Percentages at festivals

Hello out there,
About 20 minutes ago I made almost this identical post but can find it nowhere so I am re-doing. Please forgive my ignorance if it's out there somewhere that I just can not find!
I am brandy new to the concession trailer world, just getting an estimate on my trailer, decided on a limited menu that can be expanded upon when I am ready, several conversations with the HD and researching festivals and events. I have a question regarding festivals that take a percentage of the gross. When filling out the vendor app do you add the percentage that they take to the menu prices they ask you to provide or do you give them the prices you would regularly charge?
I have been reading this forum avidly since I came across it while researching and have gotten more info here than anywhere else. Thank you all for all the great info on here.
 
 

lets see you are getting est. on a trailer, just putting a menu together,still conferring with the h/d. and you want to apply for an event?? did i miss sumpin??

Hello,
Nope not applying, just reading over lots of applications and checking out festivals and how they operate. I just want to fully understand how things go from folks who have been there. I have no plans to apply for any events until late fall at the earliest. 

You need to figure you what you are selling, how much you need to sell it for to turn a profit, then add in your cost of the event to your prices.
 
Out of this "profit" you need to account for all of your other  operating expences such as fuel to and from the event, propane, power, fixed costs such as vehicle and  trailer payments, auto insurance, business insurance, permits, licenses, labor, Ice, taxes,etc.
I know what I need to make daily to break even, not turn a profit, just break even.
You need to figure this one out otherwise you will go broke.
You need to know what the max $$ amount  is that you can serve in one day.
Don't be fooled by your one of three food vendors for 30,000 and think that you will serve 1/3 of them.
How much product can you physically produce in an hr or day?
This is an idea of how much money you MIGHT make.
 

Thanks for the reply! O.k. so say I've got my costs all figgered out. I see that some events charge a minimum against a percentage, for example $950.00 or 23%, whichever is greater. So in order to know which way I am going to be charged I have to figger out how many peeps I can serve for the particular event? At the risk of sounding like a dumbass am I getting this right?
If I am how do I arrive at the percentage of folks who might be interested in what I'm offering? I thought I'd throw this out and see what you think. An 8 hour event that attracts 10,000 with several vendors, some of them selling the same items. I am selling a completely different menu but my items are significantly higher priced. I was thinking maybe I could attract 6% or 600 which would work out to 1 person served every 0.8 minutes which seems totally unrealistic so I cut it in half to 300, 1 person each 1.6 minutes. If this number is the case I would go with the percentage. So when filling out the app I would give them my prices upped by the 23% I would have to pay, right? I hate math.............it makes my palms sweat!

I think this is in it's purest form is a great question, but at the same time you seem confused on part of the equation.
 
You asked When filling out the vendor ap do you add the percentage that they take to the menu price, or do you give them the prices you would regularly charge?
 
If you did the later you would take a hit on a percentage of your profit, but some say your paying the event owner/ promoter, for rent and the crowd.
 
Now that said isn't that similar to advertising your food and location? If you bought time on a local radio station, TV station, or newspaper, your spending up front money on advertising right, and you become the promoter and take what's left over from the profits as your own. Correct?
 
How are they not alike? I have had this thought for years and never written about it before. So blow me out of the water folks tell me they are different.
 
Now as to the part that I think you have misunderstood the contracts are usually written as follows. You are to pay $500.00 or 15% of your gross sales. It's usually not your choice, you pay a minimum of $500.00 or more if your reported gross sales are higher than the $500.00 entry fee.
I do several events a year and some don't even care if they get a check upfront because they know I'm going to gross way over the minimum and they get one check when we are done.Unless  I misunderstood your original scenario and yes I understand that still doesn't answer your question but I'm anxious to hear others answers.
Thanks for posting this question
Jack

I don't and wont do percentages for events...no one is counting my till and thats usually how they get there % by the way in my vast experience in this event business(LOL) i've come to think that those high priced events are hog wash !! 950 bucks to go hope you sell sh#@ ?? naw not for me I have found in my particular case i'll do the small local stuff and most don't charge a dime or just a nominal fee 20-40 bucks just did one didn't charge me a dime!! couldn't do enough to keep us for the next go around. all we do is offer good food at a reasonable cost to there attendees and believe me we were busy rom the time we opened the window till we closed it down had a runner go for food twice ...  J.M.H.O. & .02 worth  by the way got another biggie next week and no charge for that one either last year grossed...... pretty fair,,,, so just look at whats avail. think as we all say "outside the box.

Buck and The Dr have both hit on what I was also going to add.
I have done a few events with small fees, I won't pay for anything over $100, and the chances better be in my favor if I do pay that fee.
I won't do any %. No one is counting my till. I have done some local events (youth sports)where I have donated a % back because I had an idea of how much $$ I will be making from past experience.
There are plenty of small events to get into with small or no fees. This is also a good way to get your feet wet and test the waters.
Chances are that you are not going to go right out of the chute and hit something with 100k attendance, and pay 1000's in fees to do it.

Dr. BBQ-I absolutely get what you're sayin. Bottom line- I'd be paying a whatever-the-event-percentage is premium to put my business in front of a crowd of the magnitude I described earlier. So to put it another way I guess I would need to ask myself if it is worth it to pay 23% (or whatever the percentage is) to get the crowd numbers or to do as
B&V's suggests and stick to the smaller events, charge less and potentially make close to, if not the same amount.
Also, I realize that I do not have a choice between a percentage or a minimum charge at these events but need to know what numbers I could expect at a large event to decide if participating is worth the expense or rather, how many extra peeps I'd need to serve to make up the difference to cover the percentage paid out.
I checked out an event this past weekend that I thought I might like to get into in the future and found vendors were only allowed to take tickets for anything ordered, 1 ticket being 1 dollar. As a customer I could only pay for any food or alcohol with a ticket that I had to purchase at a ticket booth. This way the venue only pays the vendor for the amount of tickets turned in. I was not diggin this idea at all.  It screamed Big Brother and I knew there was no way I would apply to this event. I will keep my options open, try to think outside the box, but also realize that established  events that put up big numbers could get me exposure that would take me some time to get if choosing only small venues.
So that leaves the other question I asked unanswered-figgerin out how many are gonna want what I'm offerin. What say you all on that?

lmao....... if i set up at a place that wants 23%, and the promoter is throwing around numbers like 20,000 will be here, and only 6 thousand show up, is he going to knock off 80% of the 23%... i dont think so
i would stay away from percentages if at all possible.......
i have tossed around "freaky friday" a few times on threads, 5-7k strong crowds at the drag strip here first friday of each month(captive crowd from 7pm until 7am next morning)..... was offered 100 bucks for first time to get in there due to a mutual friend, but after that he wants 40% (just like nascar) to set up..... call me crazy, but even if i go out there and make 5 grand, im going to have a real hard time handing over 2 grand of it at the end of the night....
 
if i did agree to a percentage, it would have to be a percentage of my net.... after all my expenses were accounted for
 
"Now that said isn't that similar to advertising your food and location? If you bought time on a local radio station, TV station, or newspaper, your spending up front money on advertising right, and you become the promoter and take what's left over from the profits as your own. Correct?"
 
im pretty sure my advertising of choice can be spot marketed, and be stretched out for a lot longer then an 8 hour event..... when i advertise, the entire 100,000 people in town have a chance to see/here it and come see me, not just the few thousand that might come to an event i am at. 

but to answer your question......
there is no iron clad way to determine how many will come to you.....depending on other vendors, time of day, weather, etc... etc.... i think 3-5% might be a reasonable rule of thumb to go by

The event fee or percentage is a 'cost of doing business'.   The same as rent & advertising, ect.   Yes, it should be included in your menu prices if not already included; or if more than the normal cost, add the difference.   ... Unless, you can justify not doing so because of large volume of sales and your willingness to except less profit margin.    .... Just remember, you most likely will not be the only vendor with the same menu and very few vendors actually do the volume of business the even promoter indicates.    .... 23% of gross is high and higher than your normal companionable cost you would have used to deliver a good product at a fair price.    .... I suspect if not included, you will lose money or break even at best.
 
The decision should be easy, recalculate your food cost, and overhead cost with the event fee included.  Look expected profit if you serve at capacity (you ability) and minimum sells to break even.

well ...see i look at it big picture for us, we have a regular spot thruout the week soooooo. we do the smaller local stuff to get our name and food out to the local guys that could visit us during the week too. the car shows, biker bar, paint ballers, art & crafts shows stuff like those. so figgering that way about advertising i guess we are getting a super deal on that with the local market. i checked into a local paper adv. and a bussness card ad was 100 bucks  with a circulation of about 3000 so i think i get a better deal out with the events. just my.02 worth. there out there, and the more you do the more others you get, they come to you then.

Some thoughts on this topic.
 
If you do a regular gig every day and leave that location to do a small event, you lose your daily crowd (for that day) and still pay rent for that location. Often you have to have additional staff to handle the event crowd and pay what ever fee or fees (electricity, inspection fees) that are involved.
 
If your doing an event using tickets you have to round up or down your prices so they are in single dollar amounts. (you can't charge $3.50, $3.75, or $4.25) for any food item.
 
I have done an event (last summer) that had an electrical problem and they lost power to the entertainment stage area at 3:00 pm and didn't get it back until after 7:00 pm. People left in droves after about an hour and a half of no power. But that said we were still close to our normal gross which tells me we would have  had a killer event if the power would have been on for the entire time By the way that is a  up front fee plus 15% and ticket event.
 
Yes advertising isn't going to bring you a giant crowd in one day and it may increase your overall sales  over a longer period of time as long as you keep advertising. But your increase will diminish over a like period of time if you stop advertising. I retired after 27 years in radio.
 
I was asked to do the Pinks Drag Race event is St Louis 2 years ago. They wanted 25% of food sales and 40% of drink sales. I declined the invitation after some thought, because I would have had to charge $8.00 for a Smoked Pulled Sandwich. But when I went to the event as a spectator, people were paying $8.00 for a cheeseburger.  Go figure.
 
Never have I heard of an event that counts your till. Never! They may want a daily sales figure  on food sold at multiple day events but you always get 1st count (only count) of your own till. But that said they get a pretty good idea of what your sales should be by what other vendors report and if your way off base on your reported sales you just don't get to comeback. I think it's pretty fair to say many vendors take off entry fees before reporting sales. I have never done that and just always figured that you knew the cost when you signed up for the event.
 
Jack

I used to know a guy named Dr Of BBQ, his name was Jack from Springfield Il, has a BBQ business.......Do you happen to know him ???? he's a real stroke...............

I am glad you are posting again, Jack.  You have been missed.

Birddog,
 
Have you worked in the restaurant or food industry? Any experience? The last thing I would recommend you doing is jumping into a festival atmosphere, as it sounds like you are thinking that you will make a killing with the numbers you are already throwing out. If it only were true, some get lucky, but that is normally the exception, not the rule. Those are the stories that you will never read in print.
 
Myself, I'm only on my second year in my little trailer and have yet to have to pay one dime of rent (knock on wood). I have a nice customer base built up and a good product so I am told. I sell two items, hot dogs and cheese steaks along with soda and chips out of a 6x10 enclosed trailer.
 
I get requests to do this and that but so far have refused all offers. First off, I do not have the ability to put out high volumes of food for even small festivals or events. But what I do have is a steady customer base and more than a few regulars. And this is where I have to agree with Jack's last post regarding regular customers, as he is spot on. Which leads me to my next question...
 
What exactly are you planning to do? Just events? Or setting up locally and building a customer base? And your menu, what are you planning to sell?
 
Myself, I like being steady eddy at my little spot, let them come to my rent free spot next door to the mall...
 
Mike

Mike
I have been in the food industry since I was 12 and lied about my age to get my first waitress job 35+ years ago, so yes I have some experience.  I think I need to explain a bit about my situation as it is probably somewhat unique. I live and work on an offshore island in the northeast where I operate a 4 room inn/14 seat restaurant that I started 7 years ago in a leased 110 year old house. I have also catered some large weddings and events. Every single thing from toilet paper to guests has to be imported from the mainland so my organizational skills are stellar.
I work seasonally, always have. It is just the way it is on an island, the streets roll up after Columbus Day. So I work my butt off  June -September, in the kitchen 5 am to 9-10 pm, seven days a week and then close it down for the winter.  In December I head to the southwest where I stay till mid April, when I go back and start opening the place up again.
So here’s the thing. There is this particular festival that is very close to where I winter that I have gone to for the past 3 years. It runs for 8 consecutive weekends including a long weekend and a couple special student days(which I am sure would not be money days for me) for a total of 19 festival days. This is an established event(22 year run) that draws the numbers, I’ve seen them.  The promoters claim 250K for the entire event, of which I knocked 50K off and started crunching numbers from there, ultimately boiling it down to MAYBE get the chance to serve 300 peeps per day.  I want to offer a menu that no one here is offering. I want to do what I do best which is seafood. I just want to focus on a very few menu items that can be put together quickly. Lobster rolls, crabmeat rolls, an item of my own creation called a shrimp puff with a dipping sauce, and a couple of little sweet concoctions and a home made drink. That’s it. I know the logistics of getting product from the Northeast to the Southwest are tricky but I think I can pull that off, the even trickier thing is: Are people willing to pay extra to have something special that they would not eat every day. Which by the way, is why I have focused my attention on festivals and special events. I am wanting to supplement my seasonal work efforts with some off season work that will ultimately let me shift my work schedule to the concession biz in Southwest and allow me to have my summers off. I know that I am not going to make killer $$$ my first and probably my second and third seasons of doing this but hope to be able to worm my way into some good events that will get me started building a reputation and customers returning each year.  I might not have a snowball’s chance in hell of getting into this event but hey, ya never know if ya don’t try.

Soooo, being a greenhorn in the concession event world my original post regarding festivals and the percentages was just to find out if promoters want to see your menu numbers before you add on the percentage. The reason I asked this was because the event I am interested in does not tell you any percentage it charges on an app but wants you to send them a business proposal. I only know that they do charge one because I went to the office the last time I was at the festival and asked about applying. The office said that they do charge a percentage but didn’t know what it was.  So I felt confused about how I’d write a proposal with realistic prices without knowing the percentage.
 Also, most of the food is event owned with very few outside vendors and is in my opinion reasonably priced. I paid 5 bucks for a large piece of fried fish and french fries and wondered how my prices, which would be significantly higher would be viewed. I might mention that this is not the only festival that I am interested in but it is by far the biggest and longest running.
I do appreciate all the great responses I have received and couldn’t agree more with all regarding a loyal client base. They are the ones who come back to my inn year after year and bring their friends!

Since you are talking about the Phoenix area, I would think you might have a better than average chance of selling your premium priced seafood, since this area does have a generally good economy. 
 
As far as how well you can do, I think a lot might have to do with the type of crowd that is attracted to the particular festival you are considering.  In other words, is it an older crowd (generally used to the finer things in life) as opposed to a younger crowd (more used to fast food burgers, tacos, corn dogs, etc.)?  If the crowd is an equal mix of both older and younger, you might want to add a seafood taco (or something similar) to your proposed menu, just so as to have something that the younger people might find more familiar.  The first year you do the festival will probably be mainly a guess, but if you have the right crowd, you could have a winner!

For our events, I typically go .5 to 1% of total head count for a customer count. Granted it can vary on your product offering (and price), but this range has proven me right just about every time. There's alot of large events, and inventory/prep I do are based on my calculations.
 

6star-I think you just hit the nail on the head. The type of crowd is surely going to come into play. I will most definitely take that into consideration when researching events. I loved your suggestion to incorporate a familiar menu item for younger attendees, I will chew on that for a while as well.
 
UncleVic-You gave me one of the bits of information I have been searching for, Thank You! I will for sure use your tried and true method for my calculations.