GolanGate: The Story Behind Golan’s Recent Exit From YU’s Caf Card
Golan Heights stopped accepting Yeshiva University “Caf Card”’s omni dollars as payment for its food services.
The Israeli-style restaurant has been under contract with YU for almost half a decade, agreeing to let students spend an allotted amount of money, which YU calls “Omni dollars,” from the school’s meal plan at local participating restaurants. That is, up until this past week.
The news that Golan stopped accepting the Caf Card surfaced Monday evening, February 8, when University Dean of Students Dr. Chaim Nissel sent an email notifying students of the development.
Students met the news with shock and curiosity--understandably so, as the restaurant is consistently filled with Yeshiva students. It serves hundreds daily for lunch and dinner on the Wilf Campus, and is an especially popular location for friends to grab a bite together on weekends.
“It's an unfortunate situation,” shared Benny Aivazi, a junior in Yeshiva College. “Golan is a routine meeting place for me and my friends. Especially on late Saturday nights, the place is always packed with YU and Stern students.” Benny added, “I’m also intrigued as to why Golan pulled out of their deal with YU. It seems like it [the deal] only brings them more business.”
A student even more frustrated with the situation is Stern senior Molly Pocrass. She remarked, “I just don't understand how they could make such a decision that will affect them this adversely. That restaurant is a very big hangout spot and now, many people won't be able to go, including myself.”
Of course, students will still be able to order their favorite meat dishes from Golan for an occasional meal or when they want to catch up with a friend. However, they will now need to pay with actual cash, as opposed to utilizing the portion of the meal plan specifically allocated for use at various eateries nearby the Wilf and Beren Campuses.
Despite the recent removal of Golan from the Omni Plan, students will continue to be able to spend these funds at the other nearby restaurants -- Chop-Chop, Lake Como Pizza, and Grandma’s Pizza --, in addition to Just Kosher Market.
The premise of the contract between YU and Golan, as with all other participating restaurants, was meant to create a “win-win” situation for both parties. By YU designating these Omni funds away from its own cafeteria’s dining program, those outside businesses involved in the deal would surely see a spike in customer volume. In exchange, YU would take a 15% cut of every purchase made with Omni dollars, as the university was somewhat responsible for the increase of business that its students contributed to.
However, the real win, perhaps, belonged to the students, who now had access to more options during mealtimes, which would all be tax-free through the university’s program.
While this joint meal plan has provided benefits to the university, the local restaurants, and, of course, the students, it has also fueled a conflict that is just now beginning to surface.
The relationship between YU and Golan was indirectly rifted by YU’s Wilf Student Life Committee, or SLC, when it recently started providing students access to their Caf Card balances and transaction history online. One of the SLC’s Senior Co-Chairmen, Ariel Ancer, described the “eAccounts” as a way to help students budget their cafeteria money, and better keep track of previous food purchases that were made.
While those were the true intentions of extending accessibility of these accounts to students, the gesture actually accomplished far more.
One student, who wished to remain anonymous, was looking through his account a few weeks ago, when he astutely noticed that his recent Golan purchases had been wrongfully taxed. At first, he wasn’t completely sure whether or not Golan was able to charge tax. After some investigation, he discovered the fact that universities, like all nonprofits, are exempt from paying federal corporate income taxes as well as state and local sales taxes. And because the partnership deal between Golan and YU is run through the university, any purchase made on a Caf Card at the restaurant should be tax-free.
The student described his discovery: “I found it very odd that I had been taxed on multiple instances by Golan in a short period of time. I would’ve understood if it happened once by accident because I’m sure they get many orders paid for by cash or credit card.” He continued, “I grew very suspicious of the situation as the tax charges seemed intentional, but I didn’t make any accusations.”
Instead, the student notified the Office of Student Life and Dean Nissel, who then forwarded the message along to the Department of Food Services.
Dean Nissel commented regarding the situation that “the University simply wants to protect students’ money.”
Although Director of Food Services Bruce Jacobs and Director of Administrative Services Joe Cook, were contacted for comment, both deferred to Dr. Paul Oestreicher, the Executive Director of the Office of Communications and Public Affairs at YU.
“We became aware of students being overcharged when making purchases at Golan and discussed the situation with the owner,” said Dr. Oestreicher. “Unfortunately,” he continued, “Golan decided they no longer wish to participate in the Caf Card program.” He concluded by stating, “We hope they’ll reconsider - the door remains open. We asked Golan to return the money to the students because the restaurant collected the money. At the same time, we are reviewing other means to reimburse students.”
Benjamin Izsak, the owner of Golan Heights, sees matters quite differently. His stance, that YU has been claiming too much of his restaurant’s revenue, is based on the way the Caf Card operates, and on the way the deal between them was originally set up.
Students living on campus began this past semester with a pre-paid $250 balance of Omni dollars on their Caf Cards. Those not on the school’s meal plan started the semester with $125 in Omni money. This wasn’t always the case, however.
According to Mr. Izsak, YU was entitled to 15% of up to $50 spent at his restaurant per student per semester. When the deal was first implemented, YU only provided students with only 50 Omni dollars, in contrast to the much higher amounts provided now. After the $50 were used up, students would have to pay with actual cash, and Golan would receive 100% of the revenue from their orders.
Over time, though, as semesters went by, Izsak saw that $50 in Omni money balance increase incrementally, up until the $250 that it is now. “At the beginning of every semester I am surprised to see how much money YU allows its students to spend at restaurants when I swipe Caf Cards and see the remaining balances,” the Golan Owner expressed. “And YU never told me anything about students being able to reload their Caf Cards when they run out of Omni funds, essentially letting the cards reach an infinite amount of Omni dollars if desired.”
Mr. Izsak couldn’t confirm that original deal explicitly capped the Omni funds for his restaurant at $50, but stated that the leap from $50 to $250 was never discussed with him and therefore unfairly caused him a financial loss.
Neither YU nor Golan have been able to provide the exact contractual specifications that would clarify the matter.
So in practice, it seems, without a proper system in place to regulate that $50 limit, YU ends up with a larger share of Golan’s profit than originally agreed upon in the contract. It is still unclear to what degree YU was aware that it was collecting excess funds when reimbursing Golan for money students spent there on their Caf Cards.
Izsak estimates that YU students comprise about 70% of his sales. This being the case, his business is susceptible to taking a huge hit given the way YU Caf Cards operate. When students reload their Caf Cards, they thereby can perennially avoid paying tax at Golan when using their tax-free Omni dollars.
For Izaak and Golan, however, this situation is financially disastrous. Assuming his estimate is correct, he only collects full revenue on a measly 30% of his sales. While this partnership with YU was intended to help increase customer volume and sales revenue at Golan, only the former appears to have been achieved.
In an effort to make up for some of the lost revenue being funneled to YU, Izsak stated he recently began charging tax on orders placed by students who frequented his establishment. If he felt a customer had been to Golan often, he explained, he would charge them tax under the assumption that they had used up their Omni funds and had replenished their cards. Although Izsak was willing to honor a student's Omni funds up until $250, he felt that if a student refilled their Caf Card, it was as if they were using their own money, which should not be subject to the 15% cut by YU. Therefore, at that point, he felt justified in taxing the customer. Mr. Izsak stressed he distinguished these regular customers from students with unfamiliar faces, whom he assumes have not refilled their cards, and that he proceeds to ring up the non-frequent customers’ orders tax-free.
And ever since that one student spoke up and notified YU, many others started noticing that the prices they were paying for their Golan meals seemed slightly raised.
“The prices I used to pay at Golan were always rounded to the dollar or half dollar,” said sophomore Noam Liss. “But recently, in the past couple weeks or so, my orders have been ending in other miscellaneous digits. I didn’t make anything of it until the news about this started spreading; then I realized I was being taxed.”
This past week, however, the Golan owner conveyed that “enough is enough,” when he started declining Caf Cards in his restaurant to take a stand against a deal that from his perspective has become increasingly one-sided.
The decision has sparked angst and confusion amongst the student body. Sophomore Jack Kirschenbaum, for example, asserted, “Golan is my favorite restaurant in the Heights. No disrespect to other places around here, but Golan is way better in my opinion. The situation is definitely annoying because I should be able to use my card there, but for some reason, I can’t.”
Izsak expressed a similar sentiment to YU when discussing the possibility of rejoining the Omni plan--namely that he is open to figuring out a solution to this issue. He believes that a new agreement, more sensitive to his side of the deal, can ultimately prove beneficial to both his restaurant and YU.
In the meantime, the Golan owner is confident that his business will survive just fine without the partnership. People like Sy Syms sophomore, Jonathan Singer, are the reason why. Despite the card no longer being accepted at Golan, Singer insisted, “I know I will continue to support Golan. It is so convenient, and the food is so good that this change will not affect my spending habits there.”
Even if Golan can still thrive without YU, and even if YU remains content without partnering with Golan, it seems clear that a properly configured deal could be profitable to both sides.
Regardless, students are looking for answers.
“I am impatiently waiting for the day that I get an email informing me that Golan has reversed its decision and is again accepting Caf Cards,” said junior Shlomo Anapolle. “I’m not interested in paying additional money at Golan when I know that I have a preloaded Caf Card that has the potential to be honored there as payment.”
Avi Kerendian, also a junior in YC, doesn’t feel quite as strongly as Shlomo or the rest of the students who rave about Golan’s menu, but understands the craze. “I don’t eat the restaurant’s food that often,” He stated. “But I often find myself there with friends, and they I know they really love it. No can deny that the restaurant serves an integral role on campus.”
It remains to be seen how Golan’s recent fallout with YU’s Omni program will affect the other local restaurants involved in the same deal.
Even though YU and Golan are not currently seeing eye-to-eye regarding the terms of their joint meal plan, both parties have expressed sincere interests of reuniting in the future. That is assuming terms can be agreed upon, which, at the moment, the restaurant and university are finding to be a difficult task. But if and when they reconcile their differences of terms, the large majority of of YU students who lust for Golan’s coveted food will be able to freely swipe their Caf Cards there once again.