University of Dayton Flyer Enterprises Flyer Enterprises | 300 College Park | Miriam Hall, Room 303 | Dayton, Ohio 45469-2226 937.229.4722 | flyerenterprises.com
Annual Report 09â€“10
Vision Mission Strategy Values
Board of Directors and Leadership Team
“We have on campus, and in the School of Business, a commitment to entrepreneurship... well here in fact, is entrepreneurship in action.” - Dr. Joe Castellano, Accounting Professor
Letter to Shareholders Artstreet Café
Dining Services Joint Ventures
Flyer Spirit FE Catering Flyer Consulting
IT Group Balance Sheet
Notes to Financial
2 3 4 6 8 9 11 12 13 14 15 16 17 18 19
About Flyer Enterprises
Education beyond the classroom
About Flyer Enterprises Flyer Enterprises started as a student-run business at the University of Dayton in 2001 with two divisions, and has experienced stellar and steady growth ever since. Today, as one of the largest student-run corporations in the nation, Flyer Enterprises provides unparalleled experiential business education to employees and ethically-focused services within the University of Dayton community through chosen ventures. The reason for Flyer Enterprisesâ€™ success is clear. By offering students the opportunity to apply classroom lessons on business, communication and leadership to practical daily work experience, Flyer Enterprises serves the University community while acting as a learning laboratory for tomorrowâ€™s top professionals. The corporation prides itself on providing an environment for hands-on learning about enterprise and strives to become the national leader for experiential learning. Flyer Enterprises is completely comprised of undergraduate students, from the sales associates and managers to the chief executive officer. Students make all the business decisions at every level of the organization, with limited advisement from faculty advisors and answer to a Board of Directors. Flyer Enterprises operates eight divisions, employs more than 170 students at the University of Dayton and has annual revenues of more than $1.4 million.
divisions, with more
Vision and Mission Vision: To become the national leader for experiential business education.
Mission: To create a competitive advantage for our employees by providing experiential education through the operation of profitable, ethically-focused businesses that serve the needs of our stakeholders.
Flyer Enterprises provides campus employment for a diverse group of students and desired services to the University of Dayton community through its ventures. FE works to incorporate the University of Dayton community into its ventures, thereby extending the FE experience to other individuals. This occurs by integrating the School of Business Administration curriculum into the management of FE and maintaining dialogues with campus organizations.
Corporate Values Teamwork Tenacity
All members of the University of Dayton community Ray Lane – Executive in Residence, Chairman of the Board Dr. Matthew Shank – Dean of the School of Business Administration Sr. Annette Schmeling – Vice President of Student Development and Dean of Students Dr. Deborah Bickford – Associate Provost for Academic Affairs and Learning Initiatives John Shishoff – Director of Undergraduate Programs, School of Business Administration Ken Soucy – Director of Purchasing and Business Services Paula Smith – Director of Dining Services Bob Chelle – Director of Crotty Center for Entrepreneurial Leadership Dr. Rebecca Wells – Associate Professor of Marketing & Flyer Enterprises’ Marketing Advisor Don Vince – Associate Director of Financial Aid and Office of Student Success Art Santoianni – School of Business Administration Information Techonology Director Katie Sunday - Student Government Association Business Senator Jessi Neff - Chief Executive Officer of Flyer Enterprises
“A $1.4 million company, Flyer Enterprises at the University of Dayton is one of the largest studentrun enterprises in the country” —Young Money
BOARD OF DIRECTORS
Executive Team Members:
Chief Executive Officer – Jessi Neff Chief Financial Officer – Dan Laycock Chief Information Officer – Jake Weber President of ArtStreet Café – Joseph Guy President of Coffee – Jackie Dorsey President of Dining Services Joint Ventures – Nathan David President of Retail – Jackie Lindsey Vice President of Accounting – Julie Besmer
Corporate Accountant - Tim Bencic Director of Marketing Communications – Lynn Feldmann Graphic Designer - Andrew Stauffer
IT Operations Director - Mike Berg IT Specialist - Pat Seggerson IT Specialist - Brigitte Sherman IT Specialist – Brock Griffey
General Manager - Steve Cabanski Director of Human Resources - Kelsie Noe Director of Marketing - Amanda Pfriem Financial Manager - Brad Borchers
Director of Marketing - Danielle Phillips Director of Human Resources - Georgia Ealy General Manager, The Blend - Jeff Firestone Financial Manager, The Blend - Courtney Heinekamp General Manager, The Blend Express - Bryan Kri sty Financial Manager, The Blend Express - Bobbi Schreiber
university of da FE Catering:
Director of Operations - Ryan Kinnon Director of Human Resources - Carrie Abbott
General Manager - David Yenney Director of Human Resources - Julie-Anne Anton
General Manager - Jimmy Hankenhof Director of Merchandise - Elizabeth Leavy
General Manager- Jimmy Maloney Director of Merchandise - Josh Multhauf Director of Human Resources - Maria Schletker
General Manager - Keri Crist-Wagner Director of Operations - Julie Schenck Director of Merchandise - Audrey Leeker
Fellow Flyer Enterprises Stakeholders: January 3, 2010 marked the 20th anniversary of the student-run business at the University of Dayton. Since the creation of the Flyer Enterprises’ corporate umbrella, we have seen tremendous growth and success. Celebrating our anniversary gave us a great opportunity to reflect on how far we have come since Rudy’s Fly Buy first opened its doors, and how many students have benefited from being a part of this experience.
Despite the economic recession, FE was able to remain profitable while facing fewer students on campus and decreased individual spending. In order to combat the decrease in sales, each division took steps to optimize efficiency of their operations and decrease waste through an overall emphasis on lean concepts and improvements. Also, managing these divisions during the economic downturn provided an invaluable learning experience for executives and managers to lead during a challenging economic climate.
Throughout the year, we sought new opportunities for personal growth and leadership and learning experiences for our employees. Within FE, there has always been a strong desire to give back to the UD community. In the past, FE has given donations to organizations on campus, but this fall, we wanted to re-energize our approach to service. In order to do so, a community outreach coordinator position was created at each division. The coordinators are responsible for organizing at least one community service
event for their employees each semester.
In addition, Flyer Enterprises adopted Flyer Consulting as its philanthropy. Flyer Consulting is a UD student-run organization that provides consulting services for nonprofits in the Dayton area. Flyer Enterprises collaborates with Flyer Consulting by providing advice on human resources practices, transition knowledge management, and long-term strategy.
While we continually strive to manage our current divisions as effectively and efficiently as possible, in the 2009-2010 fiscal year we refocused on our founding principle: entrepreneurism. FE focused on solidifying internal operations and business practices. As a result, we are now poised to grow, opening our eight division, while also developing plans for new potential ventures. At the beginning of the 2009-2010 fiscal year, Flyer Enterprises pursued an opportunity for growth and opened FE Catering (FEC), its eighth division. FE Catering combines the catering options offered by The Blend Express and ArtStreet Café into a single operation in order to better provide for the campus community. FEC accomplished this goal by increasing the ease of ordering and improving the brand image of our catering services. While FEC was a growth opportunity that materialized during the 2009-
Letter to the Shareholders
2010 fiscal year, FE is still pursuing plans for possible new ventures. Several opportunities for additional ventures and product line expansions have come our way in the past few months. We can attribute this influx of growth opportunities to FE’s strengthening reputation of operational excellence and our efforts to maintain a constant presence in the minds of the university’s top administrators. Since these initial conversations, new venture strategy teams were established to do research and develop business plans in the hopes of launching new divisions in the future.
Transition time is a great opportunity for new ideas and to rethink our current structure and operations. After evaluating our leadership structure, we decided to reorganize some of the executive positions. The executive team created the vice president of corporate development, whose focus is expanding the learning opportunities available to FE employees. This position is also responsible for facilitating cross-divisional collaboration, improving alumni relations, and managing our corporate hiring strategy.
At the beginning of October 2009, Flyer Enterprises was given the opportunity to present to the University of Dayton’s Board of Trustees’. During this presentation, we outlined the company’s history and present status, as well as the benefits FE provides to UD students, the University as a whole, and the Dayton community. In addition to our presentation, we created a video describing the benefits of Flyer Enterprises, which can be viewed at www. youtube.com.
Flyer Enterprises is in a great place to pursue several growth opportunities and further improve upon current operations that will make us bigger and better in the future.
Due to increased branding efforts, Flyer Enterprises established awareness on and off campus and enhanced its corporate identity. FE continues to be a resource and benchmark for other schools interested in pursuing similar entrepreneurial experiences. Because of our improved reputation and operational excellence, other universities have identified Flyer Enterprises as a model for experiential learning.
In closing, I would like to thank the faculty, staff, and University administrators who have continued to assist Flyer Enterprises. Our support and collaborations with the University has been absolutely essential to our success over the past 20 years. A special thank you to our Board of Directors and advisors, Ray Lane and John Shishoff, for your continued dedication and guidance.
Jessi Neff Chief Executive Officer
Art Street Cafe 8
The 2009-2010 fiscal year proved to be a year of many successes and many challenges for ArtStreet Café. The management team focused intensely on new product development, ArtStreet community collaboration, classroom collaboration, and sustaining the dynamic culture and atmosphere for all members of the ArtStreet family.
The beginning of the year brought significant changes and a fresh perspectives to the Café. Eleven new sandwich artists were hired to replace the graduating seniors from the 2008-2009 fiscal year, which represented approximately one-third of the total staff. A major investment was initially made in training and team building activities to bring the new family together and prepare for the opening of the Café.
The 2009-2010 fiscal year also brought many exciting additions to ArtStreet Café’s already delicious menu. The most significant change was the introduction of freshly baked chicken to the Café’s product line. The new chicken process was a major component of the Café’s ___% decrease in cost of goods sold relative to revenue ratio. Additionally, pita pizzas were added to the menu along with lettus wraps targeted to healthconscious consumers.
Tremendous gains were also made in the Café’s increased collaboration with key organizations and members of the ArtStreet community. VIP cards were issued to ArtStreet residents to reward them for their continued patronage and drive business and engagement from our neighbors. Thursday Night Live (TNL) became a destination for showcasing top student artists on campus and experienced remarkable attendance. The incredible collaboration between the Café and the ArtStreet community was best showcased through the creation of the TNL Compilation CD. Live TNL performances were recorded by Street Sounds, the student-run recording studio, and the CD was launched at the TNL CD
Release Party on January 23, 2010. Staying true to the core principle of Flyer Enterprises, ArtStreet Café embraced classroom collaboration in 2009-2010 at both the undergraduate and graduate levels. An undergraduate OPS 350 course, Process Improvement, focused specifically on improving the resource utilization of sandwich artists during non-peak shifts. The recommendations were accepted by the management team and resulted in the elimination of an additional food preparation shift that is forecasted to save the Café nearly $1,100 annually in payroll costs. Furthermore, a group of graduate level students in MBA 607, Lean Management, focused on improving the overall process times of product preparation. They recommended equipment upgrades and reorganization that was also accepted by the management team.
Although there were many exciting enhancements to internal operations and community relationships, the Café was not immune to the external realities of the economic recession. When considering the external economic factors and overall decrease in the student population, sales declined by _____%. Even with the many cost-saving initiatives that were implemented by the management team, the Café failed to turn a profit incurring a net loss of (_______). Despite the overall decrease in financial performance, the Café is in a strong position to rebound during the 2010-2011 fiscal year. The combination of a more experienced staff, improved marketing strategy, and cost-saving initiatives established throughout the 2009-2010 fiscal year will be the driving components leading ArtStreet Café toward a successful future. Joseph Guy President of Artstreet Café & FE Catering
Bread: The number used to make the Café’s Panini sandwiches on a weekly basis.
Coffee Divisions The 2009-2010 fiscal year for the coffee divisions was a year of focusing back to our roots.
To begin the year, The Blend opened with a new renovation. The renovated space allowed for a better operational flow and overall more appealing visual. As Flyer Enterprises’ oldest division, the renovation served as a nice gift as The Blend celebrated its 10th birthday in January 2010.
A priority at both divisions was to further develop our existing product line. The Blend’s General Manager, Jeff Firestone, worked with our coffee supplier, Boston Stoker, to create a custom blend made specifically for Flyer Enterprises. The coffee blend, Rudy’s Roast, has provided FE with a new opportunity to give back to the University by creating a scholarship connected to the sales of Rudy’s Roast. Through this strengthened relationship, FE can sell beans in bulk quantities.
The coffee divisions also worked towards improving relationships with other vendors to enhance product offering. One significant change came through working with our custom cup and paper supplier, I-Supply. We re-designed the cups to have a custom sleeve instead of a pre-printed label. This new approach will allow for a more efficient reorder process and a savings in cup costs.
Another goal of the management team this year was to establish a culture in which both customer and employee would feel valued. To do this, the management team placed emphasis on allowing the employees to have an intellectual stake in the marketing, human resources, and operations initiatives within the divisions. We also dedicated time to re-educating our employees on the core values of Flyer Enterprises and the founding principles of the two coffee divisions. This investment proved beneficial to the service and culture of the divisions and greatly improved our connection with our loyal costumer base.
The 2009-2010 fiscal year could not have been a stronger one for The Blend and The Blend Express. The improvements in branding, culture, operations, and customer satisfaction have shown that with a commitment to the basics of our foundation, success can be obtained year after year. I could not have worked with a better staff of baristas and managers. Their hard work and dedication are the driving factors behind the continued success and profitability throughout the years. Jackie Dorsey President of Coffee
DSJV Dining Services Joint Ventures Each of the three Dining Services Joint Ventures (DSJV) experienced progress and surmounted struggles in the fiscal year of 2009-2010.
Over the year, the relationship with Dining Services has continued to mature, and efforts have been made to ensure that Flyer Enterprises is continuing to be an instrumental partner in our contractual relationship. These efforts included improved communication, collaborative management selection, refined transitions, and slight contract revisions. The fiscal year of 2009-2010 has generated numbers that are lower than previous years. This decrease in revenues can be mainly attributed to a smaller freshmen class, which resulted in less meal plan dollars for DSJV (meal plan makes up roughly 90% of DSJV’s revenues). Regardless, the perseverance of the DSJV’s management teams and innovation of employees enabled countless accomplishments over the past fiscal year.
Flyer Spirit This fiscal year of 2009-2010 marked the start of a redefined identity for The CHILL. At the beginning of the year, a new logo for The CHILL was revealed. The logo’s fun and healthy design set the stage for the healthy image that The CHILL strived to obtain. Over the year, new products were introduced including a variety of smoothies and packaged items. In addition, research was completed to enable the introduction of a new freshly juiced drink line next year. The net income of The CHILL only decreased by __%, which was in the face of a decrease in freshmen class size. The Galley experienced a decrease in revenues from the 2008-2009 fiscal year. The overall decrease was __%. To overcome this dip in revenues, The Galley staff and management team placed a focus on improving processes. Through lean evaluation, processes at The Galley were examined and modified to reduce costs and add value to the customers. Some of these projects included the addition of an express drink line, reordering of back stock, improved disposal methods, and more effective tools for preparing products. In addition, The Galley’s relationship with both The Hangar and The Campus Activities
Board have become further developed and increasingly advantageous.
Stuart’s Landing continued to contribute the highest amount in revenue of any single division to Flyer Enterprises over the past year. Stuart’s Landing ended the 2009-2010 fiscal year with total revenues of __%. The main focus this year was on the customer. A loyalty program was developed to provide customers with even more value. It was bitter sweet as Stuart’s Landing closed for the summer. Plans for a Stuart Hall remodel (to be completed over summer 2010) included a new sleek version of the store. Therefore, we had to say goodbye to the old setup and location of Stuart’s Landing.
All three DSJV have survived the trials that accompanied the 2009-2010 fiscal year. These trials have encouraged reevaluation and innovation by both managers and employees. The novel improvements have positioned each division to be prosperous in the years to come. Nathan David President of Dining Services Joint Ventures
The 2009-2010 fiscal year was one of tremendous growth for Flyer Spirit.
Sales grew to over 8.6%, and the deficit was cut by 32.3% from the previous year. This success was due to a focus on external marketing and standardization of internal operations. Some of the highlights of the year were our Black Friday sales (over $4,300), and having three profitable months in September ($33,667.83), November ($37,301.85), and December ($58,656.16). One of the most notable improvements to Flyer Spirit was the creation of a new, more user-friendly website. On July 1st, 2009, the improved site, www.flyerspirit.com, launched, and since then we have seen an extraordinary difference in our online awareness. Web sales grew from a few Web orders per month to a few orders per week.
Fresh and exciting marketing efforts were a major contributor to Flyer Spirit’s success this year. The director of merchandise took charge of her role and gave customers a reason to check out Flyer Spirit. The creation of a new marketing team gave sales associates an opportunity to strongly contribute to the store’s success in a
whole new way, with graphic designers, a public relations assistant, and a Web assistant. We utilized e-marketing tools such as Facebook, Twitter, and Vertical Response e-mail blasts to further our recognition abroad. As far as operations of the store, Flyer Spirit restructured internal operations to run more smoothly. One of the first changes was the store’s inventory management system. We purchased rolling garment racks for the backroom inventory, and moved all boxes to the college park center. All boxes were labeled to specify the products’ name, color, size, and quantity. Our increased financial focus ensured that we managed our expenses more efficiently, and therefore made smarter business decisions. Jackie Lindsey President of Retail
The 2009-2010 fiscal year brought the addition of the newest Flyer Enterprises’ division to the University of Dayton campus: FE Catering.
As it opened its doors August 17, 2009, FE Catering combined the catering services of The Blend Express and ArtStreet Café, while also expanding the catering products and services offered to the UD community. Initially, FE Catering employed eight catering associates, two managers, and myself as president.
The business plan for FE Catering was developed by Ryan Kinnon (director of operations), Carrie Abbott (director of human resources), and myself (president) beginning in May 2009 and concluding in early August 2009. Andrew Stauffer (graphic designer) created the new logo, color scheme, and overall brand message for the new division. In total, the start-up costs incurred were relatively small at $_____. The initial investment consisted mainly of preliminary supplies and payroll costs associated with the research and business plan development. The division’s first management team focused intensely on creating brand awareness on the University of Dayton’s campus and developing and refining standard operational procedures.
The division debuted at the Campus Resource fair in the ArtStreet Complex on August 17, 2009, distributing our menu and samples to the nearly 100 area coordinators and resident assistants in attendance. Furthermore, the FE Catering Showcase was held in the Atrium of Miriam Hall on October 16, 2010. This event aimed at introducing our expanded menu and services to the administrative
offices on campus. In total, nearly 35 representatives from various departments on campus attended the open-house event, including returning and potential customers. The event proved to be successful as ___% of the potential customers in attendance became new customers by placing orders in the 2009-2010 fiscal year. The initial efforts of the management team led to early financial and operational success. In the first 45 days of operations, the business had already achieved ____% of catering revenue from the previous fiscal year. Also, efficient training and standard operating procedures were cemented, which ensured the eight catering associates and two managers were delivering quality products in an efficient manner. Specific initiatives in scheduling and event preparation were major drivers in establishing the day-to-day operations of the division. Overall, FE Catering’s first year of operations proved to be a tremendous success. The division only incurred a net loss of $___, which included the initial investment of $____ and $____ of uncollected revenue that has since been received and will be recorded in the 2010-2011 fiscal year. The newest division of FE achieved many financial, operational, and marketing successes in its first year of business. FE Catering is in a strong position to make a significant impact in the future to provide new experiential opportunities to the employees of Flyer Enterprises. Joseph Guy President of ArtStreet Café & FE Catering
The 2009-2010 fiscal year marked the official start of Flyer Consulting and exceeded all of my initial expectations.
The summer of 2009 was spent developing the employee training program, guidelines, and other standarized documents for Flyer Consulting. It also included the first meetings with Flyer Consulting’s first clients. I had the privilege of meeting with Bing Davis of Bing Davis’ Art Studio and Steve Rubenstein of Crayons to Classrooms. These projects were treated with the utmost professionalism, and both projects allowed our consultants to explore creative and customized business options for our clients. As the work approached completion, the major focus shifted to sustainability. Questions such as, “Will they be able to maintain these plans,” “How frequently should we have evaluation meetings,” “What do those evaluation meetings look like,” and others started taking shape and became the reality of the situation. An intern was hired for Crayons to Classrooms to carry out the marketing plan our consultants designed for the nonprofit. In addition, a detailed organizational structure and implementation strategy was given to Bing Davis. Two months after the final deliverables were in place, each client was given a follow-up letter and brief questionnaire. The purpose of the questionnaire was used to help us improve our services for the future and to allow our clients to evaluate and critique Flyer Consulting.
At the beginning of the Winter 2010 semester, we were given an intense project from Chaminade Julienne High School (CJ). Flyer Consulting jumped leaps and bounds due to the magnitude of this new client. We quickly realized we would need to add new consultants to our team because of the three demanding aspects of the project: finance, ROI, and benchmarking. After hiring four more people, the Flyer Consulting employee pool totaled 12. The project managers took on a lot of
responsibility and the projects were estimated to be completed by midJuly 2010.
Toward the end of the year, transitions were approaching and many kinks needed to be adjusted for Flyer Consulting to be even more successful. Due to the challenging management workload, new management positions were created that would improve the operational flow of Flyer Consulting. The three new positions, which included two directors of marketing communications and a director of human resources, proved to be value-adding assets to our consulting team. New positions have been filled, first year problems have been solved, and I have complete faith in the new team to make Flyer Consulting one of the best experiential-learning opportunities available to students at the University of Dayton’s campus. The goals for this upcoming year are to facilitate better and more open streams of communication, build awareness and market FC to students and the community, and improve operational efficiency of the organization. Dean Shank and Professor Shishoff have continued to sing our praise, and the pride that they have in Flyer Consulting is extremely encouraging for the future. Also, I have received letters and phone calls from our clients and numerous business professionals expressing their gratitude and overall satisfaction with the caliber of work produced by the employees of Flyer Consulting. I thoroughly enjoyed my time as president and genuinely cared for each and every one of my employees. I cannot wait to see how Flyer Consulting continues to grow in the future. Elizabeth Wells President of Flyer Consulting
In the IT Group’s third year of operation, it continued to establish itself as a reliable support function for Flyer Enterprises.
The 2009-2010 fiscal year began with a strong focus on the group’s internal operations and divisional services. Steps taken toward accomplishing this include a restructuring of the IT Group, the creation of a more user-friendly ticket tracker system, and a new IT services’ portal.
The IT Group created a new position titled the IT operations director. This position was created for the purpose of handling the day-to-day operations and the technical problems of the IT Group. With the creation of the operations director, the CIO is able to concentrate on the business application of IT, and act as the liason between IT and the rest of the company. Due to the troubles in the past years with IT’s support system, a new technique was implemented to improve means of communication and ease of use for managers. This was a great success and has been a key factor in the improved customer service. In addition, the new IT portal is a central location for division managers to visit and utilize all of IT’s resources. The improved IT portal has made it easier for managers to access sites as needed.
During the latter part of the year, IT identified certain issues with past projects and how they were being used and operated. This led to the decision to revisit IT’s everyday tools and improve them, increasing their effectiveness and efficiency. The reevaluation and improvements will be an ongoing process to ensure the best possible customer service.
IT continues to take steps to improve and establish itself as a value-adding and reliable support function. The divisions have seen many improvements in the way they run through the newly imported coffee tracking system, which helps the two coffee divisions monitor exactly how much coffee they have brewed and the time it was made. Also, an analysis of sales versus labor hours at The Blend Express was done to more effectively staff the coffee shop during rushes and maximize labor efficiency during slow periods. These are just a few ways IT has helped improve how the FE divisions operate on a daily basis. Jake Weber Chief Information Officer
Information Technology Group
Financially, Flyer Enterprises had a successful but challenging year.
Overall, Flyer Enterprises saw a 9% decrease in total sales. Through this challenging time, Flyer Enterprises tightly controlled costs, with divisions efficiently managing staffing levels to decrease payroll expenses by $50,000. LEAN initiatives and a focus on waste management increased profit margins by over 5% at Artstreet Café, The Blend and The Blend Express. The only major investment for fiscal year 2009-2010 was incurred with the installation of new countertops at The Blend. A main goal of the accounting team was to utilize all resources within Flyer Enterprises.
In doing so, each financial manager learned how to use Asset Management, the software created by the company’s IT Group, and worked to implement its capabilities at each division. As the company moves forward, utilizing this software will help our team better understand the life cycles of our equipment and the maintenance that has been performed over time. The accounting
team also worked closely with IT to receive timely and accurate sales data to be better aware of financial performance on a daily basis.
In the upcoming year, the accounting division will be restructured. The vice president of accounting will be eliminated and the chief financial officer will have sole leadership of the accounting team. Furthermore, responsibilities will be delegated to the financial managers and corporate accountants, which will allow each of these employees to have a better view of the financial performance of his or her division. This delegation of responsibilities will also lead to more timely, monthly financials and improved auditing of that information. Dan Laycock Chief Financial Officer
Julie Besmer President of Accounting
Notes to Financial Statement 1. The ArtStreet Café was funded through a contract with the University of Dayton. Flyer Enterprises was given a $290,000 line of credit from the University to design the venture, cover start-up expenses and make capital purchases associated with the development of the Café. In return, Flyer Enterprises distributes 51% of positive cash flow annually to the University and does not pay any rent or utilities to the University of Dayton. 2. The Galley, Stuart’s Landing and The CHILL are joint ventures with Dining Services. Dining Services provides all capital and technological investments and accounting responsibilities. Flyer Enterprises is responsible for all daily operational decisions and employee development. Per contractual agreements with Dining Services, Flyer Enterprises retains 35% of The Galley’s operational income, 10% of Stuart’s Landing’s operational income and 35% of The CHILL’s operational income. The remainder of the operational income for each division is distributed to Dining Services. 3. The University of Dayton issued a required budget reduction for the fiscal year 2010. This resulted in a $2,000 addition to Flyer Enterprises’ Distributions. 4. Cash on Hand—The amount of cash available in the safe and cash drawers as petty cash at the divisions.
5. Meal Plan Revenue—Revenue collected from student’s Dining Dollars purchased from the University of Dayton, which are only accepted at Dining Services Joint Ventures.
6. Staff Benefits Pay—The University of Dayton collects a 2% employee benefit charge for regular student labor and a 4% charge for work study student labor. These charges are to cover student employees’ workers compensation coverage and a composite charge on students’ wages subject to social security.
7. Share of UD Admin—The University of Dayton charges 2.3% of expenses for Flyer Enterprises using the University’s payroll, purchasing, accounts payable, and bursar ad accounting offices. 8. Share of FE Corporate—The divisions that are not participants in a joint ventures are charged 2% of expected revenues to the Flyer Enterprises Corporate account to assist in covering corporate-wide expenses.
9. Previous financial statements indicated certain assets were held under Flyer Enterprises. After consultation with University officials and members of the Board of Directors, including the Chairman, the policy has changed. In an effort to streamline our accounting processes with those of the University, Flyer Enterprises is treated as cash basis operation beginning in 2007. Since the University depreciates Flyer Enterprises’ equipment on the University’s books, those assets are not maintained on Flyer Enterprises’ balance sheet per Generally Accepted Accounting Principles.
10. Any equipment or facility improvement to ArtStreet Café, The Blend or The Blend Express over $1,000 is funded out of the Flyer Enterprises Retained Earnings account and not out of the individual division’s operating income in order to facilitate easier yearto-year comparisons. The income statement indicates major purchases for each division. While this is shown as an income statement expense, it is noted that the corporation pays for all major purchases reaching the $1,000 USD threshold. These decisions are made by the Division President in consultation with the Chief Executive Officer and Chief Financial Officer. Any purchase over $10,000 must be approved by the Board of Directors. 11. The University of Dayton School of Business Administration pays for all corporate expenses. These included, but were not limited to, company-wide advertising, personnel compensation, and other general expenses.
Acknowledgements DESIGNED BY Alexander Smith PHOTOGRAPHY BY Kelsie Noe FLYER ENTERPRISES’ LOGOS Created By Daniel Santoli Andrew Stauffer EDITED BY Megan Arko Joseph Guy Rachelle Patsey