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The purpose of this paper is to provide an in‐depth examination of the outsourcing of food services on a university campus.

The paper uses a detailed case study including interviews with university administrators, contractor administrators, and students and background information taken from student satisfaction surveys and local newspapers.

A new set of challenges has arisen – both for the university and the corporate partners providing the outsourced services. On the one hand, universities need to ensure the delivery of high‐quality services while operating under increasing fiscal pressures. And, on the other, corporate partners are dealing with unique issues at every different institution they serve, ranging from local competition to labor availability and serviceability and low margins, among others.

This case study examines the events at one private university located in the mid‐Atlantic region in the USA. While many of the findings may be applicable in a variety of settings, it is not possible to draw direct inferences from a case study.

As outsourcing increases at universities, administrators need to consider the unique aspects of the local environment – with respect to labor availability and wage structure, the student population and their relationship with the contracted employees, the surrounding community and the interplay among the local residents, the contractor, and its employees – as they develop the contract and structure long‐term agreements.

Empirical studies have examined broad trends in outsourcing at universities; this research provides valuable insight into specifics – and the insights are instructive to administrators who are in charge of managing the outsourcing.