I'm told there is a lot of gossip and criticism by some of me and the Board in relation to the Flag & Whistle. I don't normally want to discuss commercial matters on a blog but sense there is a need for some to have the facts and stop fantasising.
The Board has given notice to the present franchise holder of termination of the franchise at 31 January next.
The present arrangement is based from an agreement in 2006 so it is way overdue for reassessment. From the Railway's perspective it is not a comfortable arrangement in financial terms. The fee the Plc receives is based on turnover such that if it is £70,000 in a year it gets £7,000 and upwards at 10%.
However, the deal makes the Plc responsible for all but operating costs ie the Plc pays for heating, lighting, cooking energy, repair and maintenance, decoration. Council tax, building insurance and renewal of equipment. This frankly means that the Railway makes nothing from the operation of the Flag - indeed it loses money every day it operates. The Board has a duty to react to such situations.
The Board (and I dont take such decisions alone) plans to hold a competitive tender exercise working to a modern specification which will also look at operational style, quality and flexibility to see if we can create a better arrangement. What is wrong with that?
This is nothing personal with the present franchise holder and she has been assured that she is welcome to tender.
To kill the final piece of silliness, the decision was first discussed by the Board 18 months ago and was confirmed at its meeting on 23rd April. This was before the Wartime Weekend and had nothing to do with queues thereat
Some need to appreciate that Directors and Chairmen sometimes have to take hard and difficult decisions. Walk a mile in my shoes.
Malcolm Temple
Atough decision/situation very well explained which shows the benefit of the blog.
ReplyDeleteGraham
I agree with Graham. Presenting the facts and the rationale behind decisions - as soon as possible - is the way to head off gossip, rumour and uninformed criticism. This blog is an ideal vehicle for that. Keep up the good work.
ReplyDeleteMakes sense. I must admit it had never occurred to me that the operation might be franchised.
ReplyDeleteThe missing part of the jigsaw is whether the current franchisee has made a paltry return, or alternatively have been creaming it in because the agreement is stacked in their favour. If the former then there is clearly an issue with providing a facility without recourse to subsidy - something that would appear to draw a parallel with the wider rail industry.
I must stress that there is no criticism of the franchise holder. It was the Plc's decision to let it on the terms I have quoted.
ReplyDeleteIMO a long overdue decision by the plc, and well done for making it. As long as we don't end up with something along the lines of 'Eatright International' as the next incumbent.....
ReplyDeleteIt seems a shame, especially as the cafe has had to endure the tough times over the last few years due to the landslips, then the moment things start to improve the franchise is terminated.
ReplyDeletenot nice
ReplyDeleteIn response to Anonymous above the franchise isn't being terminated as soon as things start to improve. The railway has spent a considerable amount of time and money refurbishing the public and serving counter areas of the building prior to the start of this season and the current franchise holder is in place under the existing contract until the end of this current season. This gives the current franchise holder a full year of operation with better facilities and, we hope, much better visitor numbers. An ideal opportunity to demonstrate what can be done with the business and as mentioned in the original post the opportunity to apply for the new franchise if they so wish.
ReplyDeleteNeil.