The catering/banquet market is measured using a number of different yardsticks, but most arrive at approximately the same conclusion – the catering revenue pool represents approximately 6% to 8% of overall foodservice revenue in the US. This includes most types of catering including retail, hotel, restaurant private dining, off premise and on premise. It also includes certain areas of non-commercial contract foodservice where food is provided on a per event basis.

Since the total revenue for foodservice in the US as of 2017 was just short of $800B, even 6% – 8% is a substantial revenue pool. And catering can, if managed effectively, be as profitable or more than restaurant operations. The industry standard for catering profitability approaches 8 – 9% net EBITDA, though certain types of caterers can capture even higher net income.

Searching for the pot of gold at the end of this particular rainbow, many restaurateurs have made the decision over the last several years to enter the catering arena. These include restaurants in the quick serve and fast casual sectors, as well as more upscale restaurants.

The most successful restaurants to catering crossovers have been undertaken by the restaurateurs who understand the catering/banquet business the most. This is typically either through in-house development of catering or through taking advantage of outside expertise.

Among the key factors for success is matching your existing restaurant products with the appropriate market opportunity:

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