Selling a Food Service & Catering Business

Most Food Service & Catering businesses sell on a multiple of SDE (owner-operator earnings) or EBITDA (manager-run). Pricing depends on event-level margins, food cost control, staffing depth for weekends, and how transferable venue and corporate relationships are. Buyers usually pay more when you can prove job costing on representative events and the calendar is diversified by channel. For a quick estimate based on real transaction data, use Rejigg’s free valuation calculator.

Deposits usually stay in the business because the buyer will fulfill those events, but the deposit balance is treated as a liability. Buyers will ask for a schedule by event date showing amount collected, refundability, and when final payment is due. Many deals adjust working capital or purchase price so the seller is not effectively paid for unearned revenue. Rejigg makes it simple to share a deposit ledger tied to the booked calendar under NDA.

Yes. SBA 7(a) financing is common for profitable catering companies, but lenders will want clean financials, documented add-backs, and earnings that still work after normalizing owner pay and one-time costs. Catering-specific lender questions often include deposit liabilities, customer concentration (one venue or corporate account), and whether the business can run without the owner on event days. You can model payments and down payment scenarios with Rejigg’s SBA loan calculator.

It depends on seasonality and where you are in the event calendar. Many owners avoid closing right before peak wedding and holiday seasons unless the buyer is ready for a fast operational handoff. From listing to close, plan time for marketing, buyer calls, LOI negotiation, diligence on the calendar and deposits, lease and compliance review, and lender timelines if an SBA loan is involved. Rejigg keeps buyer conversations, offers, and diligence checklists in one place.

No. Brokers often charge 5–10% to manage buyer access and run a process you can run yourself if you stay organized. Rejigg gives you access to pre-vetted buyers, digital NDAs before any sensitive sharing, a data room for financials, contracts, and equipment lists, and offer tracking so you can compare terms side-by-side. Sellers can run the process without paying a commission because buyers pay, not sellers. Start with the preparation guide.

Most buyers focus on gross profit and SDE/EBITDA, and they normalize out pass-through charges that inflate revenue without adding margin, like rentals paid straight to a vendor, third-party staffing, or certain bar packages. The clean approach is to separate revenue lines for food, service fees, delivery, and pass-through categories, then show job-costed margins on representative events. This usually lowers buyer skepticism and speeds diligence. Rejigg’s data room structure helps you present the breakdown consistently across years.

Seller financing is common, especially when the buyer wants help transitioning venue and planner introductions or wants confidence the booked calendar will execute smoothly. Earnouts tend to appear when revenue is concentrated in a few relationships or when seasonality makes near-term results harder to predict. Clear documentation of calendar status, deposit terms, and event profitability can reduce the need for contingent pricing. Rejigg’s offer comparison dashboard helps you evaluate cash at close, notes, and earnouts side-by-side.

In catering, working capital often comes down to timing: deposits collected for future events, vendor prepayments, payroll cycles, and corporate receivables on net terms. Buyers may ask for a “normal” level of working capital to stay in the business so they can buy product and staff events immediately after closing. Deposits can distort cash, so buyers usually want a deposit liability schedule alongside payables and receivables trends. Rejigg helps you share these schedules securely during diligence.

Sometimes. It depends on whether the venue relationship is institutional and team-based or personal to the owner. Buyers will ask if you are on a formal preferred list, what insurance minimums apply, whether tastings are required, and whether the venue re-approves caterers after a sale. A planned transition with warm introductions to venue coordinators and planners reduces risk and can support a higher price. Use the transition planning guide to map introductions.

Most buyers ask for three years of financials and tax returns, a booked calendar export with booking status, your deposit and cancellation policy plus a deposit ledger, sample proposals/BEOs, a vendor list, a staffing roster and role coverage, an equipment and vehicle list, a lease or commissary agreement, permits and inspection history, and insurance certificates (including liquor liability if applicable). Rejigg’s data room is built for this, with organized folders, controlled access, and fast sharing after an NDA is signed.

Closing right before peak season can work, but the buyer is learning the business during the hardest weeks. Many buyers will ask for a more structured transition plan or added protections like holdbacks or an earnout tied to performance through the first big weekends. If you have flexibility, consider closing well before peak to train the new owner, or just after peak to show strong trailing results. Rejigg helps you map timing using the prepare guide.

Common red flags include unclear deposit and refund practices, no event-level profitability, heavy owner dependence for quoting or event execution, repeat food safety citations or missing logs, a lease or commissary agreement that cannot be assigned, and customer concentration (one venue or corporate account drives most revenue). Buyers can live with normal imperfections, but they want predictable systems and straight answers backed by documents. Rejigg helps you share information in an orderly way so issues show up early, not at the finish line.

Most deals include equipment in the sale unless it is specifically excluded. Buyers will want an equipment and vehicle list with make, model, serial, age, and condition, plus a note on what is mission-critical (walk-in, combi, hot boxes, vans). They care less about original cost and more about reliability and replacement timing because breakdowns happen on event days. If the buyer uses financing, the lender may request an asset schedule. Rejigg’s data room is a good place to store and share the list.

Most small catering deals are asset sales, where the buyer purchases equipment, contracts, and goodwill rather than the entity. Buyers often prefer this to limit unknown liabilities tied to past payroll, sales tax, or claims. Sellers may prefer a stock sale for tax reasons, but it is less common. Purchase price allocation across equipment, goodwill, and a non-compete can change the tax bill a lot, so it’s worth modeling with a CPA before you sign an LOI. Rejigg’s deal tracking helps you compare offers with different structures.

A reasonable transition is usually calendar-based. Many buyers want enough time to introduce key venues, planners, and corporate contacts and to support a handful of high-stakes events, like the first big weekends after close. Specificity helps: which months are covered, weekly hours, and what decisions the seller still handles (pricing changes, tastings, partner introductions). A clear plan keeps the team steady and reduces early execution errors. Rejigg includes a framework in the transitioning guide.

It depends. Small, well-documented improvements can help, especially if food costs rose and pricing lagged, but abrupt changes can confuse repeat corporate clients and venue partners. Buyers usually respond better to disciplined updates: a written pricing review cadence, clearer change-order language, and consistent enforcement. If you tighten deposits or cancellation terms, show what changed, why, and a few months of results so it looks planned. Rejigg helps you present the narrative and supporting data cleanly during diligence.

Confidentiality matters in catering because rumors can spook venue partners, planners, staff, and corporate clients. A safer process withholds partner lists, calendar exports, and top-account names until the buyer is qualified and has signed an NDA, then shares details in stages. Rejigg supports this workflow: buyers are pre-vetted, NDAs are signed digitally before access, and you control which documents each buyer can see in the data room. More detail is in the finding buyers guide.

Seasonality is normal, but buyers will want to underwrite it with proof. Show multi-year monthly performance, how far out different segments book (weddings versus corporate drop-offs), and what drives peaks, like annual corporate events or venue pipelines. It also helps to show how costs flex in slow months: reduced event labor, menu simplification, and whether fixed facility costs stay manageable. Job-costed event examples from peak and off-peak months make the story more believable. Rejigg’s data room helps you organize seasonality support for diligence.

Compare offers on terms, not just price. In catering, the outcome often hinges on how deposits are treated, working capital targets, the transition workload through peak season, and whether any earnout is tied to things you cannot fully control, like venue coordinator changes or cancellations. Line up enterprise value, cash at close, seller note terms, contingencies, and timeline side-by-side. Rejigg’s deal tracking and offer comparison dashboard are built to make those tradeoffs clear before you sign.