Where a catering buyer starts
- Events booked for the next twelve months and the deposits already taken
- Corporate and repeat accounts versus one time parties
- Lease terms on the kitchen and how many years are left
- Condition and ownership of ovens, vans and rental inventory
- Which licenses the buyer must get under its own name
The calendar and the deposits
Buyers want a list of booked events with dates, guest counts and fees. They also want to know how much each client has paid in advance. Deposits are money you collected for work the buyer will do, so the purchase agreement has to say who keeps them.
The usual answer is a credit to the buyer at closing for deposits on events after that date. Work it out early so it does not surprise anyone at the table.
Accounts that come back
A caterer with standing office lunches, recurring association meetings and a few venues that refer work regularly is worth more than one that depends on wedding season. Buyers like revenue that repeats.
Show it in the numbers. Group revenue by client type and by month for the last three years.
If one corporate client brings in more than about 15 to 20% of sales, expect the buyer to discount for it or ask for part of the price to depend on keeping that account.
The kitchen
For most caterers the lease is the single biggest asset outside the client list. A buyer will check how long it runs, whether it can be assigned, and whether the rent is at market. A cheap lease that ends next year is a risk, not a perk.
Talk to your landlord about an assignment or a new term before you go to market. If you own the building, decide whether to sell it with the business or keep it and become the landlord.
Licenses and permits
In an asset sale the buyer usually applies for a Basic Business License under its own entity, and it needs its own Clean Hands certificate. Whether anything carries over depends on the license, so check with DLCP.
A liquor license is different. It can change hands only after an application and approval by the ABC Board. If alcohol service is part of your revenue, start that conversation with your attorney well before closing.
DC filings a buyer will ask about
Buying a caterer means buying equipment and supplies, so the buyer has to send a bulk sale notice to OTR at least 15 days before paying or taking possession.
Our guide to the bulk sale notice explains why buyers often hold back money until your tax accounts are clear.
Your ovens, kitchen equipment and serving gear also show up on the yearly personal property return. When you stop operating, you mark the final FP-31; the purchase agreement says who pays which share for the year.
If your kitchen is in Maryland or Virginia, that state and county handle these instead. Ask your CPA how the equipment is treated for sales tax.
Pricing
Most caterers in this range sell as asset sales priced on owner cash flow. The valuation guide shows how buyers recast the books, including family on the payroll and personal costs run through the company.
To see where your company might land, send a request or call (202) 555-0174.