Schools meals are among a list of services that could be turned over to a not-for-profit co-op run by schools in a borough of the West Midlands.
Sandwell Council wants to set up the Sandwell Industrial and Provident Society (IPS), with schools becoming the major owners.
According to the BBC, the 500 staff currently employed by the council would become employees of the co-operative society, but the proposals have caused public sector trade union Unison to raise concerns.
Richard Alonzo, joint branch secretary of Unison in Sandwell, said: "We have clear concerns about the plans - it will be customers not the workers who've got the stake in it."
As well as school meals, the IPS would manage music tuition, health and safety, broadband, and the training of staff and governors, a spokesman said.
Schools already spent nearly £9m a year on these services and the council invests another £2m, it said.
Councillor Bob Badham said: "Education shouldn't be about making profit so the IPS set-up ensures all the money made stays within schools and services."
Governors, head teachers and staff will be consulted about the proposal, and the plan will be considered by the council's cabinet on 11 July.
By Janie Manzoori-Stamford
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