Food Service Solutions, Inc.

FSS™ POSitive ID System III

How FSS-POSitive ID System III will increase
free and reduced participation, federal reimbursements,
E-rate and most importantly " feed more kids"

Is your school lunch program over-budget or mired in red ink? Is your high school free and reduced participation 20%-40% less than the elementary schools? Are your students forced to wait 10-15 minutes in line . . . then gulp their lunch? Is participation declining so fast you are ready to turn the lunch program over to an outside contract feeder? Is your school district losing tens of thousands of dollars per year in E-rate and National School Lunch reimbursement because the kids just won’t eat?

If your answer is yes to any or all of the above then I urge you to read this letter immediately.

Find out right now how to feed more kids and turn your school district’s school lunch program into a profit center. Successful school lunch programs self-fund or even contribute to the general fund-not lose money

The National School Lunch Program is a $5.3 billion entitlement program overseen by the USDA. This year there are nearly 27 million K-12 students. Over 57% of US students qualified for free or reduced lunch under the USDA’s guidelines. In many school districts throughout the country, the lunch program is ineffective, and in some areas, failing miserably.

In Detroit, the city’s public school district loses $17.6 million in federal funding because the food service is underused, primarily by high school students who qualify for subsidized meals. More than 83% of the Detroit high school students eligible for federal aid choose not to eat a free lunch. Part of the problem, school district officials and students alike concede, is the social stigma attached to free-meal tickets and part due to menus and food quality provided by the district that the student finds unpalatable. This stigma and attitude toward "free lunch" have students opting for a bag of chips and a can of soda from vending machines. Just 40% of those eligible for a free lunch bothered to fill out the application, further burdening the district by reducing E-rate reimbursement, Title I and other subsidy programs which are directly tied to the free and reduced application process.

Source Detroit News

What stigma is attached to your school district’s free and reduced program? At the high school, students don’t want to be categorized as free or reduced. Read poor. Once the application is processed by administration the words "free" or "reduced" should never be associated with the individual student.

What is the community perception of the free and reduced lunch participant in your district? If it is in any way viewed negatively, the school district, taxpayers and students suffer. Hungry kids don’t learn!

1999 Facts and Figures from the USDA and US Census Bureau

State	1999 Lunches Served	Total Lunch Reimbursement	1999 Per Lunch Served Reimbursement	State Median Income	Children Under 18 Poverty %
NY	290,851,426	$ 392,274,396	$1.35	$39,139	25.4%
CA	477,854,702	$ 730,590,649	$1.53	$42,791	24.3%
MD	64,224,286	$71,926,492	$1.12	$49,790	13.2%
WV	32,289,412	$37,547,104	$1.16	$28,363	30.0%
VA	108,122,559	$102,457,875	$ .95	$45,031	15.9%
OH	157,252,470	$149,740,851	$ .95	$39,701	15.9%
IL	168,385,692	$211,596,592	$1.25	$45,262	18.5%
PA	168,316,681	$163,580,647	$ .97	$38,936	17.3%
US	4,513,167,413	$5,314,255,495	$1.18	$41,227	20.8%

Source US Census Bureau
Source USDA

How does your school district stack up? Take your total reimbursement dollars for lunch and divide it by the total number of lunches served (paid + free + reduced). The average lunch reimbursement was $1.18 in 1999 with a poverty level of 20.8%. It is hard to explain why a state like West Virginia with over 30% of their under-18 population living in poverty (US Census), receives nine cents less per meal than Illinois. A dime in West Virginia amounts to over $3 million dollars. A dime in Pennsylvania over $16 million. Could it be that like Detroit, the students fail to sign up for the free and reduced program due to peer pressure or inefficient application processing-and those that do qualify, fail to eat?

Do the math. How much is a dime in your school district? These are federal reimbursement dollars that will go a long way toward making your food service operation self-sufficient.

What’s is worth to your school district to feed more kids? Let’s take a look at the impact of increasing your district’s free participation by 5%. In a district with 4000 students feeding only 20 more students per grade yields significant results.

Your Urban School District	Your Rural School District
Enrollment 4000	Enrollment 4000
5%= 200 Students	5%= 200 Students
Reimburse $2.21 per lunch	Reimburse $2.02 per lunch
Days 180	Days 180
$ 79,560.00 additional revenue	$72,720.00 additional revenue

The additional reimbursement can be used to pay for salaries, food or other administrative costs. Create a surplus and improvements in food service such as food quality or menu variety result again in increased participation and reimbursement.

A synergism is created that will allow your school district to feed more kids. This increases reimbursement and spent wisely leads to an increase in food quality and/or reduction of costs. The process can be repeated over and over again. A win-win-win solution. Our three-step success formula is guaranteed to turn red ink to black and dramatically transform your food service operation.

Step 1 - Take a positive and proactive approach to the USDA free and reduced lunch program

• Find out what your free and reduced rate "should be"
• Set goals to increase participation by increasing applications
• Proactively promote program within both the school and the community (why fill out a census form?)
• Encourage parents to fill out the form (market the program)
• Use FSS™ F.O.R.M.S. to process free and reduced applications
• Use a family form and cut done on paperwork
• Find the kids that qualify and get them signed up on time
• Involve parents, administration and everyone with a stake in Title I, E-rate, building-district grants and No Child Left Behind (all based on poverty)

FSS™ F.O.R.M.S. processes free and reduced applications in seconds. The software works over a network with your existing student database to recognize members of the same household through "peer recognition". Whether you process the forms centrally or at each school in the district the software saves time, increases accuracy and helps insure you find every qualified student. Type in the phone number on the application and every member of your student database with a matching phone number appears on the screen. If the student is not on the form but lives in the family you do what it takes to get him/her in the program.

• Processes multi-child forms with one entry saving time and increasing accuracy
• Utilizes existing school database--get started today and feed more kids
• Thin client server database connects over your Wide Area Network--connect school to school--one entry per household--one database
• Peer recognition by name, phone or address--qualify every member of household with one entry and feed more kids
• Prints approval-denial letters, labels, rosters--flags expected applicants, reminders to previous qualifiers, student history
• Updates paid, free or reduced status to FSSä POSitive ID

Completed all of my free and reduced applications in record time. The software is easy to use and the peer recognition helped me identify and qualify thirty kids who were not on the original applications. It made the job "almost fun".
Milt Miller, FSD, Penn Cambria School District, Cresson, PA

Using F.O.R.M.S. really helps when you have students from the same household with different last names. Having the entire student database to work with allowed us to enter household and income information easily and accurately and qualifying some extra kids via peer recognition was like finding lost money. We even sent letters to those whom qualified last year but failed to submit a form this year and got a response from almost every letter we sent. We are taking the positive proactive approach .
Chris , FSD, Moniteau Area School District, West Sunbury, PA

Step 2 - Create the highest perception of confidentiality for both students and parents

• Debit accounts level the playing field. Who’s free? Who’s reduced? Who’s paid? Who cares--if no one knows?
• Keep student information proprietary. "Are you a free lunch student?" might just ruin a student’s day, week or self-esteem
• Get cash out of your school lunch line. The last time you handed the clerk at any store a twenty for a $1.25 purchase it took both of you over 20 seconds to complete the transaction. Check it out sometime. And you expect 200 students to get through two lunch lines in 10 minutes. No wonder so many kids don’t eat.
• Put parents in control of the lunch money. On average, one dollar in five, given to students as lunch money never makes it to the cafeteria. Feed more kids.
• Student ID cards get lost, stolen or destroyed. On average, over 70% of the student body will need their card replaced each year.

FSS™ POSitive ID is receiving extremely high marks from both students and parents in providing anonymity. Compared to lunch tickets, plastic cards or PIN numbers the Sagem-Morpho biometric scanner has the highest perception of confidentiality and the student won’t lose, forget or have to look for a finger. The image is not retained and the scanner identifies using an algorithmic formula.

Not ready for biometrics? POSitive works fine with a PIN or card and incorporates pictures.

• FSS™ POSitive ID works on a wide area network using thin client-server database--student can eat in any building in the district.
• Eliminate data transfers, merging, dumping, moving, exporting or importing. Safe, simple, secure, easier to manage and maintain. Comprehensive central office control.
• Client-server applications use existing wide area network technology and TCP-IP connectivity. Nonproprietary. Utilize existing server, LAN/WAN and off the shelf hardware-PC based.
• Sagem-Morpho biometric scanner uses CAT-5 cabling and client-server technology. One database per district. Any student can be identified in any building.
• Separate lunch and a la cart debit accounts. Parent controls how student will spend the money.
• Never forget it, lose it or misplace it. Biometric scanning is fast, safe, easy, secure, high tech and expandable. Students spend less time in line and have more time to eat. Your district increases reimbursements, E-rate and feeds more kids.

We increased our high school free and reduced participation by 5% last year once we put the system in. The kids move through the line faster and really like the high tech biometric technology. Not even the cashiers know who is free and reduced and the kids sense this. We have utilized the extra reimbursement to improve our food quality, which helped increase participation and we are feeding more kids.
Dr. Russell Strange, Superintendent, Penn Cambria Area High School, Cresson, PA

Finally a company who is really listening and designing a system to meet my needs. Food Service Solutions really does what they say they are going to do and so far we are extremely pleased with the results. I’m looking forward to implementing everything they can provide. What impresses me most is their "customer first" attitude.
Jack Koser, FSD, Lower Merion School District, Balacynwyd, PA

Step 3 - Simultaneously increase quality and decrease costs

• Isolate losses due to improper portioning, waste, spoilage, theft, overproduction, vendor overcharges, poor purchasing practices, cooking errors, inferior yield, improper receiving practices and employees who are not following recipes. The average increase in profit is 5-6% in restaurants and 6-10% in institutions.
• Comply with SMI (School Meal Initiative) to create standardized recipes, production sheets, offer versus served plus . . . . .
• Cost per meal served; separate a la cart and school lunch tracking and USDA perpetual inventory.
• Close the door on "open purchase orders" and bid food, paper, chemicals and supplies electronically as frequently as once a week.
• Create a formula for success and develop a system which insures profitability
• Use a system that with 20 years of research and development and is used by successful food service operations like Sodexho-Marriott, Wackenhutt, Great American Restaurants, Chartwell and hundreds of independent college and K-12 food service operations.
• The more you look, the better FOODCO looks

Throughout Food Service Solutions’ 15 years of servicing both the retail and institutional food service industry we have focused our efforts on implementing systems to "recover lost profits" for our clientele. To this end we have taken the McDonald’s approach to the food service industry.

When Ray Kroc started McDonald’s in 1955 he was not interested in selling hamburgers, fries and shakes but on selling franchises. In order to do this he had to establish systems that allowed minimum wage employees to consistently produce the perfect McDonald’s burger, fry or shake--perfect turn key operations. Kroc realized that by creating systems that could be replicated by his franchisees they could get the same results as the perfectly running model--every hour of each day, every week of the year. There are now 13,000 McDonald’s using the system Ray Kroc developed. It is the most successful food service operation in the world and most franchisees don’t work in their business. They don’t have to. The systems do the work and they work the system.

To reach your full potential in your food service operation you need to approach your business in much the same way as Ray Kroc. You need to control your business through systems so it can produce remarkable results in the hands of average people.

"How can I get my food service operation from where it is now, to where I want it to be?" Here’s how . . .

Food Service Solutions provides the expertise to help you reach your goals. We have professional consultants and user friendly technical support staff. We have software, systems and innovative processes to assist you from creating policies and procedures to management development. We help you understand why something is or is not working and help create, market and implement change if needed.

• Turnkey inventory, recipe and cycle menus complete with preparation instructions (get started instead of get to work)
• E-commerce vendor updates for weekly bid based purchasing using a maintenance free cross referenced inventory data base (puts you, the buyer in control of the purchasing process)
• Service-support includes meeting your goals, expectations and desired results. (Partnership for $UCCE$$)

FOODCO is our best new hire of the year for 2002! Managers tell me we are saving $20.00 per day in waste alone at each site.
Greg Hummel, FSD, Derry Township School District, Hershey, PA

Since implementing your system in 1989 we have saved hundreds-of-thousands of dollars. The decision to partner with Food Service Solutions was one of the best business decisions I have ever made.
Ron Lynn, Owner, The Dream Restaurant, Hollidaysburg, PA

Although we have only the inventory-purchasing-receiving modules in place our bottom line has improved by 1.3%. We used to think that buying from a prime source was best for us, but no more. Our volume approaches $60 million a year and when you translate the savings the system paid for itself within a few months. This year my goal is to utilize the menu forecaster for production in all seven restaurants. I’m looking forward to it.
Chris Osborn, CFO, Great American Restaurants, Falls Church, VA

Last year in addition to putting in FSS-POSitive ID I spent a month getting the information together for Food Service Solutions to implement FOODCO. I now run six schools from a central location. I can produce real purchase orders based on weekly competitive bids; do production sheets and record my attendance with offer versus served. We are buying for less, throwing less away, creating the right menu mix based on real time costs and simultaneously increasing quality, participation and variety. I worked in food service at some major colleges/universities and this system is heads and shoulders above anything else I’ve ever used.
Milt Miller, FSD, Penn Cambria School District Cresson, PA

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