In-house catering or letting clients bring their own caterer: which should your venue choose?
As a venue, you face a choice that affects your revenue, planning and client satisfaction: do you run your own catering team, or let clients bring in their own caterer? Both routes come with trade-offs that go beyond the margin on food and drink. This article covers what the difference means for your revenue, how to set up a commission or corkage arrangement if you allow external caterers, and what to agree on with both your own kitchen and outside suppliers.
Why this choice goes beyond the margin on food and drink
With your own catering team, you earn on every event you hire out: food and drink are often one of the most profitable parts of a venue. The trade-off is that you have to run a kitchen, staff and stock yourself, including during quiet periods with nothing booked in. Let clients bring their own caterer, and that burden disappears, but so does a chunk of the revenue and your control over how the food and service actually look on your premises.
Commission or corkage: how to set it up
If you allow external caterers, charge a fee rather than opening the door completely. The two common approaches are commission, a percentage of the catering revenue, often between 10 and 20 per cent, and corkage, a flat fee per guest or per event. Corkage is easier for both sides to understand and administer than a percentage you might end up disputing afterwards. Set this out in your venue contract upfront, not as a surprise once the invoice has already landed.
Working with a preferred caterer as a middle ground
Many venues choose a middle path: one to three preferred caterers you recommend to clients, without running a kitchen yourself. That gives you more control over quality than a fully open policy, and the caterer gets exclusivity or a guaranteed stream of enquiries in return. Agree how quickly the caterer responds to enquiries, what pricing applies for your clients, and who's the point of contact if something goes wrong on the day.
What to agree on, whether it's your own kitchen or an outside party
Whichever route you choose, always agree a few things: set-up and pack-down times for catering, who can use which part of the kitchen or grounds, who's liable for damage or an incident, and who's responsible for the alcohol licence. Also agree who takes final responsibility to the client if something goes wrong with the catering during the event, the venue, the caterer, or both with a clear split.
Want to stop working out these agreements and rates from scratch every time? Try Catermonkey for free and set up your preferred caterers, commission terms and venue conditions once.
Frequently asked questions
What earns more: in-house catering or allowing external caterers?
In-house catering gives a higher margin but more responsibility. Allowing external caterers needs less management, but earns less unless you charge commission or corkage.
How much is a typical commission for external caterers?
Often between 10 and 20 per cent of the catering revenue, or a flat corkage fee per guest instead of a percentage.
What's the difference between commission and corkage?
Commission is a percentage of the catering revenue, corkage is a flat fee per guest or per event. Corkage is easier to communicate and administer.
What's a preferred caterer?
A fixed partner you recommend to clients as a venue, in exchange for exclusivity or a guaranteed stream of enquiries. It gives you more control than a fully open policy.
What should you agree with a caterer, in-house or external?
Set-up and pack-down times, kitchen use, liability for damage, who handles licences, and who takes final responsibility to the client.
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