What should I know about a catering company’s preferred supplier lists?
A preferred supplier list shows who the caterer relies on for food, rentals, staff and equipment, and why. Ask whether the relationships are written, informal or personal to the owner, because that tells you what will still be there after the sale.
A catering company is only as reliable as the people it calls on a busy Saturday. Ask for the list and who is on it: food suppliers, rental houses, bartenders, servers, delivery drivers and venues. For each, ask how the relationship started, how long it has lasted, and whether there is a written agreement or only a handshake. Informal arrangements are common, but they should be understood.
Ask why each name is there. Is it for quality, convenience, a better rate or a favour? Ask whether there are backup choices when the first one is unavailable. Check whether any clients ask for specific suppliers, and whether any suppliers refer business back to the caterer. Ask for recent invoices and note any balances still owed.
Finally, consider what stays and what leaves. Some suppliers may extend favourable treatment because of the owner, not the business. Ask the seller to introduce you, and ask suppliers directly whether they would continue. Your lawyer can tell you which agreements can be transferred. Plan to test the list yourself over the first season. Ask which events relied most on preferred suppliers, and what happened on the day one of them failed.
Key takeaways
- Ask who is on the list, why, and whether anything is written down.
- Find out which relationships belong to the owner rather than the business.
- Meet key suppliers before closing and ask if they will continue.
- Ask about a past event where a preferred supplier let the caterer down.
Related reading
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Buying
- Expert answerHow do I check a catering company’s tasting menus and proposal templates?
- Expert answerHow do I check a catering company’s tastings and consultation process?
- Expert answerWhat happens to a catering company’s booked events when it is sold?
- Expert answerWill a catering company’s corporate clients stay after the owner leaves?
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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