F&B Outsourcing vs In-House Decision Model: Outlet Lease or Operate NPV Spreadsheet

Full description

For general managers, F&B directors, finance managers and owner representatives who must decide whether to keep an outlet in-house or hand it to a third-party operator. The workbook sets three actual years of the outlet, fully loaded with overhead, against a fixed rent, a percentage of sales and a hybrid deal. It builds ten-year cash flows with step-ups and an inflation check, runs 3 scenarios x 4 options as 12 one-per-row cases, and returns NPV, IRR, payback, rent yield, expected NPV, a risk-adjusted NPV and the break-even sales for each deal. A scorecard adds brand, quality, flexibility and staff impact, and a diligence log tracks the open items. A companion term sheet workbook tests one offer for operator affordability, and a 10-page guide explains the method with a worked example.

What is inside

• Outsourcing_vs_In_House_Model.xlsx: 12 tabs, 1,051 formulas, 2 native charts, 24 drop-down and input rules
• Baseline with three actual years and a test that the model reproduces the latest one
• Deal Terms: three offers, one-off and kept costs, and a 10-year step-up schedule with an inflation flag
• Cash Flows and Cases: 12 cases, one per row, with expected NPV, standard deviation and risk-adjusted NPV
• Sensitivity: 3 grids (rent x sales, discount rate x sales for two deals) and break-even sales for 3 deals
• Scorecard with 8 weighted factors, Diligence log with 22 items and 8 spare rows
• Dashboard with 7 tiles, a check tile and 2 charts; 12 integrity checks; Method tab with 14 documented calculations
• Outsourcing_Deal_Term_Sheet.xlsx: 4 tabs, 250 formulas, 4 rent structures, a 10-year rent schedule, an affordability test and a printable term sheet
• Outsourcing_Decision_Guide.docx and PDF: 10 pages with equations, a worked example read from the workbook, deal terms, an approval pack and a checklist
• README.txt and LICENSE-and-Terms.txt

How it works

1. Enter three actual years of the outlet on Baseline and set rates, costs and the three scenarios on Assumptions.
2. Enter each written offer, the hotel capital, the costs the hotel keeps and the step-ups on Deal Terms.
3. Select a scenario and read Cash Flows, then read Cases for expected and risk-adjusted NPV across all scenarios.
4. Use Sensitivity for break-even sales, score the qualitative factors on Scorecard and work through Diligence.
5. Test one offer on the companion term sheet and print it for the owner meeting.

Details

• Formats: 2 Excel workbooks (.xlsx), 1 guide in Word (.docx) and PDF, English
• Software: Excel 2016 or later, or LibreOffice Calc 7 or later
• No macros, no external links, no data tables, no array formulas
• 4 files plus README and license; instant digital download

Good to know

• Sample data is illustrative. Replace it with your own figures.
• The files are planning tools, not financial, tax or legal advice. Verify local requirements and have a lawyer review every clause before signing.
• Results depend on your sales scenarios and cost split. Use the Low case and the sensitivity grids to see how far a forecast error moves the answer.
• Single-user license. Do not redistribute.

FAQ

How does it compare a fixed rent with a percentage deal?

It runs ten-year cash flows for each deal on the same sales path, takes off the costs the hotel keeps and discounts them. Fixed rent follows your step-up schedule, percentage rent follows operator sales, and the hybrid pays a base plus a share above a breakpoint.

What does risk-adjusted NPV mean here?

Expected NPV across Low, Base and High, less a risk aversion factor times the standard deviation. You set the factor and the probabilities.

Is overhead included in the in-house case?

Yes. The full overhead allocation is charged in-house. Only the stranded share is charged against a deal, and you set it.

Can I use my own scenarios, rents and step-ups?

Yes. Scenario drivers, offers, step-ups, kept costs and scorecard weights are inputs. The Baseline tab tests the model against your latest actual year.

Does the term sheet workbook work on its own?

Yes. Enter one offer to see ten years of rent, an operator affordability test and a printable term sheet.