New board members are often experienced business leaders with impressive credentials and deep expertise in their respective industries. These individuals typically assume their roles on the board with the best intentions – to improve their clubs and strengthen financial performance.
Unfortunately, many enter the boardroom with a critical assumption that “losses” in food and beverage (F&B) operations represent a business flaw caused by inefficiency or inadequate oversight. This assumption is what we refer to as the “F&B Trap.” It reflects a lack of data-driven understanding of the private club business model. Historically, phrases such as “clubs are in the dues business” or “F&B is an amenity, not a profit center” have been widely repeated, but these statements lacked the empirical context necessary to have a meaningful impact on governance and management.
Over the past 15 years, Club Benchmarking has addressed this gap by aggregating, standardizing, and analyzing data from nearly 1,200 clubs annually and approximately 300 clubs monthly. Since 2009, we have collected comprehensive year-end financial results and, more recently, monthly data on membership, cost of belonging, initiation fees, and financing. This extensive dataset has revealed the true drivers of financial success in private clubs and provided strategic context for understanding F&B outcomes in relation to overall financial health. These insights often contradict the profitability mindset that dominates discussions in boardrooms and grille rooms across the industry.