PRIVATE CLUBS Four Major Categories:  Country Club  City Club  City Athletic Club  Yacht Club

Country Club Usually refers to a club in the suburbs with:  Clubhouse  Golf Course(s)  Tennis courts  Swimming pool(s)  Other recreational activities  Recent 5 year trend ….. To have a fitness and health center

City Club Is typically a dining club located in the city:  May be in a free-standing building by itself or in an office building, etc.  Main dining room, meeting rooms, lounge, and maybe a ball room.  Very formal service and upscale menus for business entertainment.

City Athletic Club Is the same as a city club, but with athletic amenities such as:  Tennis courts (indoor and outdoor)  Swimming pool  Fitness/athletic area including weights & aerobic equipment  Racquetball, squash, basketball, etc.  Workout/aerobic class area  Locker rooms with full amenities

Yacht Club Same as country or city-athletic club, but with marine activities and usually no golf.  Located on body of water  Powerboat or sailboat docking  Marina services

What is the purpose of a private club? It is a specific place where one may associate with one’s peers or those with similar interests: athletic, social, industrial, intellectual, etc. It is a selected group of people who gather in a specified place for social and recreational needs that are provided through professional management.

Why do people join private clubs? Networking for business contacts Social status Fine dining Athletic facilities

Two underlying reasons always exist: To be recognized To have fun

Characteristics of a Private Club Club has an established, stable clientele:  Deal with the same customers day after day, week after week, year after year.  Fixed clientele requires that menus be changed more frequently than restaurants, and there are a variety of holiday celebrations.  Inventory in the pro shop must be turned over regularly.

Privilege of using club facilities is obtained through payment of dues.  Therefore, food must be outstanding or better than fine dining restaurants for city clubs and be priced competitively or lower than 4 star restaurant quality.  The F&B operation is subsidized in part by the dues.  Expectations at a 4 star restaurant include: table cloths, linen napkins, special china, fresh flowers, better than average service, immaculate grounds, and a unique menu. Characteristics of a Private Club

A Club Manager is expected to know a variety of things in club management:  F&B operations for fine dining  Cost controls  Membership relationship  Board of Directors politics  Golf course agronomy and operations  Tennis programming and maintenance  Swimming pool safety and sanitation Characteristics of a Private Club

Club Ownership Types Member owned (equity)  The members own the assets, they have rights to the club’s equity, like shareholders.  Governed by a board of directors (typically 10 to 12), but some are as low as 4 and as large as 50 directors.  A membership has one vote on issues that are mandated by the club’s bylaws.

Member owned (equity) - cont.  Depending on the state’s legal climate for ownership in a business, some clubs issue a bond to members and those with bonds can vote or redeem it for a set value.  Most of the old established clubs are of this format.  In order to maintain a club’s tax exemption, the IRS measures whether a club is a true private club by seeing if it allows non-members to use the facility by paying an admission fee. Club Ownership Types

Proprietary (for profit)  Owned by an individual, partnership or corporation.  Members have no equity interest or actual control over its operation.  Developer built clubs and CCA clubs are examples of this type.  These clubs pay income tax and don’t have abatements or lower rates on local taxes such as property tax.  Some developer clubs revert to member owned when a certain number of homes are sold (e.g. 75%) Club Ownership Types