The Right Way to Cash In On Restaurant Catering

Operators learn that bringing their brand to off-site events is as challenging as it is rewarding.

June 2017 Daniel P. Smith

A decade ago, spurred by a nod from the Atlanta Journal-Constitution that they were a runner-up for Atlanta’s “best barbecue,” Jonathan Fox and his brother, Justin, transformed their small catering outpost, Fox Bros. Bar-B-Q, into a kitschy, casual restaurant in the city’s Candler Park neighborhood.

“We thought we’d have this restaurant and would kill it, but quickly learned we were just a small blip on a large radar,” Fox says.

While the brothers had no plans to ditch their catering operations with the debut of their flagship restaurant, it became immediately clear that building the company’s catering business could not be an overlooked adjunct. Rather, off-premises catering stood an essential play to deepen the restaurant’s marketplace exposure and drive the company’s overall financial health.

Within one year of opening their Atlanta restaurant, the Fox brothers hired additional personnel, designating some staff to the restaurant and others to the company’s swelling catering arm, including a catering operations manager charged to push the brand. The brothers also began purchasing branded vehicles that not only delivered goods to off-site jobs, but also served as mobile advertising for the upstart brand.

“Honestly, we were swimming in business,” Fox says, noting that catering represented about 20 percent of overall company revenue in the restaurant’s earliest years.

All seemed swell, and the Fox brothers began investigating a second restaurant. While exploring prospective locations, however, the brothers also initiated earnest reflection on their catering operations and that opportunity’s place within their growing enterprise. Though business was surging, the brothers wondered if the company was providing its best result—in its restaurant as well as at its off-site events.

“It was actually a critical question at that time and the best question we could’ve asked ourselves,” Fox recalls.

If positive and continuous company-wide growth were to happen, the brothers determined they had to invest in an even stronger catering experience and inject efficiency and strategy into that segment of the business. Being sufficient wasn’t enough. Fox Bros. wanted to be spectacular.

With that, the Fox brothers paused restaurant expansion plans and doubled down on catering, strategically investing in people and processes designed to drive long-term success. Most notably, Fox Bros. opened a 17,000-square-foot commissary headlined by a large smokehouse. That investment removed the constant strain on the lone restaurant’s kitchen, increased the catering team’s capacity, and helped to ensure Fox Bros. could deliver a satisfying, consistent experience to all of it guests.

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Define Your Catering Brand
Before pursuing off-premises catering, Chef Aidan Waite, owner of The English Connection, a Charlotte, North Carolina–based culinary consulting company, says operators should first consider what they are willing to do and, perhaps more importantly, what they’re capable of achieving with their team and available resources. This includes everything from service radius and service method (drop and go, full-service, or some in-between combination) to the depth of the menu and service capacity.
“If you decide to go into off-premises catering, the whole management and staff has to embrace it,” Waite says. “If the attitude is, ‘We are doing this just because we need to or [because] we need to make money,’ it will not work.”
Tracy Borkum of Urban Kitchen Group and consultant David Scott Peters both say a restaurant must stay true to what it can accomplish and avoid overextending itself. Some caterers, Peters says, hustle like mad to complete a job only to later discover that they made a modest profit or broke even because they failed to price the bid properly. Operators need to know, down to the penny, what each dish costs and the manpower necessary to complete the job.
“And you cannot be afraid to decline a job,” Peters says. “You are not built or meant to take every catering job, and you can’t be afraid to let it go down the street.”

Today, catering represents about a third of Fox Bros.’ revenue, and the company handles events ranging from 40-person office parties to feeding 2,500 construction workers at the new Mercedes-Benz Stadium in Atlanta.

“We’re in a much stronger position today than we’ve ever been and a real calculated focus on off-premises catering is key to that,” Fox says.

Benefits and Challenges

Off-premises catering, which can be as simple as dropping off goods and setting up a modest buffet to creating a formal, full-service dining experience complete with service staff, is undoubtedly a compelling business opportunity for restaurants. Chicago-based foodservice research firm Datassential reported last fall that consumer spending on catering is approaching $8 billion and is capturing growth that is on par, if not beyond, that of other restaurant categories.

“From a revenue and profit perspective, [off-premises catering] is off the charts,” says Phoenix-based restaurant industry consultant David Scott Peters, founder of TheRestaurantExpert.com. “You’re getting better margins because you’re not paying for all that it takes to make the restaurant [operate], like rent, utilities, and the like. And, in many cases, you are only paying for the product and kitchen staff to produce the food. Just about everything else necessary to cover the event can be passed along to the client.”

For restaurants working in the off-premises catering arena, the revenue pull is beyond appealing, particularly as restaurants can fill seats that don’t exist in the dining room.

“In our restaurants, we cater to four- and six-tops. In catering, we’re looking at 400- or 600-tops and an opportunity to do what we do in the restaurant at a much greater level,” says Brent Fuller, brand leader at Flying Biscuit Café, a chain of 14 restaurants scattered across the Southeast.

That spurs impressive revenue at reduced costs, Fuller notes, but also offers the company a high-value marketing opportunity, as Flying Biscuit can translate its restaurant experience into a different environment and bring its brand to customers rather than waiting for customers to walk through its restaurants’ doors.

“You can never assume people know who you are and what you do,” says Fuller, whose team often leaves Flying Biscuit Café menus and bounce-back coupons at its catered events to promote visits to the chain’s restaurants.

Indeed, the ability to connect with new guests, many of whom might be unfamiliar with the concept, cannot be discounted when considering off-premises catering, says Thaddaeus Smith, executive chef of Sterno Products, a portable warming and catering equipment company headquartered in Corona, California.

“The exciting part about off-premises catering is that you’re exposing your brand and product to so many more people,” Smith says. “It’s grassroots, viral, word-of-mouth marketing that can pay off big because you can’t experience restaurants virtually. You have to dig in.”

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Spend to Succeed
Over the years, Fox Bros. has invested in a fleet of vehicles from delivery vans to refrigerated trucks, an absolute necessity to ensure food arrives safely and efficiently at the off-site venue. “You always need more and better equipment to make the jobs easier for staff and safe for guests,” co-owner Jonathan Fox says.
Other equipment needs depend on the extent of the job, but the list of must-haves can mount, including minihot boxes, wire racks, foil pans, chafing fuel, containers to transport food, coffee urns, chafing dishes, platters, and serving utensils.
Full-service caterers like Urban Kitchen Group, meanwhile, are often building temporary kitchens, pitching a tent and bringing in ovens and refrigeration to prepare meals on site. In such cases, portable and versatile cooking appliances like an induction cooktop drive performance.
“One of the most frequent problems with off-site catering is that caterers do not have the right equipment to present themselves in the proper way,” confirms consultant David Scott Peters, adding that renting equipment, once a practice of last resort, is becoming more commonplace across the catering industry.
On the management side, Fox touts software that can streamline planning, communications, inventory, finances, and execution. He uses Caterease, a popular software program in the catering world, though even data from a point-of-sale (POS) system can help operators analyze past sales history, the menu mix, and costs to better guide the business. In many cases, the POS can be tied to online ordering to offer clients convenient, hassle-free ordering.

Smith, in fact, says it’s hard to imagine a full-service restaurant ignoring catering’s possibilities. “From the production standpoint, you’ve got it down with the menu and kitchen know-how,” he says. “Plus, it’s easy for a restaurant to schedule in production because these events are planned in advance rather than something spur of the moment. Catering is really just an extension of what is already happening in the restaurant.”

That’s certainly true, acknowledges Tracy Borkum, owner of the San Diego–based Urban Kitchen Group, but it’s also important for restaurants to recognize that off-premises catering often means adding more staff, purchasing delivery vehicles, acquiring equipment for events, and dealing with myriad other expenses that can quickly escalate.

“Sometimes people rush into off-premises catering because they’re convinced it will grow their revenue, but fail to take the bigger picture into account,” says Borkum, whose Urban Kitchen firm includes the heralded CUCINA urbana and CUCINA enoteca restaurant concepts in Southern California.

That’s why Borkum has taken a cautious, baby-steps approach to growing Urban Kitchen’s catering arm over the last dozen years. As business has increased, she’s slowly added personnel, storage capacity, and vehicles, and is now investigating a catering facility after years—perhaps too many, she confesses—of relying on her restaurant kitchens.

“Catering gets frustrating for the restaurant team because we’re constantly pulling from the restaurants, which are already busy and taxed, and battling them for space,” she says. “We need to find a balance because we never want to affect our restaurant business.”

Finding that healthy balance between catering and restaurant operations, of course, is one consideration, but far from the only one. There’s the overall brand experience and food safety, including a thorough understanding of how food needs to be prepared, transported, set up, and served. “It only takes one bad event to mar your reputation,” Smith reminds.

A spirit of adaptability is also essential. Caterers, after all, never know what troubles the day might bring, from a flat tire or traffic snarls to weather or faulty equipment. While operators are largely prepared for a trip-up here or there inside the restaurant, service can implode at an off-site event when the team lacks the experience to fix problems. “You better be able to adapt quickly and react intelligently,” Fox says.

Setting (and Serving) Expectations

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It’s best—and often most profitable—to sell customers on the idea of a headache-free event, showing the restaurant’s ability to be a professional outfit that can solve common pain points and provide a special event rather than competing on price. That’s the advice from consultant David Scott Peters, who adds it all begins with clarity and communication, something best achieved with a contract that defines expectations for both the caterer and the customer: what needs to happen—or will happen—and when.

“A contract also provides a more professional look and inspires confidence that your restaurant will get the job done,” Peters says.

Then, operators must execute on their promises, being detail-oriented planners leading up to the event and effective, on-site troubleshooters. Peters suggests operators create a checklist of everything they need and that they come prepared with extras of critical equipment, such as propane tanks, Sternos, and chafing dishes. “Make sure you have everything you need right down to the salt shaker because the kitchen as a security blanket isn’t there,” he says. “You have to be on top of it.”

As a restaurant’s catering arm grows, its staff will likely need to expand as well to ensure a seamless, professional experience. As Fox Bros. Bar-B-Q’s catering division has swelled, so, too, has its team, which now includes 20 commissary workers, a five-member sales team, 10 delivery drivers, and about 25 service personnel.

“People are really the most important piece of the puzzle,” says Urban Kitchen’s Tracy Borkum, who has also developed her catering team and increasingly established definitive lines between catering and restaurant operations. “It’s been an evolution for us and, hopefully, a fluid one.”

Having a committed roster of team members also reduces the need to rely on staffing agencies or temporary workers who are not as familiar with the brand’s standards. “From bartenders and bussers to servers, you want a high standard of service that is reflective of the brand and a team that knows how to deliver,” Borkum says.