How to set a private dining minimum spend

A food and beverage (F&B) minimum is the least a group agrees to spend on food and drink for a private room or a buyout. If they spend less, they pay the difference, often as a room fee. It protects you: the seats you close to the public still earn their keep.

Write down what counts toward it. Many restaurants leave out tax, gratuity or service charge, and room or AV fees, but the main thing is that the contract says so clearly.

Start with what you give up by closing the room, then add the extras.

The idea is the same as revenue per seat hour: each seat has a value for each hour you are open. See the break-even and RevPASH guide.

An example restaurant has a 24-seat private room and a group that wants it for 3 hours on a weekday evening.

Many restaurants then offer packages around that figure, for example a lighter menu just under the per-head minimum, a standard one above it, and a premium one with drinks included. Ask for a deposit, often half the minimum, to hold the date.

The sales you give up are much higher on a Saturday in December than on a Tuesday in January, so one minimum all year is either too high to book on quiet nights or too low on busy ones. Run the numbers for each kind of night with the occupancy you really see then, and keep a small table of minimums by day and month.

Quiet nights can take a lower minimum and still beat an empty room, as long as the minimum covers the event staffing and setup.

• The minimum, and exactly what counts toward it (food, drink, tax, gratuity or service charge, room fees).
• The deposit, when the balance is due, and the cancellation terms.
• The final guest count deadline, and what happens if fewer guests come.
• Start and end times, and whether setup time is included.
• Menu choices, dietary needs and allergies to confirm with the kitchen before the day.

How service charges and gratuities are taxed and paid out has its own rules. Check with your accountant before you set them.