Catering Contract Template
We have created Catering Contract template with simplicity in mind. It is an easy to use and ready made Catering Contract template that enables you to know exactly what the client’s responsibilities are and saves your time and money.
Free Catering Contract Template Samples
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What is a Catering Contract?
How much should I charge to cater?
As you begin to write your business plan, it’s critical to do a catering cost breakdown. Since catering is considered part of the service industry, the amount that you budget for staff will impact your bottom line. Once you put your plan on paper, you’ll have a better picture of how to price catering services.
- Consider the standard percentage range: According to Cater source, the average pre-tax take for caterers is 7 to 8 percent. This is nearly double the profit that sit-down restaurants enjoy. It is possible to make more, and some caterers yield as much as 25 percent, but the market and your niche will make a difference. As you’re considering a catering estimate calculator, set a stretch goal, but be realistic about the profit that you’re likely to make.
- Market Analysis: For comparison purposes, conduct an informal market analysis of your competition. If you’re the only caterer in town, you’ll need to assess what the market will tolerate in terms of catering prices. If you’re competing with others, it’s critical to understand their price points. Weave a product comparison into your analysis. For example, pricing isn’t comparable between a boutique caterer and a local grocery store.
- What is the Event? Don’t make the mistake of offering a catering price without considering the details of the event. Providing boxed lunches for a business meeting is far different than a formal affair such as a wedding. You can list your services on your website, but don’t offer the pricing. Force a prospective client to contact you, so you can learn more about their needs. This offers you the opportunity to sell them on your services and offer varying prices, depending upon the client.
Consider the following list of questions that you can ask to help you with a catering cost breakdown:
- What type of event is being planned?
- Is it formal or casual?
- Do you want the food served, buffet style or boxed individually?
- What type of beverage service do you require?
- Will you want alcohol served?
- Do you want plastic ware or nicer china/flatware?
- When will food be served, and when will the event end?
- Do you want us to provide tablecloths, chair covers or centerpieces?
- What is your ideal menu?
Once you have all of this information, you can begin pricing the actual cost. Then add in your profit goal to get a catering cost breakdown for the client.
- Communicate with client: Make a strategic decision about the catering cost breakdown that you share with your clients. For example, you don’t need to explain how much you pay a bartender, kitchen staff or wait staff. Instead, list the cost for the bar or the cost for event staffing. If you choose to give a total price or a price per head, you may work yourself out of a deal. Breaking it down provides options for the client. If your price is $200 over their budget, they may be willing to go without chair covers or flatware to stay within budget.
- Reflect and Learn: After each catering event, be sure to conduct a final catering cost breakdown and compare it to your first estimate. It’s always possible that something unexpected may come up that will add costs to your bottom line, but the planned expenses should be accounted for. For example, if a tray of food is dropped on the floor, it’s your responsibility to absorb the cost. Conversely, if you forgot to figure dram shop insurance into your bar cost, you’ll need to factor that in for the next event that you cater.
How does contract catering work?
Catering contracts are legal agreements entered into between the client and caterer to supply food and refreshments in the workplace, for a specified period. There are many different types of catering contracts and there are pros and cons to each of them.
Contracts should be fair to both parties and be able to give accountability and value to the client as well as a realistic reward and/or incentive to the caterer.
These are the main types of catering contracts:
- An estimated budget is prepared by the caterer.
- The caterer operates the service according to the budget.
- If the budget is exceeded, the client pays the difference; if savings are made, these are passed on to the client.
- Subsidy can change monthly.
- Contractors charge a management fee.
Cost plus guarantee
- Same benefits as ‘cost plus’ and in addition the caterer guarantees certain lines within the budget i.e. labor costs, gross profit percentage, sundries as a percentage of sales and management fee.
- Ensures any benefit in increased sales will decrease the bottom line subsidy.
- Cost lines will be ‘fixed’ or guaranteed and charged to the client.
- Client does not usually benefit from any savings, but an agreement can be made to split any savings between caterer, client and catering team.
- Contract can incorporate an incentivized management fee based upon performance.
- A service level agreement (SLA) is drawn up and the caterer agrees to put part of their fee at risk.
- Caterers performance is measured against the SLA.
- Subsidy will be variable.
- Caterer normally has full autonomy over the tariff, menu and all sundry costs and how these will be applied.
- Nil subsidy can only be considered in high volume sites where near high street pricing is acceptable.
- No cost to the client and the caterer takes all the risk.
- For Nil Subsidy and a Concession Contract, certain parameters need to apply, such as sovereignty over service levels, opening times, offer and pricing.
- A profit and loss account is run by the caterer but these are not submitted to the client.
Fixed Price or Cost/Subsidy
- Annual budget, including all known variables, is prepared by the caterer.
- Annual cost is divided by 52 to calculate a weekly fixed subsidy, or by 12 to calculate a monthly fixed subsidy. This cost is charged to the client.
- Client does not pay for any overspends and knows exactly what the subsidy will be each month.
- The management fee element of the subsidy can be incentivised, however this is not entirely fair to the caterer as they already take the risk of providing the service.
- Lower quality contractors could reduce the quality and overheads to enhance their profit.
- The management fee is often higher to take possible risks into account.
Fixed Cost per head
- An annual budget is prepared and calculated to provide a fixed cost per user.
- The client is charged using the daily numbers multiplied by the food cost per head.
- Caterers have systems in place for counting the number of users.
- This is a common style of contract for hospitality, schools and for clients where the customer does not pay for their meal.
- In addition to Nil Subsidy, a percentage return (usually of sales) is given to the client each month.
- Caterer provides clients with monthly sales volumes.
- Usually used in retail or on the High Street.
- These tend to be high volume contracts.
- Best used as part of a long term strategy.
- Provides the client with a guaranteed percentage return-on-sales each month.
- Transfers the risks of managing food costs and stock holdings to the caterer.
- Client’s royalty percentage is maintained even if caterers profit is reduced in the event the caterer doesn’t control their costs.
- Royalty contract incentivizes both parties.
- Provides an alternative to an incentivized management fee based Service Level Agreement.
- Only applicable in large turnover operations.
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How do you write a catering contract?
A catering services agreement creates the foundation for the legal relationship between the event organizer and the caterer. Some caterers use their own contract while others draft new ones for each event. Either way, both parties should carefully review the document before signing it.
In order to write a catering contract you will need to follow these steps given below:
- Event Details
Client is hiring Caterer to provide food and beverages, and related services, for the following event (“Event”):
- Event Start time (for guests)
- Event End time (for guests)
- Location (“Venue”)
- Estimated number of guests
- Menu to be served
The Parties have agreed to the menu attached to this Catering Agreement. Caterer reserves the right to make small changes to the menu if key ingredients are unable to be sourced due to reasons beyond the control of the Parties.
The following limitations will apply to this reservation of right, “No alcoholic beverages will be served without a separate agreement relating thereto.”
- Coordination with Venue
Caterer will need to have access to the Venue no later than hours in advance of the Start Time for the Event, and hours after the End Time for clean up. Caterer will make all necessary arrangements, at Client’s expense, to get this access arranged.
- Payment Terms
In exchange for the services of Caterer as specified in this Catering Contract, Client will pay to Caterer per person attending the event. The exact amount due will be determined, and provided from Client to Caterer in writing, one week in advance of the Event along with a Final Guest Count.
- Responsibilities for Related costs
Client is solely responsible for all costs and/or deposits relating to use of the Venue, and for obtaining any necessary permissions, authorizations, or other requirements of Caterer providing services at the Venue.
- Insurance and Indemnification
Caterer has, or will obtain, general liability insurance relating to Caterer’s services at the Event. However, Client will indemnify and hold harmless Caterer for any damage, theft, or loss of Caterer’s property occurring at the event, caused by any of Client’s guests.
If the Client needs to cancel the event, Client must provide written notice to Caterer along with any required cancellation fee described in this Catering Contract, to effect cancellation.
Client understands that upon entering into this Contract, Caterer is committing time and resources to this Event and thus cancellation would result in lost income and lost business opportunities in an amount hard to precisely calculate.
The cancellation fee that would be charged will be stated according to the days left before the event and percentage of estimated total costs.
- Legal Compliance
The Caterer will work in compliance with all applicable local health department rules and regulations relating to food preparation and food service.
This Contract cannot be assigned by either Party without the other’s written consent.
- Limitation of Remedies
If Caterer cannot fulfill its obligations under this Contract for reasons outside of its control, Caterer may locate and retain a replacement catering company at no additional cost to Client, or refund Client’s money in full. Caterer will not be responsible for any additional damages or compensation under these circumstances.
- Resolution of disputes
The Parties agree to not post any negative information about the other arising out of this Contract or Event on any online forum or website without providing advance written notice of the intended content thereof, and providing the other party with an opportunity to resolve any issues between the parties amicably.
- Jurisdiction and Venue
This Contract will be interpreted according to the laws of the State and any legal action must be filed in the County or State mentioned.
Now both parties will sign the contract after having a look at all the terms and conditions stated in the contract.
What is included in the catering contract?
A catering contract plays an important role in the success of an event. Whether you’re signing an agreement for a general affair or a more specific event such as a wedding, the purpose of any catering contract is to spell out the responsibilities of each of the parties involved.
Following are the key points that should be included in a catering contract:
- Event Information: One of the first things your catering contract should list is the name of the client, the date and time of the event and the location of the event. This information should be listed on the contract so that the client and you are agreeing to the terms of the contract for that said date. Ensure that the client’s contact information is also listed on the contract such as email address, phone number or fax number.
- Costs: This portion of the contract should break down the costs of the event and what is being charged to the client. Items to include under costs are the minimum and maximum guest count, the price per person, the price per child guest, the type of service the client is ordering and the total estimated cost of the event that is being catered. In the event you charge overage fees for longer service hours or difficult transportation, those possible charges should be included in your contract as well.
- Types of Service and Staffing: It is important for the client to understand how many servers he is getting for his negotiated price and the type of service he is ordering so that there is no confusion at the event. List on the contract what type of service the client is getting, such as a buffet, tray-passed appetizers or a sit down event. List on the contract how many servers, bus people and bartenders will be present from your company and list any charges for additional service members.
- Menu and Beverages: A catering contract should have a complete breakdown of the menu the client is receiving at her event. Include dishes, appetizers and beverages on the contract. This will eliminate any confusion from a client having to compare an invoice later if she is not satisfied with her service.
Frequently Asked Questions
FAQs about our Catering Contract Templates
We recognize that your contract layout conditions may need to be changed to be in line together with your client’s needs. That’s why we have made Contract in Word format as well so that you’ll be able make adjustments as you like. If you want to make important changes to the template, we propose you to get help of a lawyer or conveyancer to make sure you still have protection.