An exclusivity clause in catering means that you're the only supplier for a specific customer, location or event. This arrangement offers guaranteed revenue but introduces hidden costs that many caterers overlook. Understanding these risks helps you price exclusivity agreements profitably.
What is an exclusivity clause?
In catering, exclusivity means you're the only supplier for a specific customer, location or event. Think of:
- Exclusive caterer for a company (all lunches, events)
- Only food partner at an event venue
- Fixed caterer for a hotel chain
This gives you revenue certainty, but also comes with obligations and risks.
Extra costs of exclusivity
Exclusivity costs you money in ways you don't immediately see:
⚠️ Heads up:
With exclusivity, you can't say 'no' to orders. Not even if you're already fully booked or if the margin is low.
Availability guarantee: You must always be able to deliver, even on busy days. This means keeping extra staff on payroll and maintaining inventory.
Minimum service levels: Often there are agreements about response time, minimum quality and fixed delivery dates. This requires extra organization.
Opportunity costs: You can't take on other, potentially more profitable customers during the same period or location. I've seen this mistake cost the average restaurant EUR 200-400 per month - caterers lock themselves into exclusive deals without accounting for lost opportunities elsewhere.
Calculate your exclusivity surcharge
For exclusivity, you charge a surcharge of 15-25% on your normal catering margin. Here's how you calculate it:
💡 Example calculation:
Normal catering lunch: €12 per person
- Food cost: €4.20 (35%)
- Labor: €3.60 (30%)
- Other costs: €1.20 (10%)
- Profit: €3.00 (25%)
With 20% exclusivity surcharge: €12 × 1.20 = €14.40 per person
The formula:
Exclusive price = Normal price × (1 + Exclusivity surcharge %)
Factor risks into your calculation
Exclusivity brings specific risks that you need to pass on:
Volume risk: If the customer orders less than expected, you've still incurred the fixed costs. Calculate with 85% of the expected volume.
Quality risk: If problems arise, you're the only one who can fix it. No backup. Add 2-3% extra margin for emergency scenarios.
💡 Example risk surcharge:
Contract: 1000 lunches per month × €14.40
- Volume risk: calculate with 850 lunches
- Fixed costs remain the same
- Extra margin needed: €2.16 per lunch
Adjusted price: €16.56 per person
Contract terms that protect your margin
Always include these agreements in your contract:
- Minimum purchase: For example 80% of estimated volume
- Price adjustments: Annually or when ingredient costs rise >10%
- Cancellation policy: 48-72 hours notice, otherwise 50% of order value
- Force majeure clause: In case of staff illness or supply problems
When exclusivity actually pays off
Exclusivity can be advantageous if you can negotiate these conditions:
💡 Sweet spot scenario:
Corporate catering with 200 employees:
- Guaranteed volume: 150 lunches/day
- Contract: 2 years with annual price review
- Prepayment: 50% per quarter
- Margin: 30% instead of 25% normal
Annual revenue: €540,000 with €162,000 profit
This works because you have predictable revenue at a higher margin, and the customer also benefits (fixed price, no search costs).
Alternatives to full exclusivity
Consider these middle-ground options that carry less risk:
Preferred supplier status: You get first choice on new orders, but the customer can also engage others.
Category exclusivity: For example, only you can provide lunches, but others can do dinner catering.
Temporary exclusivity: 6 months exclusive, then evaluation and possible renewal.
⚠️ Heads up:
Never agree to exclusivity at your normal rates. The extra risks and obligations always justify a higher price.
How do you calculate the right margin for exclusivity?
Calculate your normal catering margin
Add up all costs (food, labor, transport, overhead) and determine your desired profit margin. For catering, 25-30% profit is standard. This becomes your starting point.
Determine the exclusivity surcharge
Add 15-25% surcharge to your normal price. With high risks (large volumes, long contracts), go to 25%. With low risks, 15% is sufficient.
Factor in volume risk
Calculate with 85% of the expected volume, but keep your fixed costs the same. This gives you the actual cost per portion if orders fall short.
Build in contract terms
Ensure minimum purchase guarantees, price adjustment clauses and cancellation terms. These protect your margin if the situation changes.
✨ Pro tip
Review your exclusivity margins every 6 months against actual volumes delivered. If you're consistently hitting 95%+ of projected orders, you've likely underpriced the exclusivity premium by 3-5%.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
How much surcharge is normal for exclusivity?
Standard is 15-25% surcharge on your normal catering price. This compensates for the extra risks and obligations that exclusivity brings.
What if the customer doesn't meet the agreed volume?
That's why you always calculate with 85% of the expected volume in your cost price. Also include a minimum purchase guarantee in your contract, for example 80% of the estimated quantity.
Can I adjust my prices during the contract?
Only if you agree to this upfront. Always build in a price adjustment clause for rising ingredient costs or annual inflation. Otherwise you're locked into your original price.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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