Selecting the Right Catering Solution

How do you select the right caterer when catering is not the primary focus of your business?

This is a question that has confounded companies, hospitals, museums, visitor attractions, sporting venues and a wide range of other businesses for many years. In each case catering services provide an essential element of the service for visitors or employees. Poor catering services can affect employee morale, reduce or limit visitor numbers, hinder the recovery of patients and generally create a poor image for the host business.
To this end many contracting catering companies have been created over the past 50 or so years. In each case they have been created to provide a ‘total client solution’ enabling their client to concentrate on the primary purpose of their work.

The argument goes that specialist caterers are able to take all of the day to day problems away from the their clients and are better placed to set higher operating standards, reduce costs, monitor and implement ever changing requirements of legislation

Despite all these supposed advantages though, the performance of some catering contractors remains an issue for many clients and catering services still absorb too much time in many clients’ busy days.

Many of these problems stem from the initial tender/ contract award process where the client’s needs and the caterer’s services have been poorly matched. Simple examples of this include:

• Commercial operations where clients have requested or demanded fees above attainable and realistic levels – and caterers have agreed to them in order to win a contract. As a result the catering services are limited or tariffs are raised to unrealistic levels, pleasing no-one.
• General terms have been interpreted differently. Phrases such as ‘high quality’ and have not been specified.
• Inexperienced clients have not taken advice regarding to the full content of caterer bids or have not weighed tender promises against operating proposals which show they could not be achieved. As a consequence the client has selected either the wrong caterer or the wrong form of contract.
• The opportunity has not been fully quantified and understood. As a result either the wrong caterer has been appointed or the agreed service cannot be delivered profitably.

In any catering tender situation it is essential to:

• Clearly quantify the scale and nature of the catering service required. This includes a well thought through quantification of the opportunity. For example in many cases smaller venues do not have a level of footfall required to enable a caterer to prosper. A similar situation may exist where visitor numbers are high enough but the scale of services required by the client is not economic. A realistic view of the requirements and the opportunity at the outset is essential to the success of the future catering operation.
• Ensure that the right form of operating contract is agreed. There are two main formats: management fee, where the client picks up the tab and the caterer provides all elements of the service in exchange for a fee; a franchise agreement where the caterer pays a fixed fee, an agreed percentage of revenue or a mix of both. Both of these styles of contract have benefits and drawbacks for reach partner and a thorough understanding of these issues is essential.
• Ensure that the obligations of both partners are clearly stated, agreed – and reasonable. Clients seeking ever increasing levels of cover make the caterers position less secure and increase the risk that the contract will fail.
• Establish clear performance measures. In addition to the fees to be paid, these could include: gross profit levels, staff cost levels, performance standards such as queuing times and table clear times, menu balance and style. With growing emphasis on environmental issues, other criteria could include food miles, energy consumption and waste management.