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Contracting with a Food Service Management Company

Organizations operating a Child Nutrition Program have the option to contract with another organization or Food Service Management Company (FSMC) to manage day-to-day operations. When contracting for food service management services, it is important to ensure you are following all federal, state, and local regulations. If you have any questions, please contact Conor Floyd, Grant Programs Manager at  

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Meal Equivalent Factor  

School Food Authorities (SFAs) and FSMCs use the Meal Equivalent Factor (MEF) to calculate the number of meal equivalents the FSMC may charge for non-program revenue. SFAs should use the MEF to confirm invoices are correct. The Agency of Education calculates the MEF using USDA rates and updates the MEF every year. 

SFAs should use the Meal Equivalent Factor in all Food Service Management Company (FSMC) and Vendor contracts with a base year of School Year (SY) 2022-2023 and later

Applying the MEF 

You can determine the number of meal equivalents by dividing the total nonprogram revenue by the MEF. Nonprogram revenue includes adult meals, a la carte meals, snack bar, catering, and vending. For the purposes of FSMC contracts, a la carte includes all foods and beverages sold to students that are not a component of a reimbursable meal. All foods and beverages sold to adults at any time are nonprogram revenue. 

Let’s look at an example of how the MEF is applied. In this example, the FSMC is contracted to provide meals to the SFA for $3.80 per lunch. The MEF for that year is $4.86. The FSMC sold $200 in a la carte sales during the month.  

$200 (a la carte revenue) / $4.86 (MEF) = 41.15 Meal Equivalents  

41.15 Meal Equivalents X $3.80 (contracted price per lunch) = $156.37 paid to FSMC 

In this example, there was $200 in a la carte revenue. Of that, the SFA paid $156.37 to the FSMC. The SFA was left with a $43.63- profit.  

Current Meal Equivalent Factor 

MEF = Prior SY Severe Need Plus 8 Cents Lunch Rate + Prior SY USDA Foods Estimated Effective Rate 

School Year 

Meal Equivalent Factor 







FSMC Monitoring 

SFA's that contract with FSMC's must conduct annual monitoring. SFAs are required to complete one FSMC Monitoring Form. Each SFA with more than one school/site must conduct an on-site review of the National School Lunch Program at all schools/sites, and an on-site review of the School Breakfast Program at 50% of the schools/sites.  

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