If the coronavirus pandemic has taught us anything, it’s that nothing is impossible, and we need to be ready for whatever the world throws at us. This is true in many aspects of our lives but is especially true when it comes to running businesses. The events industry has been hit hard with calls to reschedule, or worse, cancel events.
Of course, it’s in our blood as hospitality professionals to want to be hospitable to our clients, to provide them with goods and services, and to ensure that their events, some of which are once-in-a-lifetime celebrations, will be successful. This can make it difficult for us to remove ourselves from their shoes and bring us back to our own. There are times that while working in hospitality, we can feel like a doormat, and that it’s OK to just give up everything for someone else. It’s not. It’s never been more important to cover our own assets with so many events being canceled due to the pandemic and the possibility of future pandemics and business closures, and your venue’s private events contract is a great place to start.
Here are three tips on how to update your event contracts — you can easily make these changes to the contracts in the documents already saved in your Tripleseat dashboard. Check out this video from Tripleseat University for more information on creating and sharing documents:
Step One: Review your cancellation policy
First and foremost you must ensure your venue has a well-written cancellation policy. Within this cancellation policy, you should have a clear list of clauses, along with approved cancellation reasons. Even if you do not permit cancellation under any circumstances, it should still be written out in your contract regardless. Your cancellation policy should outline all terms in the event that if either party cancels, you might require a certain percentage of the total event due at the time of cancellation or even a flat cancellation fee. Making sure your cancellation policy is outlined in an easy-to-understand fashion is your first step to a solid contract.
Step Two: Update your force majeure clause
Next, you’ll need to add or update your force majeure. Force majeure is the contract clause on every event professional’s lips right now because it refers to what will happen if unforeseeable circumstances occur to either party and makes them unable to fulfill an event contract. It may seem like force majeure is a legal term literally built for situations like COVID-19. But, it’s important to note that the term isn’t specific to one legal definition and it generally means exactly what the contract says it does. So make sure you are clear as to what constitutes a force majeure at your venue. Keep in mind that in most cases a force majeure event must be all three of these things: unforeseeable, external, and impossible to overcome. It is your contract and your words. You are allowed to list out exactly what falls under the force majeure clause at your specific venue.
Step Three: Include a rebook clause
Lastly, your contract should contain a rebook clause. A rebook clause simply means that a certain percentage or full amount of the initial deposit or cancellation fee may be transferred to use towards a future event. This is especially important in situations like the one we’re in now. You want to make the idea of rescheduling an event look as appetizing as you can so that no money is lost on either end. Typically a rebook clause allows your client to reschedule their event within one year from the date of cancellation. I should also note that when writing out your rebook clause you’ll want to make clear the amount of time you’ll allow someone to cancel and make use of the fees. For example, someone who cancels an event scheduled for the next day should not be allowed to use any money towards a future event. Your venue would obviously lose money in this situation.
Revise your contracts now to save your venue money later
Every event professional and restaurant industry worker is dealing with uncertainty and has been heavily impacted by the coronavirus. It goes without saying that our health and wellbeing are of the utmost importance right now and, of course, should be protected first and foremost. But that doesn’t mean we can’t be smart about how we proceed and modify our event strategies and contracts given the current situation. Please keep in mind that I am not an attorney, and have no legal background. Every suggestion I’ve laid out for you is just that, a suggestion. I am simply a former event professional who has done a lot of research on honing an event contract. You should always seek the advice of a trained legal professional when writing or re-writing your venue’s contracts.
More resources for event professionals
As the restaurant industry is preparing to open in several states across the country, you may have questions about how to adapt event contracts and other practices to the phases outlined by state and federal regulations. Ask your questions and get advice from other industry professionals during this week’s Social Hour virtual roundtable on Thursday, May 7 at 3:30 pm. The topic is Reopening Updates & What’s Next, and you can register via Zoom.
If you’ve missed our past roundtables, you can access recordings of Social Hour online. Event professionals can also find more tips for the hospitality industry on our blog; by listening to our Two Chicks, Three Seats podcast; and by joining our Facebook group, Event Manager Community, to connect with peers and discuss the impact of the coronavirus on the events industry.