Attachment Q1 - Form of Agreement Pkg 1.docx

ATTACHMENT Q1 – FORM OF AGREEMENT – PACKAGE 1

FOOD AND BEVERAGE CONCESSION AGREEMENT

FOR THE MCNAMARA TERMINAL

AT

DETROIT METROPOLITAN WAYNE COUNTY AIRPORT

BETWEEN

THE WAYNE COUNTY AIRPORT AUTHORITY

AND

SOLICITATION NO. 240757

PACKAGE 1

CONTRACT NO. [________]

Table of Contents

EXHIBITS

ii

This Agreement is dated as of this [___] day of [____], 20[___], by and between the WAYNE COUNTY AIRPORT AUTHORITY, a public body corporate, by and through its Chief Executive Officer, with principal offices located at Detroit Metropolitan Wayne County Airport, 11050 Rogell Drive, Building #602, Detroit, Michigan 48242 (hereinafter the “Airport Authority”), and [________], a [___], having principal offices located [______] (hereinafter “Concessionaire”). The Airport Authority and Concessionaire may hereafter be referred to collectively as the “Parties”, or individually as a “Party”.

WHEREAS, pursuant to the Michigan Aeronautics Code, being the Public Airport Authority Act, MCL 259.108 - 259.125c, the Airport Authority operates and maintains the Detroit Metropolitan Wayne County Airport, located in Romulus, Michigan (hereinafter referred to as the “Airport”) and has the authority to grant rights and privileges and enter into all contracts and agreements necessary to the performance of its duties with respect to the Airport; and WHEREAS, the Airport Authority requires the operation of certain food and beverage concessions in the McNamara Terminal at the Airport to serve the traveling public and other Airport visitors and has issued Request for Proposals Control No. 240757 which is referenced and made part of this Agreement; and WHEREAS, Concessionaire submitted a successful proposal to Request for Proposals Control No. 240757 which is referenced and made part of this Agreement, NOW, THEREFORE, in consideration of the premises and mutual undertakings of the parties hereto, it is agreed as follows:

ARTICLE I

DEFINITIONS AND EXHIBITS

i. “International” or “Internationally Branded”: Food or beverage Brands with access to and recognized in more than one country outside of the United States and Canada. The Brand would also be widely recognized in the United States.

ii. “Local” or “Locally Branded”: Food or beverage Brands with a street side presence that are reflective of the Detroit metropolitan area and/or the surrounding southeastern Michigan area that offer high quality products and exemplary levels of customer service that are commensurate with the Airport Authority’s concession program.

iii. “National” or “Nationally Branded”: Food or beverage sold or recognized geographically across the United States by a majority of the traveling public. The national Brand represents a prominent or established product. Customers have an expectation that the Brand produces consistent product quality and customer service, and similar pricing among its locations.

iv. “Regional” or “Regionally Branded”: Food or beverage Brands with a street side presence that are reflective of the contiguous states to Michigan (also referred to as the Midwestern United States) that offer high quality products and exemplary levels of customer service that are commensurate with the Airport Authority’s concession program.

i. “Coffee”: A type of restaurant that offers coffee, tea and other non-alcoholic beverages and light snack options.

ii. “Bar Lounge”: An area designated to include (1) bar lounge serving alcoholic /non-alcoholic beverages and food (2) space designated for the smoking of cigar tobacco only (in accordance with applicable regulatory requirements), purchased on premises or elsewhere, and the sale of cigars and accessories.

iii. “Quick Service Restaurant” or “QSR”: Restaurants known for fast, efficient, take-out-ready foods at affordable prices. They do not offer table service. QSRs are usually synonymous with fast food Concepts.

1.2 EXHIBITS LIST

The following documents are attached hereto, and together with Concessionaire’s Proposal, including all drawings, are deemed a part of this Agreement:

Discrimination Clauses

Requirements

ARTICLE II

CONCESSION GRANT; CONCESSION OPERATIONS

AND STANDARDS

2.1 CONCESSION GRANT

The Airport Authority hereby grants to Concessionaire and Concessionaire hereby accepts the nonexclusive right and obligation to operate the Concessions, which consist of food and beverage concepts, which Concessions shall be located in the Concession Premises in the Airport’s McNamara Terminal in the following spaces:

Space No.

Pkg

3-1 A/B

1) National Brand Coffee; and

Wall Street Journal & Starbucks

Temporary Vending – formerly a Be Relax Spa 2,680

2) Local or National Brand Quick Serve Restaurant

8-2 A National Brand Coffee

The spaces are more specifically identified in Exhibit A of this Agreement, in accordance with Concessionaire’s Proposal and the terms and conditions of this Agreement, commencing on the Effective Date.

Concessionaire hereby acknowledges and agrees that Concessionaire’s identity, skill, experience, financial resources, the specific character of Concessionaire’s business and the Concession, and Concession Fee, as described in Concessionaire’s Proposal, were all relied upon by the Airport Authority in reaching its decision to enter into this Agreement with Concessionaire.

Any change in the character of the Concession, without the Airport Authority's prior consent, through the Director of Concessions and Quality Assurance or his or her designee, will constitute a material default under this Agreement; however, from time to time with the prior written consent of the Airport Authority’s Director of Concessions and Quality Assurance or his or her designee, Concessionaire may be allowed, to Re-concept.

In addition, changes in technology, market trends, and/or inventory may require that supplemental or new concepts be added to a particular concession. Any concept that is supplemental or in addition to the original Concept may be approved at the discretion of the Airport Authority’s Director of Concessions and Quality Assurance.

2.2 CONCESSIONAIRE’S FAILURE TO OPEN FOR BUSINESS, OR FAILURE TO OPERATE

If Concessionaire fails to open for business on the date scheduled for opening as established through the Construction/Alteration Permit process, because of circumstances within Concessionaire’s control, the Airport Authority will suffer damages in an amount that is not readily ascertainable. In such event, the Airport Authority may require Concessionaire to pay to the Airport Authority as liquidated damages, and not as a penalty, in addition to all other charges due hereunder, the amounts set forth on Exhibit D. In addition, Concessionaire shall be responsible to pay the Minimum Concession Fee that is due and owing for each day after the date scheduled for opening as established through the Construction/Alteration Permit process, even though the Concessionaire has failed to open for business. Furthermore, Concessionaire’s failure to timely open or to continuously operate the Concession hereunder will constitute sufficient grounds for the Airport Authority to terminate this Agreement.

Once open for business, for each calendar day Concessionaire fails to continuously operate its business, in accordance with the terms of this Agreement until the end of the Term hereof, Concessionaire may be required to pay liquidated damages in the amounts set forth on Exhibit D. The Airport Authority’s waiver of a penalty in one instance shall not bar the Airport Authority from issuing a penalty or multiple penalties in the future.

i. As is outlined in the Concessions Manual, all Concessionaires are required to operate from 90 minutes before the 1st flight, until after the departure of the final flight, but at a minimum of 4:30 AM to 11:00 PM Eastern Time, seven (7) days per week, including holidays unless otherwise authorized in advance, in writing, by an authorized representative of the Airport Authority’s Concessions Department. Operational hours are subject to change at the sole discretion of the Airport Authority Concessions Department.

ii. During flight delays, diversions, or other Irregular Operations (“IROPS”), these units will be expected to operate additional hours to accommodate passengers in the nearby gate areas as directed by the Airport Authority’s representative with very little notice. These units will be expected to operate additional hours and will not be considered for early closure unless authorized by the Airport Authority’s representative.

iii. Concessionaire’s daily schedule of hours may not be changed without the prior approval of an authorized representative of the Airport Authority’s Concessions Department. At no time shall the Concession be left unattended or temporarily closed during the Concession’s business hours unless otherwise authorized in advance, in writing, by an authorized representative of the Airport Authority’s Concessions Department.

Concessionaire hereby acknowledges and agrees to comply with the Airport Authority’s Customer Service Performance Standards Policy for Airport concessions, which is designed to ensure that the traveling public and other Airport visitors receive the highest level of service. As such, the Airport Authority, or its agent, will conduct regular audits, at least on an annual basis, and at the Airport Authority’s sole discretion, more often, and may engage Mystery Shoppers to evaluate Concessionaire’s performance as an Airport Concessionaire in accordance with various standards including, but not limited to the following:

Service Standards - including but not limited to, adequate staffing levels; compliance with required business hours; compliance with the Airport Authority’s Competitive Pricing Policy, service standard audits and site reviews; maximum queuing standards; and product and service quality.

Sanitation and Cleanliness of Concession Premises - including but not limited to, adequate janitorial services for the Concessions Premises, timely repairs, and overall appearance of the Concessions Premises.

Employee Standards - including but not limited to, personal appearance of staff, including uniforms; proper identification; personal greeting and interaction with customers; general Airport knowledge; and maintenance of any required certifications or licenses.

If Concessionaire consistently performs below the minimum standards established by the Airport Authority, then Concessionaire will be subject to liquidated damages, in accordance with Section 2.9 and Exhibit D hereof, as well as be deemed in default of this Agreement, which will be subject to termination.

2.6 SIGNS

No signs or other advertising of Concessionaire’s operation may be erected or installed on the Airport, including at the Concession Premises, by Concessionaire without the prior written approval of the Chief Executive Officer, or his designee. Any approved signs must comply with the Airport’s then current signage standards.

2.7 ADVERTISING PROHIBITED

Concessionaire is prohibited from displaying anywhere at the Airport, including the interior and exterior of the Concession Premises, advertising for persons or businesses other than the Concession, except as otherwise approved by the Airport Authority.

2.8 SMOKING

Concessionaire must comply with the Airport Authority’s smoking regulations, which may be amended from time to time.

2.9 LIQUIDATED DAMAGES

Concessionaire’s failure to adhere to the operating standards identified in this Agreement will result in inconvenience to the public and will adversely affect operation of the Airport. The resulting damages of Concessionaire’s failure to comply with such standards are difficult to ascertain. Concessionaire and the Airport Authority agree that the liquidated damages set forth on Exhibit D are reasonable estimates of the actual damages that the public and Airport Authority will incur for the specified violations of the foregoing operating standards. Concessionaire further agrees to pay to the Airport Authority liquidated damages in accordance with the Airport Authority’s Exhibit D for an occurrence of the specified infractions.

In addition, liquidated damages may be collected during the Design Construction and Permit Process from Concessionaire for failure to complete the work as indicated in the proposed design and construction schedule, as agreed to and verified during the initial meeting between the Airport Authority and Concessionaire to begin the Design, Construction and Permit Process as outlined in the TDCM. Concessionaire may be required to pay to the Airport Authority liquidated damages in accordance with the Airport Authority’s Exhibit D for failure to complete each major milestone during the design phase as identified in the TDCM, and the time frame associated in Concessionaire’s schedule.

2.10 PARTICIPATION BY AIRPORT CONCESSIONS DISADVANTAGED BUSINESS ENTERPRISES

Concessionaire understands that it is the policy of the Airport Authority that Airport Concessions Disadvantaged Business Enterprises (ACDBEs) that are certified by an authorized certifying entity should have the maximum practical opportunity to participate in the competitive process of supplying services and goods to the Airport Authority as owners, managers, and concessionaires of concessions at the Airport. Accordingly, at all times during the Term of this Agreement, Concessionaire hereby commits and agrees to ACDBE participation of [24]% of the revenue generated from the Agreement. ACDBE participation is intended to be active ACDBE business sales as a percentage of the Concession’s total Gross Sales, with commensurate risk of loss. Concessionaire hereby agrees, for the Term of this Agreement, to meet the above ACDBE commitment, or in the event that the commitment is not met, to document adequate good faith efforts Concessionaire makes to meet its commitment, including all necessary and reasonable steps Concessionaire takes to achieve the ACDBE commitment, as required in 49 CFR Parts 23 and 26, including any amendments thereto.

Prior to execution of this Agreement, Concessionaire shall submit drafts of its joint venture and operating agreements with its proposal to the RFP, and shall attach provide to the Airport Authority complete executed copies of any joint venture agreements, operating agreements and/or other agreements relating to Concessionaire’s ACDBE participation commitment under this Agreement (collectively, the “ACDBE Agreements”). The ACDBE Agreements shall not be amended without the prior written consent of the Airport Authority, which consent may be conditioned upon such additional terms and conditions as may be imposed in the discretion of the Airport Authority. In the event any ACDBE Agreement is amended without the prior written consent of the Airport Authority, then any such amendment shall be null and void and of no force or effect.

Concessionaire’s failure to meet the ACDBE commitment or to provide the Airport Authority with sufficient documentation of Concessionaire’s adequate good faith efforts to meet the ACDBE commitment shall constitute a material default and will be sufficient grounds for the Airport Authority’s termination of this Agreement and forfeiture of Concessionaire’s Security Deposit, as provided for in Section 5.4 of this Agreement.

Any waiver, inadvertent or otherwise, of this provision by the Airport Authority shall not be deemed to be a waiver for the remainder of the Term of this Agreement and shall not prohibit the Airport Authority from enforcing this Section with regard to subsequent defaults by the Concessionaire.

Concessionaire may neither terminate an ACDBE nor reduce the scope of the work to be performed by an ACDBE, nor decrease the payment to an ACDBE, without in each instance (i) having just cause (termination for convenience is not permissible); (ii) making good-faith efforts to find another ACDBE subcontractor to substitute for the original ACDBE (these good-faith efforts must be directed at finding another ACDBE to perform at least the same amount of work or service under the Agreement as the ACDBE that was terminated, to the extent needed to meet Concessionaire’s ACDBE participation commitment); and (iii) receiving the prior written approval of the ACDBE Liaison Officer in all instances.

For purposes of this Agreement, an ACDBE is a business enterprise that meets the requirements of 49 CFR Part 23 and Part 26, and any amendments thereto.

ARTICLE III

CONCESSION PREMISES AND STORAGE SPACE; EQUIPMENT;

FIXED IMPROVEMENTS; UTILITIES

3.1 CONCESSION PREMISES

The Airport Authority hereby authorizes Concessionaire and Concessionaire hereby agrees to operate the Concession more precisely described in Exhibit A, which is attached hereto and incorporated.

The Airport Authority makes no warranties, promises or representations as to the economic viability of any portion of the Concession Premises and Concessionaire takes the Concession Premises in “as is” condition. Passenger counts, passenger flows and other customer traffic are relative to the airline schedules and gate utilization, and subject to change at any time. Further, FAA and TSA rules and regulations governing security and emergency situations may restrict access to the Airport.

3.2 CONCESSION STORAGE SPACE

It is understood by the Parties that a limited amount of storage space may be made available for use by concessionaires in the terminals. Concessionaire’s amount and use of any such space may be governed by a separate lease agreement between the Parties. If deemed necessary, the Airport Authority may assess a $10 charge per square foot per annum for such storage space, which may increase according to the Consumer Price Index (“CPI”).

B. Cash Control/Point of Sale Register System.

The Concessionaire will be required to install a cash control system or point of sale equipment which shall record all sales transactions, sales by category and all information necessary to provide the Airport Authority with information required in the Concession Agreement. All cash registers must have the capability to provide detailed, daily sales, as well as the ability to track sales by category. The POS equipment must be automated to download into your general ledger system.

i. Every customer must be offered a receipt of purchase

ii. Receipts used as customer call numbers must isolate and highlight the customer call number so that it is easily read by customers awaiting their orders.

iii. All facilities must accept the following forms of payment unless approved in writing by the Airport Authority:

(1) cash

(2) at least three (3) major credit cards for payments

(3) touchless pay options such as ApplePay, GooglePay, etc.

(4) All facilities must be able to accept electronic and paper vouchers (Airline vouchers, Airport Authority vouchers, etc.)

All installations must be accomplished in a professional and workmanlike manner, and must be compatible with the quality and architecture of the applicable terminal. All equipment must be new, durable, attractive, of high quality, and accepted by the Airport Authority prior to installation. Exposed conduit, wires, etc., will not be permitted within the terminal buildings. Concessionaire, at its sole cost and expense, is responsible for providing any and all construction, furnishings, and/or utilities that are not already provided in the base building, to support the Concession. In accomplishing the installation of its equipment and furnishings, Concessionaire is also responsible for repairing any damage to construction in the terminal that is already built or placed, or for paying the cost of such repairs by others.