On the other hand, when a university runs the cafeteria on its own, we end up with a problem similar to the problem that state enterprises face. A staff assured of employment yet unconcerned about profits can lead to a costly establishment providing a poor service. A novel solution to the problem is to provide a set of small kitchens – five or six – instead of a single large one. These kitchens are then hired out to separate caterers or restaurants serving different types of food. The maintenance and cleaning of the premises as well as billing are entrusted to staff hired by the university. A common billing clerk charges the appropriate amounts for food from different counters. The practice is to provide a plastic tray and cutlery at the entrance of the food counter enclosure. After the desired items of food are procured in the enclosure a customer proceeds for billing in much the same way as billing in a supermarket. The billing of food items is done at the exit of this enclosure. The billing done on a computer easily segregates and divides the proceeds between the different caterers. A separate counter for hot and cold beverages (requiring the least effort in preparation) is kept under the direct control of the university department. Profits from it help maintain the cafeteria.

A clause in the contract with caterers ensures that the caterer with the least cumulative sales (i.e. the least popular one) shall not have his contract renewed in the subsequent year. Poor caterers thus last for a year, while a good one can remain forever at the university. This system introduces competition amongst caterers and provides for constant improvement. The best of the caterers can be sure of long contracts, whereas the poor ones would be quickly changed. The fact that the university provides space, cutlery, utilities, and some of the staff to run the cafeteria automatically introduces a measure of subsidy that can translate into lower costs. In this competitive system, the university need not control the costs since an expensive caterer will generally not be popular with students. Some ground rules have to be specified in this food court, such as the number of items each caterer may prepare.

A campus without a good cafetaria is a barren one.