Ingrid's picture
Service Fee

Service Fee

Does anyone out there have some different options for the term "Service Fee"? We currently use "Admin/Operations Fee", but I'm wondering what else everyone has come up with. Just to clarify this is our internal fee to cover overhead...not a gratuity to the staff. Thoughts? And if anyone has a really great description of what it covers, I'd love to hear it! I just need to refresh our terminology a bit. Keep it hip, happening, now, wow...don't ya' know!

Ingrid's picture

I can't believe I never saw

I can't believe I never saw all of these wonderful posts. I will be excited when the system emails you to let you know someone has written a response to your post...I for one, like that feature.

Anyway...I have to say that my very favoritist of all time is the description that Debi gave: "If you want to understand what the service fee covers, you can come by my kitchen, pick up the foods and set up your event yourself." AMEN to that!

I think that if anyone (meaning general public) knew what we go through to execute an event, they would get it and would probably pay even more. Every once in a while we have "hands on" cooking demo in our most rewarding moment is when the guests say "wow...I had no idea this was so hard".

Thank you everyone for your posts. If anyone has more suggestions, I'm all ears!

Ingrid Nagy
Owner - Catering by Design

Kim James's picture

I charge a 15% "service

I charge a 15% "service charge" which covers automobile expenses, administative fees, ice delivery, trash removal and prsentation flowers that I use (mateched up with the clients color/type) I started charging a Service charge after going to a Boot Camp w/ Bill Hansen.

I used to get questioned all the time when I would charge indiviually for adminstration fee, ice, trash etc.... I very seldom get any question on the "Service charge"

When I invoice the client I always put a tag: Staff Gratuity is Appreciated: You have 12 staffer

Occasionally clients will ask if the service charge is gratuity and I say no, we leave that to the discretion of the client and then lead them to the area in the proposal or contract which states what the service charge covers.

Jeff- We do a number of

Jeff- We do a number of different levels of catering, so Onsite Operations Fee works really well for us.

1) If you pick it up it is $10 (for grins)for menu plus disposables
2) If I deliver it to your door it is $10 + $35
3) If I deliver it and set it up with wire chafers, sterno, table cloth & 1 or 2 other items it is $10 + $100
4) If I deliver it and manage our standard buffet (managed only) for 1 hour it is $10 + $150
5) If we are doing full service then we charge a sliding percentage based on our transport and labor costs. usually from 15-21.35% (thanks Mike Roman)

Any special labor is a line item, such as station cook, synchronized waiters, valet parkers, bartenders, saloon girls (the best. THE BEST)

This way my customers know what they are paying for the food and can add any level of service they desire. Makes things very straightforward when they are looking for a deal. Since everything is a line item I can say: I see what you are saying Bridezilla, this IS more than you were looking to spend, what would you like to cut off of the pricing addendum? I don't negotiate my prices, only my level of service and upgrades (not really negotiate, more like take it or leave it.)

John Homrighausen
J-BAR-H Texas Foods, LLC
Texas Foods, Texas Style

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Debi Brim-Indpls's picture

fire4hire, it took me awhile

fire4hire, it took me awhile to figure it out, but if they come to pick up the food in to-go containers at my shop, the price of the food is the same. The cost of the food covers the time to prep and cook it.

If they want me to do an offsite catering, then the service fee covers the time it takes my staff to load the van full of equipment (that's not used for a to-go order); unload it at the venue, set up the buffet, service the buffet, tear down and clean up, drive back to the shop, unload the van, clean up the equipment and put it away. It covers the extra expenses like extra ice to keep cold foods cold (not needed in a to-go order), extra equipment to keep hot foods hot, etc.

I don't see that as double dipping. I see it as covering the extra expenses incurred when doing an off-site catering for them.

Hope that helps. :-)
Debi "My grandchildren call me Banna" Brim

Upon reading the responses

Upon reading the responses to the "service fee", it sounds as if you are quoting a lower price for the event to get the job and then adding on your overhead, isn't this double dipping? You are already factoring in your cost and overhead in your price, why should you be charging for it all over again, that's like a mechanic charging you for the use of his tools to repair your car, I think we would be very angry if that happened to one of us. Maybe I don't understand.


Georgia Rafati's picture

Recently I have modified my

Recently I have modified my 'service charge/admin fee/whatever you want to call it' to something ever so simple: Catering Services

So, I line item Food, Beverages, Rentals and Labor. The last item on the invoice is 'Catering Services' stating it is covering in part licenses, insurance, transportation, misc. catering equipment, light decor.

We'll see if I settle on this as a keeper, but for now it has evoked
no questions or protest.

David- love the "Offsite

David- love the "Offsite Operations Fee" Used it in a proposal today.

John Homrighausen
J-BAR-H Texas Foods, LLC
Texas Foods, Texas Style

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Follow us on Twitter @jbarh
read our blog @

Debi Brim-Indpls's picture

I fought the "tradition" of

I fought the "tradition" of adding a service charge, but finally tacked one on there. My thoughts were the same as yours ... shouldn't the cost of the meal be included in the cost of the meal?

Two things that influenced my change in attitude. (1) My base price per meal was higher than other caterers since it was all inclusive. However, clients didn't look at the total picture (i.e. the cost of the other guy AFTER he added the service and other charges) and see that the other guy was actually costing them more than me. They just looked at the base price and decided he was a better deal. So it was hurting me competitively. Clients were not able to compare apples to apples.

(2) The pre- and post- event labor costs were racking up. I was growing to the point of having to rent an extra truck or van. I found myself doing a lot of the pre-event work myself to save on payroll. I finally figured out that all of that pre- and post- work is ALSO part of the cost of the meal. (duh!)

(3) If a client wanted to do a pick-up instead of a staffed event, I'd give them a discount (since I wasn't incurring the staffing and travel expense). I finally figured out that it was better NOT to add on a 20% service fee (and sell it with "You can save $200 with your choice to pick up the foods") than to take in less income.

I'm sure all of this sounds so common sense to those who have been in this industry for the long term, but sometimes it takes me awhile to catch up! :-)

I saw a catering website once that explained perfectly what a service fee covers: "If you want to understand what the service fee covers, you can come by my kitchen, pick up the foods and set up your event yourself."
Debi "My grandchildren call me Banna" Brim

Ingrid et. al, I don't have

Ingrid et. al,

I don't have a good answer for you, as I don't add on a service charge. I hope you won't mind if I open this up a bit and ask the purpose of the service charge and how it differs from the regular cost of catering. In my operation, I charge separately for food, rentals, staff etc., but do not add on any charges because all of my costs and profit are covered in each individual section. I was just curious to know if your per-person food charges were less than normal? Or do you not charge fully for staffing and make it up with the service charge?

Looking forward to hearing about how others do this.


annette aaron's picture

Service fee/administrative

Service fee/administrative fee sounds good. In the archives there is an excellent description that Dawn posted about a year ago.

Bryan Young CPCE's picture

Bryan Young CPCE I started a

Bryan Young CPCE

I started a service charge 3 years after I started in business. Mike Roman suggested we try support fee which he said other caterers had used. It works very well for us in our market and I'm sure we are the only company that is doing this in our market. Many do have service charges. Corporate clients never ask what it means and social clients ask but we explain it as a over head cost, insurance etc. Never have a problem and many clients still tip the staff.

David in Niagara's picture

Niagara Gourmet will add an

Niagara Gourmet will add an Off Site Operations Charge for all catered events.
This fee includes but is not limited to travel, vehicle expenses, liability insurance and sanitation, etc.
This Charge is not a service gratuity and is not paid to the service staff working your event.
Gratuities are optional and always appreciated.

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