Best Practices for Fair and Carnival Relationships
Presented by: The IAFE/OABA Joint Best Practices Committee
IAFE is the International Association of Fairs and Expositions, the trade association for the North American Fair and Exposition Industry, founded in 1885 and based in Springfield, Missouri.
The Outdoor Amusement Business Association (OABA), is the trade association for the North American carnival industry, founded in 1965 and based in West Springfield, MA.
A collaborative plan of action initiated in 2004 by the International Association of Fairs & Expositions (IAFE) and the Outdoor Amusement Business Association (OABA) set about on a three-part task as follows:
- identify the conventional business model in place among mobile amusement companies and fairs
- catalog the imperfections in those relationships; and
- create a checklist of recommendations designed to reflect best practices.
A small group of involved, interested participants, representing both parent bodies and all sides of the question, was assembled and at their organizational sessions, the designated members formulated a mission statement, established goals, examined issues of consequence and developed best practices for resolving underlying defects. Their mission statement and opening declaration of purpose follows:
The IAFE/OABA Best Practices Study will focus on the business practices between fairs and carnivals. Its goal is to develop guidelines for reasonable business relationships.
Declaration of Purpose
The exposition industry is in the midst of significant change and the outdoor amusement sector of our business is at risk and showing signs of being in irreparable difficulty. Carnival gross revenues as a whole are reported to be flat or down, with expenses on the rise. Competition is mounting. Ride and attraction suppliers are struggling or pursuing other markets. Plus, operation costs are spiraling upward and transportation, related fuel costs, labor and insurance expenses are on-going issues.
On the other side of things however, there is also the fairs' need for new sources of revenue to address increasing operation overhead, programming, maintenance and facility improvement costs, and the privilege fees paid to fairs by carnivals clearly factor into this equation.
Moreover, guest expectations are growing, influenced by the high quality, service and experience they receive from other industries; particularly the first-class guest treatment, conveniences, technologies and environment provided them by the amusement park industry. This phenomenon has set the standard fairs and their mobile amusement associates must attain very high.
The bar has been raised for both fairs and mobile operators and they clearly need to focus on providing their guests with a significantly better experience and environment marked by high quality, service and operating standards. If we simply try to wait out the storm and follow the same old business operating model we're likely to find a very different landscape when the clouds finally clear, and many may find themselves missing from that landscape.
In order to become outstanding hosts to fair guests, fairs must discover better ways to relate to their business associates, and these associates must do likewise. Each has the obligation to better understand the nature of our respective operations and the issues that come into play for each. Furthermore, both fairs and their mobile amusement associates need to step up, sharing risk and responsibility, in an effort to achieve excellence, as well as gain and retain market share, credibility and respect in the conduct of a shared endeavor.
Rather than resisting change, fairs and their mobile amusement associates must develop a game plan for working within the context of the changes taking place and, no matter how big or small the fair and/or carnival, taking a look at what does and doesn't work is a good place to jump on the learning curve. If we have a problem, we share the responsibility to fix the problem, not the blame, and be the change we wish to see in our world.
This study will focus on the fair and mobile amusement contractor business relationship. It will develop ideas and strategies for improving those relationships and a frame work within which fairs and amusement contractors might create a stronger and more effective alliance.
In the final analysis though, this study may be found just as important because it opens a constructive dialogue among fair and mobile amusement principals. In any discourse, an open exchange of information is clearly important, but more important even than whether the participants agree or disagree on any particular point, is the quality of the exchange between the participants that speaks to their underlying relationship. It is the shared wish of those taking part in this initiative that it will be marked by friendly, respectful communication among business allies intent on developing a more collaborative landscape and a brighter future for all.
Recognizing that process often slows progress and encumbers clarity, a decision was made to focus on the following vital few issues:
- Financial Formula
- Operational Guidelines
- Legal, Legislative, and Liability
Study Group Participants included:
- Jeff Blomsness, North American Midway Entertainment, South Barrington, Ill.
- Terry Bonnell, Allegan County Fair, Allegan, Mich.
- John Hanschen, Thomas Carnival, Austin, Texas
- Cindy Hoye, Indiana State Fair, Indianapolis, Ind.
- Bob Johnson, Outdoor Amusement Business Association, Winter Park, Fla.
- Guy Leavitt, Ray Cammack Shows, Laveen, Ariz.
- Doug Lofstrom, Orange County Fair, Costa Mesa, Calif.
- Joe Santos, Facilitator
- Andy Schoendienst, Luehrs' Ideal Rides, Belleville, Illinois
- Jim Sinclair, Minnesota State Fair, St. Paul, Minn.
- Mark Skoglund, Funtastic Traveling Shows, Portland, Ore.
- Gary Slater, Iowa State Fair, Des Moines, Iowa
- Jim Tucker, International Association of Fairs & Expositions, Springfield, Mo.
- Dominic Vivona, Jr., Amusements of America, Monroe Township, N.J.
- Rick Vymlatil, South Florida Fair, West Palm Beach, Fla.
VITAL ISSUE 1: COMMUNICATIONS
IMPEDIMENTS TO SUCCESS . . .
- What we have here is a failure to communicate. Those words hold ominous warning for Cool Hand Luke. They are equally ominous and often foreshadow failure in the conduct of a business relationship.
- The outdoor world of fairs and mobile amusements has produced some great collaborations, most of them marked by strong communications between the parties. At the same time, it has established a record of failures, most noted by an absence of shared information and disclosure.
- As regards the latter, fair and amusement contractors often fail to inform one another on key points before their operating agreements are put to paper; e.g. how much of what quality equipment is expected and how much will be delivered; what is the physical condition of the carnival lot; is there nearby space for temporary housing and storage; is water and electric available; how will sponsorship arrangements be dealt with; what are the requirements or limits on game and food concessions; what expectation does each party have as to the division of proceeds; who does the marketing, etc.? These and a long list of other critical issues are often left unidentified and unresolved.
- Too often, the parties succumb to the use of a pre-printed, form contract and, as a result, they ignore critical information. If negotiations are abbreviated or incomplete, the parties may fail to reach a full understanding of each other's expectations. Without this understanding, a meeting of the minds cannot be reached. A good working agreement should evolve from a negotiation process that is open, informative and frank.
- A contract should be a working document, which defines a working relationship. It should identify the rights and responsibilities of each party. If the discussion of issues is not one in which the parties are forthcoming about their expectations, the contract itself will be defective and worse yet, all communications that follow will be contaminated. Distrust will disable the process; the parties will become adversarial and all hope of meeting goals will disappear.
- When major decisions which bear upon an existing business relationship are made by either party with neither notice nor consultation, such as changing outside gate prices, taking on a product-exclusive sponsor, changing the mix of rides and games, or changing ride prices, communications have failed to the detriment of the relationship. If either party has concern about some aspect of safety, the operating environment or the financial integrity of the process and fails to communicate these concerns to the other, the relationship is neither open nor trustworthy.
STRATEGIES FOR SUCCESS . . .
- It is vital that the players learn the game. That means the fair manager or proxy chosen to act as carnival chairperson must learn the rudiments of the mobile amusement business and everything possible about the company with which he or she is about to negotiate; i.e. its past record of performance and reliability, names and background of key personnel, safety record and financial history. Site visits should be considered an imperative. It is equally important that the carnival representative come to the table with a basic knowledge of how fairs operate, but more particularly, how this fair operates; i.e. its market size and demographics, its management decision-making history, how it makes contractual decisions and who makes them, how government might relate to the process, its funding sources and its financial health.
- It is important that the parties learn about one another, about the business philosophy that drives the mobile operator and the public policy that drives the fair. Equally important is that the exchange identifies areas of possible disagreement and potential conflict. Goals not shared or not compatible might drive a wedge between the parties before the collaboration actually begins.
- It is sometimes true that fair folks pretend to know all about the carnival business, how ride capacity and per-caps are calculated, how games are operated and how much money they produce, what breakage is and who gets it. Carnival folks, likewise, come to certain conclusions about the fair's marketplace, about profit centers at the fair, where they are, where they should be and usually assume the carnival should not be one of them.
- Assumptions aside, the very best basis on which to begin a business alliance is specific knowledge, and that knowledge is gained in three ways: homework, discussion, and experience. Experience is the cumulative result of ample homework, thorough discussion, and the learn by doing system. Get out; do your advance work. Visit other fairs, look at other carnival presentations, check references carefully, and talk to other people in the business. Gather these basics before starting the discussion, keep your ears open, think carefully about what is said and be prepared to reply, I don't understand what you've just proposed; could we go over it one more time?
- The process of communicating is not an objective, but an engine that moves the parties toward understanding and trust. The fuel needed to keep this engine running is openness, without which the process becomes an empty exercise. If the fair insists on inflating projected attendance and the mobile operator insists on deflating ride, game and food potential, then the process fails to create either understanding or trust.
- Communications do not end when the contract is signed. In fact, they should become more direct as the event approaches and very specific as the fair opens, during its conduct, and when the gates close.
- Keep notes and questions. Talk to one another every day about every aspect of contract performance. How about our promotions; are they effective? Is our security plan working? Do we have enough ticket boxes in the right locations? Do we have ample restrooms and rest areas?
- When the fair is over, the carnival moves on to another location. Its staff becomes occupied with new circumstances and new problems. But soon after the fair's closing, the parties should examine contract documents to see if they are working properly or whether they should be adjusted. Questions and problems from the perspective of each party should be compiled; a meeting and a conversation should be conducted to examine what might be done to improve the presentation and strengthen the relationship.
BEST PRACTICES . . .
- Before a carnival contract is drawn, discover all you can about your prospective business associate; talk, discuss and learn what he, she or the company represented wants from this budding relationship. Is what you've learned compatible with your business philosophy?
- Both parties should now translate this knowledge into a concrete working agreement. Put your understandings into clear, straightforward language; be concise and use correct legal terminology. The parties might be well served if an attorney guides the contract preparation process.
- Both rights and responsibilities of the parties should be covered in the contract. A well-written contract will include all things important and exclude all things immaterial to its performance.
Never sign a contract you do not understand. Communicate and clarify misunderstandings; correct the language before moving forward.
- A contract should be followed to the letter. If certain provisions prove difficult, communicate with the other party and resolve the difficulty before it causes conflict.
- Intended as a working document, the contract should not go into a file cabinet, but rather, it should be kept close at hand, used as a guide and referenced whenever questions arise.
- Contracts need not be cast in concrete; they should be amended to correct flaws, fill in open gaps, and advance the work. Communicate with the other party about the need to amend.
- Agreements of extended term may serve to benefit both parties, but a longer term should not become a penalty for one and a reward for the other. A contract which serves the interests of one party and not the other has already failed.
- A regular schedule of meetings should be undertaken by the parties, pre- and post-fair. Agendas should be established in advance so discussions remain on target.
- Meetings conducted before the fair should focus on locking in dates and operating hours, price schedules, marketing and promotion plans, set-up and tear-down arrangements and contract terms that require amendment.
- During arrival and set up, representatives of each party should walk the lot, examine locations of water, electric, sewer and other service components, and confirm prior agreements on placement of rides, games, food, ticket boxes, guest relations booth(s), and other strategic elements of the show.
- Daily contact and open, frequent exchanges of information during the event are necessary so knowledge can be shared on a visual basis, problems can be solved and adjustments can be made to improve the presentation.
- Pricing adjustments should not be undertaken by either party unless thoroughly discussed in advance of implementation. Discounts can be an effective promotional device if used correctly. Both parties should understand and preferably agree to the process.
- The sponsorship arrangements of each party, particularly those which might bear on the financial considerations contained in the carnival contract, should be discussed in advance and understood. This is especially important if any product exclusivity is involved in the arrangement.
- Technology, particularly Internet sales, should be explored and every available resource brought to bear to the benefit of advance sales of gate and carnival tickets.
- An up-to-date crisis management plan is critical to the safety and care of guests and employees. Plans developed independently by each party should be integrated into a comprehensive master plan that serves the unique and immediate needs of the local event and environment.
- Crisis issues must be incorporated into the employee and staff training process so that a coordinated response can be made in emergency situations.
- Comprehensive post-fair planning is critical to the future development of a strong economic model and the growth and viability of the business relationship. Meet soon after the event. Keep notes and photos; bring them and share them at the meeting.
- An agenda for post-fair planning might include capital expenditures to improve midway operations and update the public presentation; resolve who is to make these improvements and how they will be funded.
- A long range planning process should focus on best practices. It should also identify issues of common agreement, as well as those that cause conflict. A process to build on points of agreement and work one radicating conflict should be undertaken. An effective communication system is already available to fair and mobile amusement contractors through their respective trade associations and the cross-memberships available though the IAFE and OABA.
VITAL ISSUE 2: FINANCIAL FORMULAIMPEDIMENTS TO SUCCESS . . .
- Contracts are typically crowded with terms and conditions, some important, some less so, but the core issue in any such agreement is the formula which determines the revenue each party will receive and the expenses each will bear. It is most often this issue that leads to disagreement.
- A financial formula is a structural device; it cannot be fictitious or false. Nor can it be predicated on simplistic fairness principles. It is a function of innumerable factors, some important, some less so. Sorting out factors that really count is a complicated task.
- The financial formula which currently prevails in the outdoor industry is not a formula at all. The division of proceeds between mobile amusement operators and fairs is often the product of whim, urgency, ego, demand, or mimicry, with a little trial and error and we've always done it that way thrown in. As formulas go, this one has proven itself less than successful.
- What's more, both parties involved in the process face a dilemma: the economic environment they share is less flexible, public expectations are higher, margins are smaller, risks are greater and rewards are less rewarding.
- Many fairs operate within a governmental system established by law that directs how contract decisions are to be made. These systems do not always encourage enterprise; they may put more emphasis on earnings than on quality, innovation or presentation.
- Even those fairs not regulated by government must make an elemental decision about where to place the balance between attraction value and revenue, and that decision invariably bears on the structure of the financial formula. Balance is the operative word, but more often than not, revenue is the choice and the carnival becomes a primary profit center. This choice might seem prudent, but it can prove counter-productive.
- Mobile amusement companies make similar economic choices when negotiating the division of proceeds, but their choices usually include extraneous factors such as routing, timing, layovers or future opportunities in a new area or sphere of influence.
- At the present time, the outdoor world can demonstrate glaring examples of indiscretion: RFP's have been written and circulated that ask inordinately high rental rates; contractors have accepted these terms and suddenly, what was considered outrageous has become the new standard. It is impossible to build these anomalies into a logical formula.
STRATEGIES FOR SUCCESS . . .
- Earlier points made in support of good communications come into play when working out financial considerations, but only after greed and ego are taken out of the formula and replaced by full and open disclosure, good judgment, and even-handed dealing.
- Mobile operators are known to be entrepreneurs, often willing to take risks to gain leverage. This is praiseworthy. Fairs, as well, are interested in new opportunities and fresh advantage, but because of their institutional character, fairs are sometimes less able to exercise the same, freewheeling spirit of enterprise. The former might be seen as adventurous, the latter as unbending, but neither representation is exactly correct. Presupposing inflexibility should not prevent a meeting of the minds.
- It is nearly always true that each of the parties in a contract negotiation comes to the table holding a trump card; one is usually stronger than the other. This can lead to unfairness, but if both parties enter the process using an honest and impartial game plan, a good outcome should result.
- To forge a productive, long-term relationship, the parties must acknowledge a simple truth: reasonable financial terms will produce far-reaching benefits for all those involved. They will minimize arguments about money, and in so doing, will focus energy and resources on safety and quality as first priorities. These priorities are critical to the health of the relationship. Furthermore, a strong carnival associate will not compromise on paying a reasonable share of the costs of doing business.
- It is also a fact that strong, viable carnival companies represent a positive influence on the mobile industry as a whole. They provide a benefit to their peers, including resources to advance safety. They offer examples of good performance, quality presentation and creative marketing. They raise the public perception of the entire industry and create a positive image for fairs as well.
- It is equally important that fairs remain healthy and vital in a changing world. Sharing carnival proceeds with a healthy associate is a step in the right direction.
BEST PRACTICES . . .
- The financial considerations of a carnival contract must be fair, balanced and recognize that each party deserves an equitable return for risk, investment and expertise.
Contracts, disclosures, and pricing should be appropriate in the context of the local marketplace.
- RFP's should be used for qualification of the mobile amusement company, particularly with respect to safety record, adequate insurance coverage, employee uniform and conduct policies, drug testing program, and staff background checks. RFP's should not be solely price driven.
- Proper review of an RFP should include a site visit while the contractor is in operation.
- Contracts should be of sufficient duration to mitigate the effects of a bad year.
- Pricing adjustments to outside gate, rides, games and food should be subject to annual review. A key consideration in making these adjustments should be impact on customers and how they might respond. Marketing and price incentives should be explored as a part of the process.
- A reasonably accurate disclosure of the fair's annual attendance should be provided to the mobile operator. A consistent method of determining attendance should be applied.
- If the contract between the parties calls for audited figures on outside gate, rides, games, and food to effect a settlement, there must be a workable method of verifying the correctness of these figures. Much as the fair should use a ticket audit system to prove gate attendance, with respect to midway grosses, the fair should print the tickets, consign them to the carnival contractor who sells them and a reconcilement should be effected between the parties on the basis of tickets sold.
- Both parties to the contract must determine what is to be included in the accounting process; both should work to make disclosures accurate and easy to obtain. Information pertinent to the decision- making process should be subject to verification.
- A fair should give reasonable consideration to the carnival's attraction value and its influence on generating gate attendance.
- Both the fair and the mobile operator under contract should consider investing some portion of the revenue derived from the carnival into improving the midway area and the amenities of the area so as to make them more guest friendly.
- Added fees for storage, golf carts, gate admissions and the like should not be applied after the contract is signed. If such fees are appropriate, they should be delineated in the contract and understood beforehand.
- Contract flexibility is important as fuel, labor, and insurance expenses rise. It might be appropriate to build into the agreement a process for indexing these added costs.
- Mobile operators should consider participating in the OABA Quality Assessment Program. The guidelines set forth in this program should be incorporated into contracts by reference; participation in the program might also be given weight in the RFP's used to solicit carnival providers.
VITAL ISSUE 3: OPERATIONAL GUIDELINES
IMPEDIMENTS TO SUCCESS . . .
- In spite of careful planning and preparation, day-to-day carnival operations can become untidy and disorganized if the fair and the mobile operator have mixed priorities, dissimilar goals, or there is an unclear division of responsibilities. Comprehensive communications and friendly negotiations will usually produce a detailed agreement devoid of double standards, but that agreement does not always guarantee flawless operations.
- It is clear that this dilemma begs a well-defined operational guideline and written documents that mark out and articulate priorities and standards, describe how they will be met and specify who is responsible for meeting them.
- It is also true that when parties to a contract reach an understanding of individual and shared goals, what may remain unclear is how those goals will be reached and how responsibility for reaching them is to be shared. For example, consider these simple objectives:
- Highest possible level of safety.
- Best possible public image.
- Equal accommodation of all guests.
- Effective quality control.
- Best price for the best product.
- Comprehensive public service and solid public relations.
- Effective cost control and peak productivity.
- There is little question that the fair and the mobile operator embrace these objectives and wish to share in their realization. The embrace is easier than the sharing.
STRATEGIES FOR SUCCESS . . .
- Safety is a moral and an ethical imperative. It is also a practical consideration. Even the slightest lapse in this standard can destroy human life, cause disability and ultimately dismantle the business reputation of those involved. Safety, comprehensive insurance coverage, a loss prevention and crisis management program must be primary on the index of shared accountability.
- A public image of quality and value “ and don't forget fun “ is created by sending an uninterrupted stream of good messages with professional graphics, clean, crisp uniform dress, cheerful attitude and exciting attractions.
- Providing equal accommodation to all guests has legal implications, but it is the right thing to do and serves to strengthen the reputation of both parties.
- Moderate prices and attentive public service will generate positive public relations.
- Cost control can only be effected if both parties work to identify inefficiencies, wasted effort and overlap, and then jointly resolve to share in better, more effective practices.
- Beyond a simplistic approach to sharing goals and responsibilities, the parties must confront a myriad of subtopics that influence primary considerations; some of these tend to invade the exclusive interests of one or the other party.
- Fairs provide a gathering of diverse activities, exhibits, concessions, entertainment, and sponsorship interests. It is not uncommon that these bear upon and even clash with carnival operations. At the same time, mobile amusement companies bring together a diverse community of independent operators who, along with the primary contractor, require outside support and sponsors to generate cost effective programs.
- These proprietary interests are worthy of discussion and annual review. If they are seen as having serious impact on either the independence or the inter-dependence of the parties, they may warrant consideration and resolution in the carnival contract.
BEST PRACTICES . . .
- Develop an operating guide that provides each party and all involved staff with simple, declarative instructions on how to handle specific contract provisions, plus other, non-contractual elements that define day-to-day coordination between the parties.
- Define the safety inspection program in straightforward, uncomplicated language. What is to be done before opening, daily, and on the occasion of an accident? What is the inspection protocol, who performs the inspection and what are the required qualifications of the inspector? What is the scope of the inspection and what is the code, if any, that regulates the inspection? What is the responsibility of each party in the development, approval and implementation of this protocol?
- Who communicates with the public and the media regarding the safety program; who reports on behalf of the parties should an accident occur?
- Create standard procedures to describe how fair staff and carnival staff relate to one another. Who is in charge of what? List primary contacts for each party along with phone, pager and e-mail access.
- Guest relations on the midway should be coordinated with the fair's overall guest services program. All staff involved in these contacts should be trained to understand the process and apply the correct answers and solutions to questions and problems. Messages and instructions to the public must be consistent.
- The process used and the quality of cleanliness on the midway should mirror or better the program used on the fairgrounds as a whole. In both cases, the standard should be high.
- Carnival skill games and games of chance need to be examined and understood. Are they operated properly? Do they provide good customer value? Do they meet community standards? Are they helpful or otherwise in creating a good image for the fair and the mobile operator? Is the number and mix in correct balance? Is the prize throw at an acceptable level? Have these several questions been addressed in the contract?
- The mobile operator and the fair should establish standards for staff uniforms, hygiene, grooming, and conduct.
- The parties should thoroughly discuss the mix of attractions on and off the midway and how this mix might bear on the contract and the exchange of monetary considerations between the parties.
- The OABA Quality Assessment Program provides guidelines that should be embraced by the parties. Coordination in applying the standards of this program can facilitate better quality control.
VITAL ISSUE 4: LEGAL, LEGISLATIVE & LIABILITY
IMPEDIMENTS TO SUCCESS . . .
The operating environment for business and particularly the outdoor business is a minefield of regulatory pressure and legal coercion. It is an environment that continues to change with new legislation, stricter codes and heavier civil and even criminal penalties coming into play. Those who seek to regulate, legislate and litigate have found an easy target in mobile operators that come to town for a week or two and then leave. Fairs seem to appear from nowhere and then fade away. This activity is too brief and seems too frivolous to be considered stable and those who work in this environment too transitory and suspect to be considered a reliable workforce. In years past, the general reaction to this negative attitude was, lay low, say little; they'll forget about us eventually.
STRATEGIES FOR SUCCESS . . .
- The world has changed. In place of silence and concealment, the new theme is vigilance; strong, positive responses offered in a unified voice; effective lobbying on a state and national basis; and a positive public image generated by positive public relations.
- Fairs and mobile amusement contractors must share the watchtower, be attentive to the legislative and regulatory scene, communicate and warn one another about impending changes, especially changes that might adversely affect carnival operations.
- Because they have reputation and statewide connections, fairs are usually better able to monitor state and local regulatory activity and better able to advise their carnival associates when troubling proposals begin to take shape. Concurrent with advising one another, the parties should report to their respective business associations, i.e. the IAFE and OABA, when these activities crop up so the collective resources of these bodies can be brought to bear on the problem.
BEST PRACTICES . . .
- Fairs and mobile amusement companies should stay informed about legislative activity that might bear upon carnival operations within their state, province and/or region.
- A regular exchange of information regarding national and local legislative matters should be undertaken by the parties.
- When appropriate, the parties should join together to support or oppose legislative enactments.
- The parties should understand and exchange information and experiences related to the Americans with Disabilities Act (ADA) so that policies and procedures used on the midway conform to current law and are consistently applied.
- Mobile amusement operators should immediately inform fair management about accidents or injuries on-site or at any other venue, giving as much detail as is available, so the parties are prepared to provide accurate and consistent messages to the public and the media regarding the circumstances, corrective actions taken or otherwise.
- The hiring practices of both parties should be examined and, wherever possible, steps should be taken to create better employee recruitment and training programs.
- Fairs and mobile amusement operators should access web sites that provide a register of sex offenders, especially in states that enforce Megan's Law, so that informed choices might be made during the hiring process.
- Methods and procedures for obtaining background checks on new employees should be shared by the parties.
- The International Association of Fairs & Expositions and the Outdoor Amusement Business Association are independent, autonomous organizations serving different clients. However, there are many opportunities for these two groups to work together in service to the common interests of all the parties, especially in the legislative arena or on matters related to liability and legal issues. These opportunities should be explored and broadened where possible.
VITAL ISSUE 5: ETHICS
IMPEDIMENTS TO SUCCESS . . .
One school of thought considers business ethics to be a phrase in conflict with itself. When pushed on the subject, those who support this thinking do so with a twinkle in their eye and a chuckle, but tongue-in-cheek as it might appear, the assertion strikes a chord of truth.
Society is skeptical about the morality of the enterprise system. Over the years the world of fairs and carnivals has offered historical evidence that it deserves a share of this skepticism.
However, history is not the subject at hand, nor is culpability.
STRATEGIES FOR SUCCESS . . .
- Ethics, as a discipline, is difficult to embrace. It does not seem real or practical. It's about moral duty and values. It requires separating what is good from what is bad.
- These are tough issues in their own right, but when applied to business practice, they often can appear to obstruct the normal course of commerce. Actually, however, they do not obstruct business, because they are straightforward and simple. Ethics is a one- word substitute for the longer phrase: Do the right thing because it is the right thing to do.
- Good business practice is built on a platform of leadership and initiative. Leadership must apply an agenda that relates ethical values to operations. Initiative must be balanced, motivated and disciplined.
- At every turn the word trust is identified as the basic standard for a model business alliance. Without trust, the relationship will fail. Openness can facilitate trust, but honesty is the creative energy.
- There are many business applications that beg ethical standards. Three examples that clearly have a bearing on the relationship between fairs and mobile amusement operators, include:
- Truthful Disclosure “ When contractually called upon to do so, the parties must be truthful in the disclosure of information that bears upon the contract and upon the division of proceeds. Attendance figures should be truthfully offered, carnival income from various sources, such as rides, games, concessions and straight-sales, should be truthfully offered as well.
- Honest Assessment of Risk “ When safety issues are measured and decisions made about insurance coverage, maintenance of equipment, adequate staffing levels and inspections, these decisions must honestly evaluate the cost and other resources necessary to provide appropriate safety control. To lie about these matters would represent an ethical breach and possibly a failure to acknowledge legal liability.
- Arm's Length Transactions “ Mobile amusement operators cannot offer and fair executives cannot solicit or accept personal benefit in exchange for business advantage, or as a means of building affinity or friendship.
- Beyond the simple dishonesty of these acts, they do not build trust, they destroy it.
BEST PRACTICES . . .
- The best approach to forging a successful relationship is for the parties to define their goals, establish positive lines of communication, and ultimately learn to trust the integrity of the other party.
- All disclosures of information between the parties should be accurate and truthfully given.
- Safety should never be compromised for the sake of cutting costs or improving profitability.
- Fair, honest, and responsible business operations are a must.
- The public interest should be placed above that of the individual, fair and/or carnival at all times.
- Fair and mobile amusement operators should structure their actions so as to observe all statutory requirements related to the exchange of gifts, ride passes, game toys, food, and hospitality.
- Social interaction among the parties is acceptable as long as a balanced exchange of gratuities is observed.
- The respective codes of ethics of the IAFE and OABA provide guidelines that should be embraced by the parties.