5-7 Years
F & B: $1,000 sq. ft.
Retail: $750 sq. ft.
Direct Lease – Joint
Venture with Others
F & B: 10-12 Years
Retail: 5-7 Years
F & B: $1,000 sq. ft.
Retail: $750 sq. ft.
Typically divided as a percentage
of ownership
Direct Lease – Joint
Venture with Prime
F & B: 10-12 Years
Retail: 5-7 Years
F & B: $1,000 sq. ft.
Retail: $750 sq. ft.
Typically divided as a percentage
of ownership, however
sometimes the JV portion will be
financed by Prime Operator
Pop Up 1 – 2 Years No Minimum Investment
Requirement
Permits/6-Month Trials 6 Months but may be extended to
1 Year
Dependent on Concept
16
Timeline (12 – 18 Months)
• Commission Approves Commencement of RFP
• RFP Released to Public
• Pre-Proposal Conference and Tour
• Question/Response Period
• Commission Approval to Accept Proposals
• Proposals Submitted by Posted Deadline
• Evaluation Panel Review Period
• Commission Approval to Award Contract
• Board of Supervisors Approval to Award Contract (if required)
• Design Review and Permit Issued by BICE
• Build Out and Opening of Operations
17
Path to Prepare for Opportunities
• Register with RDM/Concessions to Receive Updates
http://www.flysfo.com/request-business-opportunity-notifications
• Pre-proposal Conferences – Attend to increase awareness.
• Evaluate Your Business – Determine what can you provide, what
investment level your business can afford, what may be lacking.
Ensure your business (or team) meets Minimum Qualifications.
• Do Your Homework – Develop your vision and concepts before
proposal opportunities arise.
• ACDBE Certification – Increase visibility by becoming certified as
Airport Concession Disadvantaged Business Enterprise (ACDBE). 18
ACDBE & DBE Certification
DEFINITION: A Disadvantaged Business Enterprise is a for profit
business concern:
• 1) That is at least 51 percent owned by one or more individuals
who are both socially and economically disadvantaged;
• 2) Whose management and daily business operations are
controlled by one or more socially and economically
disadvantaged individuals who own it.
• PURPOSE: ACDBE and DBE certification is used ensure non-
discrimination in the award/administration of leases and contracts.
• WHAT: Certification is a review process to ensure a small
business is owned, controlled, and operated by the applicants. 19
Review of Baseline Questions
1. Some leases require no previous operating experience,
therefore SFO is a good place to start your business.
(True/False)
2. After signing a lease agreement, it can take 12 months or more
to begin operating in the concession space. (True/False)
3. Businesses may submit unsolicited lease proposals at any time
throughout the year. (True/False)
20
Useful Links:
Register for SFO Concessions Interested Parties List
http://www.flysfo.com/request-business-opportunity-notifications
View Current Opportunities at SFO
http://www.flysfo.com/business-at-sfo/current-opportunities
Download ACDBE/DBE Application
ACDBE Application and Supplemental Questionnaire: http://www.caltrans.ca.gov/hq/bep/business_forms.htm
ACDBE/DBE Certification Contacts and Instructions
http://californiaucp.org/ or contact Kamal Hubbard at SFO, Kamal.Hubbard@flysfo.com or (650) 821-5142.
21
Questions and Comments
Thank You!
22
top related