Exclusive Concession Contracts example essay topic
325 words
With inadequate education budgets across the nation, school systems are looking for additional sources of revenue and corporate America is looking to capture the "kids" market. Children and teenagers spend $74 billion a year and influence billions more in family spending. Almost every large corporation sponsors some type of in-school marketing program. These marketing programs include, but are not limited to, exclusive concession contracts. Nearly 40 percent of schools begin their day with current events and commercials seen on Channel One, school buses may be plastered with advertisements for Burger King or Wendy's, and book covers and planners are covered with ads for Kellogg's Pop Tarts and Fox TV personalities. The fastest growing commercial area in our schools is exclusive vendor agreements with beverages suppliers (i.e. Coke, Pepsi, Dr. Pepper).
According to Alex Molnar's "Cashing In Our Kids" report, Pepsi alone reports signing close to 1,000 agreements with school systems and individual schools. When exclusive contracts are handled properly the school system can earn $10, $20 or even $50 per student plus a percentage of the profits, depending on the contract terms. However, consequences of exclusive contracts can be harsh when the terms are not fully understood or thought through. Often vendors will bypass the local school board and go directly to the principal. The vendor will negotiate with the principal and perhaps offer a scoreboard in exchange for exclusive concession rights. This is problematic for several reasons: 1) the individual school has entered into an exclusive agreement that could potentially bind the entire school system; 2) the local school board is not afforded the opportunity to approve the contract; and 3) the agreement quite possibly is illegal because principals do not have statutory authority to contract and such agreements must be bid under Alabama law.
Additionally, the school system has the potential for developing a contract that could benefit the entire system.
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