Caterers and deposits

[jeromedawg]

Hey guys,

I'm currently talking to a small time caters (taco cart guy) for our sons first bday party and he's asking for a $100 non-refundable deposit at the time of booking. My paranoid mom is thinking he might take the money and run. I would think that's not the case but is there any sort of recourse or anybsteps we could take to prevent this from potentially happening? I don't think there's any official contract or anything like that either. we haven't agreed on anything. Just scoping things out but he seems to have the best price while being insured and able to obtain a license to do business in our city.

[Khaetra]

Writing.  Get everything in writing and make sure he has his city license before handing over the deposit.  If taco guy doesn't want to do that, walk away quickly.  I always made sure I showed my license and insurance up-front to potential customers so they would know I was legit and not some fly-by-nighter who would take the money and run, which sadly happens often in this kind of business.

[Freedomin5]

Can you write a post-dated cheque? That way he technically can't cash it in until the day of the party, and if anything happens you can ask the bank to stop/cancel the cheque.

[Metric Mouse]

It's only a $100. Remember how to get rich: http://www.mrmoneymustache.com/2012/06/11/get-rich-with-trust/

[thd7t]

What is the total cost for catering this? It seems exorbitant.

[jeromedawg]

What is the total cost for catering this? It seems exorbitant.

Total cost of everything is $585 for 100 guests (+$25 for a certificate of insurance and then whatever tip amount we want to give at the end). Though we're hoping less than 100 show up because the place we rented has a max cap of 90, technically. My parents are sort of insisting on this being a full-blown party, and have told us they want to help pay for the food (or pay for all of it). Cost includes roughly 4-5 tacos per person (asada, pollo and carnitas), hot dogs & quesadillas for the kids, a 5gal thing of agua frescas, condiments and plates/forks/napkins. Comes out to roughly $6-7 per head after factoring in tip.

[jeromedawg]

Can you write a post-dated cheque? That way he technically can't cash it in until the day of the party, and if anything happens you can ask the bank to stop/cancel the cheque.

Not sure how well that would fly. Can you even do that with most caterers or contractors who require deposits, in general? Usually they need it as collateral but post-dating it effectively takes the collateral away and makes it no different than giving them a check on whatever date it is that you post-dated.

[Fishindude]

When I don't get a written contract from a supplier that concerns me, I write my own letter documenting exactly what is agreed to, plus run a photo copy of the down payment check.  These little guys need a deposit to buy the supplies for your gig, they operate day by day.  If you don't trust them, don't hire them regardless of terms.

[jeromedawg]

Writing.  Get everything in writing and make sure he has his city license before handing over the deposit.  If taco guy doesn't want to do that, walk away quickly.  I always made sure I showed my license and insurance up-front to potential customers so they would know I was legit and not some fly-by-nighter who would take the money and run, which sadly happens often in this kind of business.

This sounds prudent. When you say "get everything in writing" are you basically saying he should have a contract ready that we would sign? Or just an outline of everything he is committing to include, no signatures necessary?

On the business license application, which is available online, I noticed this:
"EMPLOYERS MUST HAVE WORKERS' COMPENSATION INSURANCE
I understand that under California law, I am required to carry workers' compensation insurance for my employees at all times.

I further understand that my failure to have the appropriate coverage will subject me to civil penalties of $10,000 per employee who is not covered by workers' compensation and criminal penalties of up to one (1) year in jail and/or a fine of up to $10,000.

I know that even if I don't have employees right now, I will be required to get workers' compensation coverage as soon as I have one or more employees."

I'm not sure if that's the same as insurance for liability (in case of damages, etc) but it seems that workers' comp insurance is mandatory if he wants a business license.

[kimmarg]

A deposit for catering seems completely legit. That said WHY DO YOU HAVE A CATERER for a 1 year old birthday?  Buy a mini cake to smash, big cake to eat, end of story.

[jeromedawg]

A deposit for catering seems completely legit. That said WHY DO YOU HAVE A CATERER for a 1 year old birthday?  Buy a mini cake to smash, big cake to eat, end of story.

Talk to my parents... actually both sets of parents. They're the ones who want all this (and are supposedly going to pay for most of it) and who want it to be a big party. If we had it our way, it would be pretty small. But grandparents will be grandparents.

That said, taco cart guys tend to be on the cheaper end of the spectrum as far as "catering" is concerned - it's not like we're hiring some high-end caterer and serving prime rib and chicken cordon bleu. A lot of this is also being done out of greater convenience with regard to not having to run around to the grocery store and buy all the supplies, etc, then picking up the food and dealing with all the setup before and cleanup after.

[Khaetra]

What I mean by getting it in writing is the price/services agreed to and the date.  That way there's no surprises when all is said and done.

[Iron Mike Sharpe]

A deposit for catering seems completely legit. That said WHY DO YOU HAVE A CATERER for a 1 year old birthday?  Buy a mini cake to smash, big cake to eat, end of story.

And enjoy a complementary face punch.

[AlwaysLearningToSave]

I agree with the other posters who suggested getting everything in writing.  But even if you get everything in writing and verify that the guy has a business license, recognize that if the guy takes the money and runs (or just goes out of business), you are probably SOL.  It is a small enough amount of money that it won't be worth your time and energy to try to pursue it.  Just write the deposit check knowing it is a sunk cost and hope the guy shows up to cater. 

[Metric Mouse]

That said, taco cart guys tend to be on the cheaper end of the spectrum as far as "catering" is concerned - it's not like we're hiring some high-end caterer and serving prime rib and chicken cordon bleu. A lot of this is also being done out of greater convenience with regard to not having to run around to the grocery store and buy all the supplies, etc, then picking up the food and dealing with all the setup before and cleanup after.

And enjoy a complementary face punch.

Yes, this is starting to turn into face-punch territory...