How does a contract catering business win and keep its contracts?

If you are weighing a contract catering business, its revenue is only as secure as its accounts. Those accounts were won in some way and are kept in some way. Ask how each account was won and how it is kept, and what a new owner would need to do. Event caterers sell dates one at a time. Institutional accounts run on longer agreements with a host.

How accounts are usually won

Hosts often invite proposals from several operators, and the operator that is chosen then signs an agreement. Other accounts come by invitation or referral from a host who already knows the operator. Ask the seller how each current account was won, who prepared the proposal, and whether the process will be repeated at renewal. Past wins say something about how repeatable the process is.

What the host measures

During the term, a host typically watches the service itself: reviews, complaints, how many people use the service, and how the operator handles problems. Ask to see any reviews, complaint logs and correspondence. Ask whether concerns were raised, how they were answered and whether any are still open.

Renewals and the owner’s relationships

Ask for the renewal date of every account and what happened at the last renewal or re-bid. Then ask which relationships sit with the owner personally. If the owner knows every host contact, a handover plan matters. Request the bid history, including lost bids, because losses show where competitors are strong. Your accountant can tie the account list to the revenue records.