Chartwells & YOU:

Inside Southeast’s relationship with a multi-billion-dollar company.

Benji Arrigo

HCAM Senator for Student Government

Southeast Missouri State University

February 11th, 2022

Contents
Introduction ............................................................................................................................................................................... 3
Meal Plan Changes................................................................................................................................................................... 3
Definitions .................................................................................................................................................................................. 3
Who/What/Why Chartwells?............................................................................................................................................. 4
Corporate Structure of Chartwells ................................................................................................................................... 4
Show-Me the Profits ............................................................................................................................................................... 5
Conclusion - But Who Am I? ................................................................................................................................................ 6
Additional Reading ................................................................................................................................................................. 7
The Rising Cost of College ............................................................................................................................................... 7
A Compromise Available.................................................................................................................................................. 7
Chartwell’s Positioning .................................................................................................................................................... 7
Inaccessibility ....................................................................................................................................................................... 8
How We Got Here ............................................................................................................................................................... 8
References .................................................................................................................................................................................. 9
Introduction
Big changes are coming to the Southeast meal plan, as outlined by members of Chartwells at
a recent Student Government Association meeting on February 7th, 2022.1 Chartwells is proposing
these changes and promoting them as centered around student choice, flexibility, and “BIG
portions.” At first glance the plan sounds amazing, with renovations abound and new things on the
horizon. But what motivates a company to make such changes? And why does it mean you might
not be able to use meals at Starbucks anymore?

This document serves to roughly outline the changes being made, and to inform the student
body and other stakeholders in our community about the possible motivation behind such claims.
This document will explore the new meal plan, why we have Chartwells, what and who Chartwells
is, and how profits come into play. While reading, please keep in mind that Chartwells is a for-profit
corporation.

Meal Plan Changes

Author’s Note: Although I originally planned to write this entire section myself, I felt the Arrow
provided a good description of the changes being made. You can find their article by clicking here.2
The link in the introduction includes the livestream of Chartwell’s presentation. Below is a short
summary I wrote on the changes being made.

Essentially, block meals are replacing the current buffet style system. You swipe your meal
and get a ticket, and that ticket is redeemable for a full meal at a “branded” stall, much like buying a
meal at a mall food court. You get the full meal from one stand, entrée, side, and drink.

Everywhere except Towers, St. Vincent’s, and Houck’s Place will be flex-only. That includes
the University Center, Starbucks, Subway, and more. No more using meals at Starbucks or Subway.
The new plan also includes a modest increase in the amount of Flex available, encouraging students
to spend more cash out-of-pocket.

Definitions
RFP – Request for Proposals, a process used at many universities to make large purchases.

Revenue – The amount of money a company took in before expenses.

Profit – The amount of money the company made after expenses.

Subsidiary – Business owned by another business.

Publicly Traded – The public can buy shares in this company via a stock exchange.

1 (Southeast Arrow, 2022)

2 (Abanathie, 2022)
Who/What/Why Chartwells?
It cannot be denied that the relationship between the University and Chartwells is positive.
Chartwells helps employ hundreds, has a Union present, and spends tens of millions on campus
renovations. They reach out and are involved in the community. Two Southeast graduates even
head the operations here on campus. On paper, their company has an impressive track record and a
modern presentation. As stated in the beginning, however, please keep in mind that Chartwells is a
for-profit corporation. More on this later.

When Southeast Missouri State University looks to make a large purchase, they often choose
a process involving an RFP or Request for Proposals. Software and infrastructure like Canvas, the
school website, scheduling systems, and dining services like Chartwells have all gone through the
RFP process. The school asks for proposals, and potential contractors submit a publicly accessible
document.

Chartwells is far more than just a small catering service handling your meals on campus.
Instead of a naturally flowing river, the University uses Chartwells like a series of locks, dams, and
canals. One might think that money flows to like this: You >pay> University >pays> Chartwells. But
you’re missing an important final step: You >pay> University >pays> Chartwells >pays> University.

Chartwells is an important multi-million-dollar revenue stream for the University. You first
pay the university your room and board, they pay a portion of that to Chartwells, and Chartwells
serves you meals. At the moment you redeem or purchase a meal (through Flex, Redbucks, or Cash),
the University takes a percentage on the “sale” of that meal. A percentage that sings to the tune of
$2,950,000 dollars in guaranteed commissions every year, according to Chartwells latest RFP from
20153. Chartwells also included in their contract a $500,000 signing bonus, $6,575,000 in
renovations, and $190,000 in donations, all paid to the University. One of the donations includes
$10,000 for President Carlos Vargas’s inauguration ceremony.

That Starbucks Oatmilk Shaken Espresso on campus is valued, in dollars, a little higher than
the one at the Starbucks down the road. There’s Chartwells profit margins to meet, and Southeast
commissions to pay. While traveling deep in the woods of mission statements, financial reports,
renovation plans, and work schedules, keep in mind that Chartwells is a for-profit corporation that
considers Southeast an excellent partner in business.

Corporate Structure of Chartwells

The Chartwells that serves Southeast Missouri State University is just the beginning of a
long, globally reaching, corporate chain. Southeast’s Chartwells is owned by Chartwells Higher Ed4
out of Rye Brook, NY. Chartwells Higher Ed is in turned owned by Compass Group USA5 out of

3 (Chartwells, 2022)
4 (Chartwells Higher Ed, 2022)
5 (Compass Group USA, 2022)
Charlotte, NC. Compass Group USA is a wholly owned subsidiary of Compass Group PLC6, a publicly
traded company based in the United Kingdom. Compass Group PLC is the largest food service
company in the world.

Chartwells is just one part of a modern corporation with a global reach. Their business
model includes what appears to be large amounts of local control, as seen on our own campus
through the hiring of two Southeast graduates to lead the local operations. There is credit due to
Chartwells and Compass Group for their commitments to diversity, climate change, plant-forward
menus, and other forward-thinking initiatives. However, this meal plan change is nothing more
than a cost-cutting scheme by a global corporation to increase profits in response to the challenges
of the pandemic, while providing increased commissions for a pandemic struck state university.
Money, much like the food we eat, has to come from somewhere.

Show-Me the Profits

Compass Group PLC is a publicly traded company, and much like similar companies in the
USA, the United Kingdom requires the publication of an Annual Report7 outlining their business
operations. Headlines in their Annual Report include, “Seizing the Opportunity”, “Controlling the
controllable”, and “Optimise and evolve.”

For convenience I have converted the following amounts from British Pounds (£) to US Dollars ($).

In 2021, Compass Group PLC had $24.6 Billion in revenue, and made $1.1 Billion in profit.
Their underlying profit margins sit at 4.5%, compared to 2.9% in 2020. In short, they are what can
be classified as a “Cash Cow” in the business world. A hard to enter market, limited competition,
and extremely high (95.4%) customer retention. Chartwells keeps themselves embedded in local
communities and “digs in,” through custom branding, local leadership, just-enough transparency,
and more. This makes it hard for institutions like Southeast to even consider a different food service
provider.

Additionally, in 2021, Compass Group saw a 10.2% revenue decrease, but a profit increase
of over 85%. That’s a drop of around $3 Billion in revenue, but an increase of around a third of a
billion in profits. How did they increase profits while experiencing declining revenue? Cutting costs-
and it is exactly what they are planning on doing at Southeast.

But no great story makes it without a thrilling plot hole solved by an epic twist. Readers
might wonder why the University would support a such a cost cutting program. The University has
seen declining enrollment8, and declining net assets and revenues9. This leaves them eager to work
with Chartwells to generate additional revenue for both parties through a cost-cutting initiative.

6 (Compass Group PLC, 2022)

7 (Compass Group PLC, 2022)
8 (Southeast Missouri State University, 2022)
9 (Southeast Missouri State University, 2022)
Conclusion - But Who Am I?
Their case for the new meal plan changes lacks concrete evidence and transparency, and to
quote the motto of the great state of Missouri, “You have got to show me.” Show me, if students
really liked these changes at other universities. Show me, directly how this is more flexible. Show
me, the loss of value this plan brings for students. I imagine it would be more than the small $150
lost in value by 20 RA’s in a week.

Readers, at this point you might be feeling a little hopeless. What say might you have when
it comes to the management of millions of dollars? What can be done when the University finds new
ways to lower quality and value for Missourians and their families? Is Chartwells really doing
anything wrong by making a bigger profit? (yes)

Do I really have a choice?

You do have a choice. You get to choose where to put your money, your time, and your
resources. Knowledge is power, and it has the potential to drive real institutional change. The Board
of Governors will vote on the changes in a few short weeks. As citizens and stakeholders in an
educational institution- your words really do matter, as seen in the compromise found at University
of Arkansas. Write a Letter to the Editor at the Southeast Arrow and the Board of Governors
informing them about how you feel. Don’t be afraid to look where others glance, and take a scientific
approach to what others tell you. It pays dividends far greater than gold.

Author’s Note: The email and physical mailing addresses for the Board of Governors is provided below,
along with contact information for Chartwells and Bruce Skinner. Please be polite when contacting
anyone on this list- we all share the belief that the University can improve.

Letter to the Editor of the Southeast Arrow

One of the most effective ways to voice your opinion.
Nathan Gladden
editor@southeastArrow.com

Letter to the Editor of the Southeast Missourian

One of the most effective ways to voice your opinion.
Rick Fahr
rfahr@semissourian.com

Alicia Ticer
Chartwells – Email her for Information about Redhawk Dining Advisors
alicia.ticer@compass-usa.com

Bruce Skinner
Associate Vice President for Student Life
bskinner@semo.edu
All Board Representatives
Edward P. Gargas, Tina L. Klocke, David C. Martin, Lloyd F. Smith, James P. Limbaugh, Vivek Malik
board@semo.edu
One University Plaza, MS 3300
Academic Hall 144
Cape Girardeau, MO 63701

Additional Reading
The Rising Cost of College
In the process of writing this document, Jonah McGuire sent me an interesting article that mentions
the relationship between Chartwells and Southeast10. They talk about the guaranteed commissions,
what happens at other schools, the corporate giants at play, and the student impact.

A Compromise Available
During the Student Government presentation on February 7th, Bruce Skinner mentioned the model
for the plan that he witnessed at the University of Arkansas. Yet the meal plan there still includes
the traditional meal plan alongside the block meal plan.11

Chartwell’s Positioning
On the meal plan FAQ page for Pace University, a Chartwells client where every student is required
to have a meal plan, they claim that a meal plan is required so that students better adjust to college.
“Studies consistently show that on campus dining and socializing has numerous educational and social
benefits, including contributing to graduation rates, assisting in better transitions from high school to
college, meeting with and making new friends, and providing convenient options -- without the need to
carry cash -- between classes or while studying. For off campus students, establishing on-campus
connections and friendships are also critically important.”12

Chartwells fails to cite a single source on the topic. No matter if it’s true or not- it sure is profitable.

At Southeast, the meal plan is promoted with the following statements:13

• It can save you money!

• You won’t have to race back to your room to cook up a meal.
• Eat with your friends!
• Our meal plan works anywhere on campus. You don’t require any kind of extra-special card
or money.

10 (Mathewson, 2022)
11 (Chartwells, 2022)
12 (Chartwells, 2022)
13 (Chartwells, 2022)
 • Commuter students who sign up for a meal plan receive the same great benefits as resident
students.
• No dishes!

But lacks

• We make millions off you every year!

• “Can save you money!” doesn’t mean it does.

Inaccessibility
As many Readers might know, the Southeast website was re-done within the past year.
Within this reorganization, Southeast failed to provide a landing page to access important
documents, such as financial reports. The latest document I could find was Summer 2020 Financial
reports, only as a PDF download link, available from Google and the SEMO website’s search engine.
The same goes for the Chartwells RFP.

The University and Information Technology department should work better to improve
access to these documents of critical public importance.

How We Got Here

It’s no secret that the University needs more money to support its mission and vision.
Having more capital means more scholarship opportunities and ultimately helps provide better
education for Southeast students. Unfortunately, like many colleges across America, Southeast
competes for students. Tricky marketing and hidden revenue streams aren’t unique to this campus.
Instead, they’re more normalized than ever.

Many students don’t realize the marketing hoops they jump through to get an education.
The current competitive environment has enabled the behavior we are witnessing- and it seems
almost impossible to find a solution. Tuition raises are a headline grabber and often upset students
and families- but it’s the best way to be straightforward with how much your education costs.
Cutting costs by reducing the value students receive, masking the motivation, and encouraging
students to spend more is not the ethical way to generate revenue.

At the end of the day, being a public institution, Southeast should work towards being
transparent, listening to stakeholders, and fostering a community that has the power and
knowledge to create lasting change.
References
Abanathie, M. (2022, February 9). SGA gets first look at changes to meal plans for fall semester.
Retrieved from Southeast Arrow: https://www.southeastarrow.com/story/2933153.html

Chartwells. (2022, February 9). Chartwells RFP Proposal. Retrieved from SEMO:
https://semo.edu/pdf/Success_Chartwells_RFP_Response.pdf

Chartwells. (2022, February 9). FAQ About Southeast's Meal Plan. Retrieved from SEMO:
https://semo.edu/blog/blog-posts/faq-meal-plans.html

Chartwells. (2022, February 9). Pace NYC Meal Plan FAQs. Retrieved from Dine on Campus:
https://dineoncampus.com/pacenyc/meal-plan-faqs

Chartwells. (2022, February 9). University of Arkansas Student Meal Plans. Retrieved from Dine on
Campus: 2022

Chartwells Higher Ed. (2022, February 8). Who We Are. Retrieved from Chartwells Higher Ed:
http://chartwellshighered.com/who-we-are/

Compass Group PLC. (2022, February 8). 2021 Annual Report. Retrieved from Compass Group PLC:
https://www.compass-group.com/en/investors/annual-reports.html

Compass Group PLC. (2022, February 8). Compass Group. Retrieved from Compass Group:
https://www.compass-group.com/en/index.html

Compass Group USA. (2022, February 8). Contact Us. Retrieved from Compass Group USA:
https://www.compass-usa.com/contact-us/

Mathewson, T. G. (2022, February 9). A tough-to-swallow reason college keeps costing more: the
price of meal plans. Retrieved from The Hechinger Report: A tough-to-swallow reason
college keeps costing more: the price of meal plans

Southeast Arrow. (2022, February 7). Livestream of SGA. Retrieved from

https://fb.watch/b2mB5ATuCj/

Southeast Missouri State University. (2022, February 9). Summer 2020 Financial Statements.
Retrieved from SEMO: https://semo.edu/finance-admin/_pdfs/southeast-missouri-state-
university-financial-report-20201.pdf

Southeast Missouri State University. (2022, February 9). Three Year Enrollment Report. Retrieved
from SEMO: https://semo.edu/institutional-research/_pdfs/cen-sem-enrollment-fall-
2021.pdf