Restaurant Catering Series: Part 1

Part 1. General considerations

Catering is the business of providing food and beverage sales off premises to customers. For many restaurants, catering is an untapped revenue source and, if done properly, can be quite profitable. If you’re considering adding catering to your restaurant’s menu of services, there are many issues to consider. In this first post in our Restaurant Catering Series, we look at a few basic tips and issues.

Make some calls. If you operate a franchised restaurant, consult your franchisor or other franchisees to determine if catering has been successful.

Consider catering as an extension of your current brand. If your restaurant specializes in soups and sandwiches, then that’s what your catering menu should reflect. Do what you do best! For example, Chipotle’s popular, in-store “build your own burrito” option is also offered through Chipotle Catering.

Find the catering format that fits you best. Some restaurants require customers pick up their orders while others provide set-up services or full service catering. Selecting the right format requires analyzing your current infrastructure and menu.

Consider taxes. Your catering format will determine if sales tax is charged to your customers. Employee compensation can also be tricky – the IRS’ new regulations for tips versus service charges extend to catering.

Think about how you will account for and track sales. Catering services should be accounted for and tracked in your POS separately from your restaurant. Is this possible in your current POS?

Consider payment methods. You’ll need to determine payment methods and communicate options with customers in advance. Allowing customers to order on credit can be a disaster if not managed properly.

Determine tactics for marketing your new service. For example, you may want to offer area businesses free samples or a coupon to introduce them to your catering services. You’ll certainly want to add a page to your restaurant website that describes your catering services and facilitates ordering.

Are you considering adding catering services? BDO can assist you with projections and analysis. Contact us.