Title
Consider/Discuss/Act on a Resolution Authorizing the City Manager to Execute a Concession Agreement with Compass Group USA, Inc., by and through its Canteen Division, for Airport Automated Vending Machine Concession Services at McKinney National Airport
Summary
COUNCIL GOAL: Maximize the Development Potential of McKinney National Airport
• 3.1: Implement initiatives and strategies, including public-private partnerships, to attract and expand corporate and commercial aviation including the viability of passenger service.
MEETING DATE: October 20, 2026
DEPARTMENT: Airport
CONTACT: Kenneth Carley, A.A.E. - Airport Director
Porter Burns, C.M. - Airport Financial & Operations Analyst
Tracey Epps - Procurement Services Manager
RECOMMENDED CITY COUNCIL ACTION:
• Staff recommends City Council approve the Resolution
ITEM SUMMARY:
• This Resolution authorizes the City Manager to execute a Concession Agreement with Compass Group USA, Inc., by and through its Canteen Division, for automated vending machine concession services in the McKinney National Airport Commercial Terminal. This is a revenue-generating agreement under which the City will receive a Commission/Concession Fee based on the concessionaire’s Gross Revenues.
BACKGROUND INFORMATION:
• The scope of the project is to select a qualified operator to provide, install, operate, and maintain automated vending machines in the new McKinney National Airport commercial terminal, offering beverages, snacks, fresh food, and health and wellness/personal care items to passengers, employees, and visitors on a 24/7 basis.
• The City issued a Request for Proposals (26-38RFP) to solicit responses from qualified vendors for Airport Automated Vending Machine Concession Services on July 17, 2026.
o Advertised in the McKinney Courier Gazette and Celina Record
o Posted on McKinney TV
o 560 matching supplier notifications
• Out of 560 supplier notifications, Twenty (20) proposals were received and opened by Procurement Services on August 27, 2026.
• Five (5) of the proposals were deemed non-responsive and eliminated from the evaluation process.
• An evaluation team comprised of staff from the Airport and City Manager’s Office reviewed the remaining fifteen (15) proposals based on the following criteria:
o 20 Points: Qualifications and experience
o 40 Points: Equipment, operations, and management plan
o 40 Points: Pricing structure
• The proposed program consists of five (5) Canteen-owned automated vending machines installed at no cost to the City: three (3) post-security machines (beverage, an AI-enabled Intuitivo fresh food market, and medicine/health and wellness) and two (2) pre-security machines (snack and snack/beverage).
• All machines accept cashless and contactless payment and report sales, inventory, and temperature through real-time telemetry. The program is supported by a North Texas-based service team with a four-hour service response standard, restocking a minimum of four to five times per week initially, and Canteen Connect labels on every machine for refunds, service requests, and nutritional information.
• The Concession Agreement will provide for the City to receive a flat Commission/Concession Fee on Gross Revenues (excluding sales taxes separately collected and remitted) from the start of commercial service, applied equally across all product categories. The proposed rate is more than three times the RFP’s 10% minimum:
o Beverages = 31.4%
o Snacks and Fresh Food = 31.4%
o Health and Wellness/Personal Care = 31.4%
• The agreement is proposed for a three-year initial term with two, one-year extensions, for a total term of up to five years. No Minimum Annual Guarantee is required under the proposal.
• Canteen will furnish, install, and maintain all equipment at no capital cost to the City, and commercial service is anticipated to begin November 11, 2026. Product pricing will be benchmarked against local and airport-market prices, and any pricing changes are subject to review and approval by the Airport Director.
• The evaluation team is recommending award of a contract to the highest ranked respondent, Compass Group USA, Inc., by and through its Canteen Division.
FINANCIAL SUMMARY:
• This is a revenue-generating agreement. No City funds will be expended under this agreement; the City will receive a Commission/Concession Fee of 31.4% of the concessionaire’s Gross Revenues.
• Based on the Airport’s projected enplanements, the proposal estimates the following annual commission payable to the City:
o Year 1 (approximately 130,000 enplanements) = $78,469
o Year 2 (approximately 290,000 enplanements) = $175,045
o Year 3 (approximately 450,000 enplanements) = $271,622
• These figures are good-faith estimates only; actual commission will vary with passenger activity, product mix, and terminal ramp-up. The Year 2 enplanement figure is the proposer’s straight-line interpolation between Years 1 and 3. The proposal estimates total commission to the City of $525,136 over the first three years, with annual commission more than tripling from Year 1 to Year 3.
BOARD OR COMMISSION RECOMMENDATION:
• N/A