Buying a catering company in Florida

A catering company cooks in one licensed kitchen and serves the food somewhere else. The work comes in two kinds. Event catering covers weddings, corporate lunches, galas, holiday parties and memorial receptions. Each job is quoted on its own, usually with a deposit months ahead and the balance due before the event. Contract food service is steadier: running a company cafeteria, supplying meals to a school, senior community or detention center, or daily drop-off lunches, billed monthly under a contract.

The money comes from food, labor and service charges, the markup on rented linens, tableware and tents, and sometimes bar service. Event revenue swings with the wedding and holiday calendars and, in parts of Florida, the tourist and convention seasons. The core team is a chef or kitchen manager, a few cooks, a sales or event coordinator who books the work, and part-time servers and drivers called in event by event. Behind them are a kitchen (owned, leased or shared), vans and portable equipment, and the venues and planners who send the work.

• Repeat corporate clients and a place on venues' preferred caterer lists, so the calendar doesn't depend on advertising.
• Some contract business, like a cafeteria or a daily meal program, to carry the slow months.
• Future events already signed, spread across many clients.
• A chef and a salesperson who know the clients and plan to stay.
• Every menu costed out, so quotes cover food, labor and rentals with room to spare.
• A licensed kitchen with a lease you can keep, enough space to grow, and refrigerated vans in good shape.
• Referrals from planners and venues, not just one-time customers.

The Division of Hotels and Restaurants at the Department of Business and Professional Regulation (DBPR) licenses most caterers under chapter 509. DBPR has a catering license for businesses that only cater; a licensed restaurant can cater under its own license. Food must be stored and prepared in an approved, licensed kitchen, never at home, and every business sharing a kitchen needs its own license. The license can't be transferred, so you apply for your own (section 509.241). Buy a licensed kitchen and change nothing, and you avoid a new plan review; a remodel or a long-closed space needs one.

Food service inside a school, assisted living facility or jail is generally permitted by the Department of Health instead (section 381.0072), so check which agency covers each contract. A caterer licensed under chapter 509 can get a special alcohol license to serve drinks at events where it also provides the food. Food and nonalcoholic drinks must make up at least 51 percent of food and beverage sales at each event, the caterer can't store alcohol between events, and it must buy from licensed vendors (section 561.20). Ask the Division of Alcoholic Beverages and Tobacco whether the seller's license can pass to you.

• Deposits. This is money the seller collected for events you'll cater. Make sure they're credited to you at closing, and read the contracts' cancellation terms.
• Where the work comes from. How much revenue depends on a few clients or one venue's preferred list, and whether those ties will survive a new owner.
• Contract terms. For contract food service, check how long each contract runs, how it renews, whether the client can cancel, and whether it can pass to you.
• How event staff are paid. Servers and bartenders are sometimes paid as independent contractors. Ask your accountant whether that would hold up, since getting it wrong can mean back taxes and penalties.
• The kitchen. The lease or shared-kitchen agreement, how old the equipment and vans are, and the inspection history on DBPR's site.
• Margins by job type. A drop-off lunch and a full-service wedding make money very differently; ask for results by type.
• Storm risk. What happens to events canceled during hurricane season, and who keeps the deposit.

• Which clients and venues send you the most work, and would they keep calling under a new owner?
• What's already booked for the coming year, and how much have you collected in deposits?
• How do you price a wedding compared with a corporate lunch?
• Who does the selling today, and who does the cooking?
• How do you staff a big weekend, and how do you pay the servers?
• Do you own, lease or share your kitchen, and what are the terms?
• What happens when a hurricane threatens an event weekend?