Dear Member

Proposal to take over the running of the Bar, Catering and week-day cleaning

In my earlier e-mail to you, I promised to send you some further details about this proposal received from the Raca family (the Contractor), and the implications for the Club.

Over the past four years, the Bar & Catering has had the following financial results:

Financial Year ending:	2006	2007	2008	2009
Gross profit (excluding wages):	£8,293	£6,007	£8,728	£13,921
less Wages:	8,963	7,689	8,632	10,130
Net Profit:	-670	-1,682	96	3,791

On balance, it has roughly broken even, but the results fluctuate significantly. Probably the biggest contributing factor is the number of successful social events, coupled with the deregistration from VAT in 2009.

Whilst the cost of the week-day cleaning to the Club is not identified in the accounts, this will be about £5,200 for the 09/10 year. At the moment, this is done first thing each day. One of the advantages of handing over the Bar/Catering and Cleaning as a package is that the Contractor envisages the Cleaning could be done in slack times by the Bar/Catering staff. One of the advantages for us is that the cleaning could be done more than once a day, for example after major coaching sessions before adult members come down in the evening.

I have tried to answer below many questions that have been raised by members. Some of the answers are not precise, either due to reasons of commercial confidentiality or because we decided it was inappropriate to get to that level of detail before the EGM.

Would there be a formal contract between the Club and the Contractor?

Yes. We have already had one meeting with a specialist employment lawyer, and we plan to get the contract drawn up by such a firm. One critical matter to be covered by the contract is events of Termination from either side.

What would be the term of the contract?

Probably the initial term would be for two years, but either party would have the right to terminate the contract given adequate notice.

Would the opening hours remain the same?

No. The Contractor has stated his intention to increase them, in particular on a Friday evening and over the weekends.

Who would be responsible for the existing stock and equipment?

It is envisaged that we would sell this to the Contractor, and buy back at termination. The Contractor would be responsible for any repairs, and may also supply new equipment at his expense.

Would this require a change of licence?

Yes. Currently the Club uses a Club Licence, which does not allow third-party operating for profit. Because of the lengthy application time, we have already applied for a Premises Licence in the Club’s name. In passing, we have also applied for longer opening hours, which, if granted, would obviate the necessity of applying for Temporary Event Notices when we run social events. Our application may of course be refused, in which case this proposal falls away.

What is the impact on the Club’s insurance covers?

Initial investigation has shown that there will be no significant impact on the club’s insurance policy, but we need to confirm this relative to the Contractor’s policies. There may even be some savings due to the premium we pay for our stock and cash cover reducing.

Would there be constraints over price rises?

Yes. These would be broadly linked to RPI, as they are currently.

Would there be some form of profit sharing?

Yes, but to be negotiated. It has already been agreed, as an up-front condition of considering the proposal, that the Contractor must keep full accounts, and that the Club must have full and regular access to them.

What would happen to non-bar items, such as subscriptions, balls, grips, tournament fees, floodlighting fees, visitor fees, and so on?

The Club will continue to deal with these on its own account. A separate till would be placed behind the bar for these items. The Contractor would be trained in taking monies and records of such items. We would like to expand the range of these items to, for example, racquets, clothing, trainers, but that is subject to separate discussions.

What would happen if there is no member of the management team or head coach available?

Again, we envisage training the Contractor to handle phone-calls, membership enquiries, and so on (very much as it happens at the moment).

What will happen to the bar store room?

This will be tidied up. Bar and catering-related items would be stored on one side, and non-bar items stored on the other side (pretty much as it is at the moment). The key board would remain, but sorted out!!

What will happen to the drink vending machines?

It is likely that these will be removed, thus saving the Club some money, and replaced by a bag rack as before.

Will the bar close before all members have left?

No. Subject to the licensing hours, the Contractor will remain on site until the last member has left, and will then be responsible for closing and securing the clubhouse.

Why are we holding an EGM?

In part, because of the required change in the rules – see below. But also because contracting out the Bar is a significant change in the operations of the Club, and we thought it important to provide a forum for the members to discuss the proposal.

Why do we need to change the rules?

Because Rule 62(f) states that the Bar cannot be run for profit by a third-party. Hence, we are seeking the approval of members to rescind this Rule.

Current rule 62(f)

“No person shall at any time be entitled to receive at the expense of the Club or of any member any commission percentage or similar payment on or with reference to the purchase of intoxicating liquor by the Club nor shall any person either directly or indirectly derive any pecuniary benefit from the supply of intoxicating liquor by or on behalf of the Club to Members or their guests, apart from any benefit accruing to the Club as a whole and apart also from any benefit which a person derives indirectly by reason of the supply giving rise or contributing to a general gain from the carrying on of the Club.”

I think that we would all agree that the bar and catering services could be improved. We, on the Committee, believe that this would only change substantially if we could incentivise somebody to take over their running. Currently we are forbidden to do that by the above rule.

We have already seen improvements in the catering since the Contractor took over, and we anticipate similar improvements if he is permitted to take over the bar as well. We think this proposal would be beneficial for the club and its members, and hope that you will support the proposal at the EGM on Wednesday 3 March.

Kind regards

Richard Flavell

Chairman