Drexel University terminated its contract with SodexoMagic Sept. 20. Effective Dec. 10, 2016, the company will no longer manage Drexel Dining and its subsidiary food services. This contract termination ends a 21-year partnership.
SodexoMagic currently provides food service for the Handschumacher Dining Center, Urban Eatery, ThirtyOne41, Northside Dining Terrace, which features Chick-Fil-A, Subway and SUSHI as well as Starbucks at Gerri C. LeBow Hall. The University Club, Chestnut Street Caterers and Drexel’s Queen Lane Cafe are also operated by SodexoMagic.
“Drexel has terminated its contract with SodexoMagic effective at the end of the fall 2016 academic term and expects to announce a new food service provider in the near future,” Rita LaRue, vice president of campus services, said in an email correspondence.
The Teamsters Union Local No. 115 informed SodexoMagic employees Sept. 22 that Drexel terminated its contract with SodexoMagic, according to documentation from an anonymous source. The documents indicate that the union will attempt to secure employment for the approximately 250 current workers at the company Drexel chooses to replace SodexoMagic. However, this outcome is not guaranteed. The replacement company is unknown to The Triangle, the current SodexoMagic employees and the Teamsters Union Local No. 115.
“Because Drexel is not the employer of these individuals, we cannot comment on the terms and conditions of future employment. For the employees [who] are represented by Local No. 115, as soon as a new food service partner is selected, Local No. 115 will be notified of the company as well as supplied with contact information for a senior member of the company’s labor relations team,” LaRue said.
According to Robert Freiling Jr., recording secretary and business agent of the the Teamsters Union Local No. 115, a local food service company may be the replacement.
“We have heard rumors that Aramark will be the successor but this has not been communicated officially,” Freiling said in an email correspondence.
“[Teamsters Union] Local 115 asked the University to assure that the new contractor would retain all the current Sodexo employees. The University has declined to do so,” Freiling continued. “No Sodexo employees, bargaining unit or management, are being retained to my knowledge.”
The reasons for the contract termination have not been determined.
“The University is making this transition because it believes that the University and its students will be best served by this change,” LaRue said.
In an attempt to increase retention rates and to ensure that Drexel is the right fit for accepted students, the university’s incoming freshman class size has cumulatively decreased by about 600 students over the last two academic years, which is estimated to have reduced revenues by up to $1.8 million for the 2015-2016 academic year and the fall term of 2016. An anonymous source at SodexoMagic has suggested that the contract termination may be related to the company’s reduced revenues stemming from smaller freshman classes.
LaRue said that Drexel had an operating surplus of $72.4 million in the 2015 fiscal year. LaRue also noted that Drexel received strong ratings in July due to their consistent operating surpluses and growth in financial resources.
According to LaRue, the contract termination is not related to the reduced hours at the Hans or the closings of Currito, Seasons, Vegetate and Market 16 & Noodle Bar.
“The retail dining locations were evaluated based on sales volume, number of transactions, student feedback and market compatibility,” LaRue explained.
“The reduced hours at the Hans Dining Center are a result of moving all-you-care-to-eat breakfast to the Urban Eatery,” she continued.
Likewise, Market 16 & Noodle Bar was closed due to low sales. A proposal process will determine future use of the space.
Currito was replaced by SUSHI because Currito’s brand license expired and the incoming Chipotle on Lancaster Avenue is expected to capture the Mexican food market on campus.
No explanation was provided for the closing of Vegetate or Seasons. The Vegetate brand will continue at campus dining locations, but Vegetate’s former location now houses “Tech Lounge on the Square”, a collaborative technological support space operated by the Office of Information Resources and Technology.
“Seasons is slated to continue to be a retail location, with opportunities for experiential learning similar to the Saxbys,” LaRue said.
Update October 7, 2016: SodexoMagic has filed a lawsuit against Drexel University that claims the University fraudulently represented its predicted student enrollment numbers before the food services company signed a contract in May 2015. See this article for more.
The Triangle will continue to update this story as more information becomes available.