Aug 15, 20236 min read

Legal Advice For Starting A Catering Business

Updated: Nov 27, 2023

Are you starting a catering business? For those with a passion for food, running a catering business can be a dream come true. Catering involves long periods of hard work but it can also offer flexible working hours and enable a work/life balance as you can target and choose the types of events you’d like to cater. These may be weddings, other social events or corporate events. Furthermore, you can target particular meals, so you can offer breakfast buffets or evening buffets and this can enable you to work during your preferred working hours. Or, you may wish to specialise in concession catering.

Many catering business owners consider it a privilege to be a part of a special event or celebration and take pride in offering delicious food and high-quality service to enhance the experience. However, running a catering business is not easy. You will need excellent time management, the ability to offer consistent quality standards and you may often be working to tight deadlines in high-pressure situations. For this reason, and to reduce initial set-up costs, many catering businesses scale up at a steady, manageable rate, taking on more and more events over time to build resilience and develop processes. Besides, there is quite a bit of work that goes into setting up a catering business that does not involve any cooking or food preparation at all.

When setting up any business, there are various tasks to complete, registrations to apply for, documents to get in place and various things to learn so that you stay compliant with legal regulations.

Most UK businesses will need to:

Register as a sole trader with the HMRC and/or as a limited company with Companies House
Choose a business name, check availability and secure a domain
Register a trademark (if necessary)
Obtain a privacy policy and cookie consent for your website
Establish terms and conditions
Comply with data protection regulations
Organise your insurance

For more details on the above essentials, I have written a whole guide to Launching A Start-Up In The UK but for this article, we’ll ignore the more general to-dos so we can focus on particular steps you need to take and legal advice you should know as a start-up catering business.

Registering A Food Business

As well as registering your business with either Companies House and/or registering yourself as self-employed with the HMRC, you’ll also need to register a food business with your local authority. As a catering start-up, you will fall under the ‘food business’ category, as does any business that:

Stores or handles food
Prepares food
Cooks food
Distributes food
Sells food

Registering a food business should be done with your local authority and must be done whether you are starting a food business or taking over an existing business. You should give plenty of notice before you begin trading (preferably 28 days) but there is no fee and registration will not be refused, though it is a necessary formality.

You can find the relevant authority to register your food business with at Gov.uk

Food Safety And Hygiene

Most likely, you’ve already had some experience in the food industry if you’re starting a catering business. Therefore, you will be familiar with adherence to food safety and hygiene standards.

It is not a legal requirement for catering companies or their staff to have food hygiene and safety certificates or qualifications, however, your clients will likely expect you to have some. Not having undergone food safety training could also impact what you pay for, or even your ability to secure, business insurance.

Therefore, although not a legal requirement, some training should be undertaken and procedures should be put in place and communicated to all staff. A food safety risk assessment can help you to identify potential risks and create a plan for protecting your staff, your clients and your business.

Licenses For Catering Companies

As a caterer, you most probably won’t need a trading license as the event venues are likely to have this covered. However, you may need an alcohol license if you are supplying alcoholic beverages in addition to food.

You will require a license to sell alcohol if you are providing alcohol in an unlicensed premises but if the premises is licensed this should cover you as well. At least one person in your business will also need to hold a personal licence if your business is selling alcohol. To hold a personal license you must complete a course and pass a test. Here are some personal license course providers. For premises licenses you can apply here and for temporary premises licenses you may find out more here, although premises licenses are usually the responsibility of the event organiser.

Cancellation Policy

As a business that will order supplies to meet demand, you must have rigid business processes that protect you from losing money due to the cancellation of bookings. If you are a smaller business, you can likely only take on one event at a time and you may have to book in and pay staff to assist you, aside from the food you will need to order in to fulfil the catering demands. Therefore, your cancellation policy should be well thought out and communicated to every client.

A cancellation policy is usually part of the terms of business or terms and conditions contract. Note, the word ‘contract’, means it needs to be agreed and signed to be enforceable. So, before you make any plans and especially before you spend any money, you need a signed contract to confirm each and every booking and this should clearly lay out your cancellation policy.

When selling goods and services, most businesses must provide customers (if they are individuals and not businesses) with a cooling-off period so they may change their minds within a period of time after having made an order and/or signed an agreement. However, as a catering business, you are exempt from this trading regulation and don’t need to write a cooling-off period into your contracts. If a cancellation has been made after expenses have been incurred then you also have the right to retain a portion of the deposit to recover your losses. This should not be interpreted as a fine or punishment for the event organiser but used as a fair means to recover costs.

Note that unreasonable cancellation policies, in which excessive amounts are to be paid by the customer, may be unenforceable and seen as a ‘penalty clause’. If this is the case it would be seen as unenforceable and then your terms would have no cancellation fees at all. Therefore you need to ensure your cancellation policy is drafted fairly and that the amounts the client has to pay are reasonable and represent a genuine pre-estimate of the amounts of money you have already spent on the catering event, or if the cancellation is late, you need to consider whether it is too late to book another client - if so, then that can be factored in as well.

Some catering businesses have a sliding scale of cancellation fees - depending on how close to the event date the customer cancels. For example:

24 hours before the event: 100% of the fees are due

Between 1 week and 24 hours before the event: 75% of the fees are due

Between 1-4 weeks before the event: 50% of the fees are due

More than 4 weeks before the event: 25% of the fees are due

These time scales and amounts are just an example - you need to consider what is reasonable - it will all depend on the nature of your business and the surrounding circumstances (have you had to pre-order food, recruit extra staff, pay deposits for a venue, etc).

When deciding on your cancellation policy it is worth considering your business reputation as well as financial protection. In cases where an event has to be cancelled due to circumstances beyond the client's control, such as weather or health emergencies, it can be better in the long run to make allowances, especially if the event is going to be rescheduled or if the company may book you for future events.

This can be difficult to specify in your cancellation policy which is why it’s often best for a commercial lawyer to create a bespoke catering contract or terms and conditions for you.

A professional lawyer will be able to ensure the contract is fair and reasonable, as well as clear and concise. Overly complicated or unreasonable contracts may put off potential clients and may not be able to protect you should a dispute arise. Please do get in touch if you need a catering services contract or terms of business created for your catering business.