A client wants to bring their uncle's barbecue company, or a caterer they used at their last company event, instead of anyone on your list. You can say yes, but that vendor has never loaded into your building, does not know your kitchen and will need more of your staff's attention than a caterer who has worked there twenty times.
An outside vendor fee is how venues recover that extra cost. Set well and worded plainly, it lets clients keep their choice without the venue absorbing the risk.
What Is an Outside Vendor Fee?
An outside vendor fee is a charge a venue adds when a client hires a caterer, bartender, rental company or other vendor that is not on the venue's preferred or approved list. It covers the extra supervision, cleaning, administration and risk that an unfamiliar vendor brings. The fee is usually written into the rental contract and billed to the client.
What the Fee Actually Pays For
Clients accept a fee more readily when they can see what it covers. Be ready to explain it in specific terms.
- Staff time to walk the vendor through the building, kitchen and rules
- Extra supervision during load-in, service and load-out
- Additional cleaning, especially kitchens and back-of-house areas
- Reviewing insurance, licenses and permits before the event
- Revenue the venue forgoes from preferred vendor commissions
That last item is real for many venues. If your preferred caterers pay a commission or your in-house bar earns margin, an outside vendor replaces income the venue budgeted on. Say so only if it is true for you.
Common Ways to Structure the Fee
There is no single standard. Venues tend to pick one of four structures based on which vendors they see most and how much work each type creates.
Flat fee per vendor
A flat amount for each outside vendor is the simplest to explain and quote. It works well for vendors whose impact does not grow with guest count, such as a florist or photo booth. Many venues set a higher flat fee for caterers than for other vendor types.
Per-guest fee
Outside catering creates more work as the guest count rises, so many venues charge it per guest. Consider a venue charging $8 per guest for an outside caterer. A 120-guest dinner adds $960, which pays for a kitchen attendant, extra dish and trash handling and the cleaning after a full service.
Percentage of the vendor's invoice
Some venues charge a percentage of the outside vendor's total bill. It scales naturally, though it requires the client to share the vendor's invoice and can feel intrusive. It is more common for catering than for smaller services.
Tiered by vendor type
A tiered schedule lists a fee for each category, for example caterers, bar services, rental companies and entertainment. It takes a little more setup and gives planners a clear answer before they ask.
Requirements That Go With the Fee
A fee alone does not protect the venue. Outside vendors should meet the same minimum standards as anyone on your preferred list, written into the contract.
- Certificate of insurance naming the venue as additional insured
- Valid business license and any required health or liquor permits
- Arrival and load-out windows that match the client's rental time
- Agreement to your rules on decor, kitchen use and cleanup
- A named on-site lead the venue can reach during the event
Set a deadline for paperwork, such as two to four weeks before the event. If the vendor has not provided proof of insurance by then, the contract should let the venue refuse entry or require a switch to an approved vendor.
Sample Contract Language
Plain wording works better than legal shorthand. Adapt this sample to your own policy, and have an attorney review any final contract language.
"Client may use vendors not listed on the Venue's preferred vendor list with prior written approval. An outside vendor fee of $[amount] per [vendor or guest] applies to each approved outside vendor and will be added to the Client's invoice. All outside vendors must provide a certificate of insurance and any required licenses no later than [number] days before the event. Client is responsible for any damage, cleaning or overtime caused by outside vendors."
Keep the actual fee amounts in your price sheet or proposal so you can change them without reissuing the contract template.
How the Fee Relates to Your Preferred List
An outside vendor fee works alongside a preferred vendor list. The list gives clients trusted options and the fee makes stepping outside it fair to the venue. If you require clients to use only approved caterers, an outside fee is unnecessary for that category, though you may still allow outside vendors elsewhere.
Review the fee once a year against what outside vendors actually cost you. Pull every event from the past year that used an outside caterer and compare the extra labor and cleaning hours to the fees collected. If the fee falls well short, raise it or tighten the requirements.
Explain It Before the Proposal
Mention the outside vendor policy on the tour and in the first proposal, so the fee never appears for the first time in the contract. A fee explained early reads as a policy, and one discovered late reads as a penalty.
Frequently Asked Questions
Can a venue charge a fee for outside vendors?
Generally yes, as long as the fee is disclosed and agreed in the contract before the event. Many venues charge outside vendor fees for catering, bar service and rentals. Local consumer protection rules vary, so have your contract reviewed by an attorney.
Who pays the outside vendor fee, the client or the vendor?
Most venues bill the client, since the client chose the vendor and signed the rental agreement. Some venues bill the vendor directly, which can work for repeat outside vendors. Whichever you choose, state it clearly in the contract.
Is an outside vendor fee the same as a corkage fee?
No. A corkage fee covers serving alcohol the client brings, usually per bottle or per guest. An outside vendor fee covers the extra work created by a vendor who is not on your list.
Should a venue waive the outside vendor fee for some clients?
Some venues waive it for a vendor that has worked in the building before without issues, or for nonprofit and repeat clients. Waivers work best when they follow a written rule, so the sales team applies them consistently. Waiving it case by case usually leads to clients asking for the same deal later.
