11/22/20 Aramark Update, Union Basement

The Union basement where Urban Market use to be has been gutted in preparation for new restaurants. 

The next two decades will see millions pass from Aramark to Purdue, both in the form of one-time payments and recurring commissions. The contract also includes costly punishments if Aramark doesn’t reach certain goals.

For retail-dining facility renovations, signage and purchases and installation of dining services equipment, Aramark made a financial commitment of $15,292,000 over 20 years to Purdue. The University will still hold title to all of that equipment, though, according to the contract.

Additionally, Aramark agreed to provide Purdue half a million dollars every year, starting the fifth year of their partnership, to be used for periodic upgrades to food service facilities. Aramark will manage those funds in consultation with Purdue, the contract states, to refurbish the facilities periodically.

Aramark also agreed to give Purdue an extra $10 million “in consideration of Purdue’s agreement to enter” into a contract over the next 20 years. These funds are categorized as an “unrestricted grant” from Aramark to Purdue, to be paid over the course of 20 years in three installments.

Aramark’s financial offer to Purdue also includes money earmarked for Purdue’s hospitality and tourism management programs.

On July 1 every year, Aramark will pay $30,000 to the “Purdue Hospitality and Tourism Management team,” according to the contract. After the first five years, those funds will increase by 5% every fifth year.

Also during the first five years, Aramark will invest $150,000 in improving technology used in its retail dining operations, that amount will increase by 5% per year after the first five years, according to the contract.

On top of all this, Aramark has promised a guaranteed minimum commission to the University of $1.8 million for the first operating year. After that, Purdue is promised at least $2 million per year, which is set to increase to account for inflation every year thereafter. Aramark will pay Purdue a set commission of 7% of Aramark’s gross receipts, plus 20% of meal-exchange sales through Purdue’s on-campus dining program — meal swipes — plus 10% of meal-exchange sales through Aramark’s separate meal-exchange program.

The contract also includes some costly punishments for Aramark if it receives inadequate feedback from customers.

The contract states that each year Aramark doesn’t maintain an 80% score on the annual “Your Voice Counts” customer-satisfaction survey, the company must donate $25,000 to a Purdue scholarship fund. Likewise, if Aramark fails to submit regular reports to Purdue at the agreed-upon frequencies, Aramark must donate $5,000 to a Purdue scholarship fund.

There’s many thousands of dollars at stake here for both Purdue and Aramark. If either the company or Purdue ends its agreement early out of convenience, it will owe Purdue thousands more dollars.

If terminated in the first two to five years, Aramark will pay Purdue $1.5 million. If Aramark ends its contract between the sixth to 10th year, it will owe Purdue $900,000, and half that if ended in the following 10-year period.

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