The Company:
Sodexo (earlier Sodex ho) is a French food services & facilities management corporation. Founded by Pierre Bellon in 1966, this $21 billion company has presence in over 30,000 sites across 80 countries. Sodexo's business entails catering food, offering services like maintenance repairs, secretarial & reception, housekeeping, health & wellness and many more. Sodexo is more familiar to Indian consumers as the Service Vouchers and Cards company or rather commonly for its Meal Pass & Cards.
Sodexo India provides Food Services to Manufacturing unit of Hyundai India, Chennai
Sodexo India provides Facility Management Services to Wipro (since 2004)
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The Product: Meal Pass
Meal Pass is a prepaid voucher to be utilized for a preferred meal. This meal voucher system allows an employer to extend the meal benefits (pre-decided mutually by the employee & the employer) to its associates. The business model is a kind of barter system wherein each entity exchanges the meal pass with the subsequent entity in return for the payment, goodwill or services rendered. The brief pictorial depiction of the model is as shown below:
The Attributes:
#1. The Meal Vouchers are exempted from Fringe Benefit Tax (FBT).
#2. Sodexo Meal Vouchers (issued monthly or annualy) carry a validitity of one calendar year (till 31st Dec) and the vouchers issued after 1st September is valid till the end of subsequent year.
#3. Sodexo Meal Vouchers are available under convenient denominations of Rs. 10, 20, 35, 50 and 75.
#4. These vouchers come with value added offers like 'scratch & win', 'value pass - discounts', etc. which adds to the tax benefits availed.
The Benefits:
- To Sodexo: Nominal commission (app. 1.3%) in return for the delivery of meal-vouchers
- To Employers: Employee goodwill & motivation
- To Employees: Tax exemption, attractive offers and hassle-free transactions
- To Affiliates: Assured customer base & loyalty redemption. Also publicity through ads
The Drawbacks:
- The Meal-Pass is non-transferrable i.e. It can only be used by the person in whose name it is availed. As per my experience, it can be used by anyone from friends & relatives to beggars & anyone who steals it
- Sodexo Meal-Pass is valid only for ready to eat items, food & beverages in the affiliated network. Although, I have exchanged the Sodexo meal pass for groceries, chocolates and even a shaving razor.
- It serves as a high-exhaustive income and with a mindset to dispose the voucher booklet in a stipulated time one tends to spend more.
- Sodexo meal voucher may not be useful for the singles who pay up for the meal goods/services rather than buying on own.
- Despite the wide network of affiliates, one might have to be forced under compulsion to avail the benefits.
Ratings: 4/5 couponsSodexo ranked amongst top three Global Outsourcing 100 companies.
Disclaimer: The Sodexo Meal pass is reviewed solely based upon my personal experience and facts cited on official Sodexo portal. The write-up/material used on this blog is free for use with due acknowledgments to http://www.relyonreviews.blogspot.com/.
Hi Ravish, Good description..
ReplyDeleteBut three major drawbacks of the Meal pass..I think I should add here:
1. It is NOT valid in all outlets.. only those that are affiliates of Sodexo.. Some of the better hotels / supermarkets therefore are not part of this.
2. The "affiliates" do not give change if we give sodexo.
3. Can be pretty embarassing when you are counting out coupons and there is a huge queue behind you..
Also the benefits to Sodexo is NOT just the nominal fee of 1.6%. THey make loads more than this.. Companies have to pay Sodexo the coupon amount + the commission of 1.6%. Lets assume this happens on day Zero. Employees get the coupons on Day 5 and they start spending.. some take 2-3 months to sepnd.. Lets assume for the sake of calculations.. employees spend all coupons by day 30. Now the affiliate submits these to Sodexo who reimburses after 30 days.. so day 60. Now if Sodexo gets interest free money for 60 days.. see how it benefits the working capital. And we are not talking lakhs.. but crores available interest free for 60 days.. assume just a minimal 3% interetest rate.. add the 1.6% commission.. Sodexo has a profit of close to 5% MINIMUM.. direct costs involved - printing booklets!!
That's again a good review. I do agree with the comments from "Kool like that", on the some of the drawbacks, the last one is prety neat lolz..
ReplyDeleteBut for a review, I do not think it is anywhere necessary to show how much profit a company is making, but "how good is the product/ service, which is being reviewed"
Sodexho I feel has more advantages than disadvantages. It is far better than the meal card which are issues by many companies now a days.. there is no daily spending limit cap on Sodexho you can spend the entire booklet in one outing.. however the meal card has a cap of Rs 100 per day (recently revised by gov from Rs 400) which is too little, keeping in mind the food outlets we go.
@ Nimalan - Neat Analysis. I feel I should have included little more on the biz model. Their cost-analysis model is worth studying.
ReplyDeleteTo overcome the 3rd drawback, I feel the Sodexo Meal Card with its own set of drawbacks might be handy.
Other alternative to escape the 3rd drawback is to preserve the coupon booklet & throw a bash with a budget equivalent to the booklet. Just handover the booklet instead of counting coupons to pay the bill.
@ Darshan - I guess making a partial payment by card and rest by cash is equally embarassing.
ReplyDeleteNice information. Thanks for sharing the article in the blog.
ReplyDeleteThank you for your valuable and useful information through the blog
ReplyDeleteSodexo Card Activation
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