NAICS 722310 Quarterly Industry Report
Food Service Contractors
Comprehensive industry research for valuation professionals, business owners, buyers, and lenders
NAICS Code: 722310Sector: Accommodation and Food Services (72)Updated: Q1 2026
About This Report
This industry profile for Food Service Contractors (NAICS 722310) draws on data from the Bureau of Labor Statistics[6], U.S. Census Bureau[9], FDA food safety regulations[8], and SBA size standards database[7]. Published by Fair Market Value and updated quarterly, it provides valuation professionals, food service analysts, and business brokers with current market data. The editorial analysis reflects the independent assessment of FairMarketValue.com's research team, with all quantitative claims sourced to publicly verifiable databases.
Industry Snapshot
Key metrics for the food service contractors industry.
NAICS Sector
72
Accommodation and Food Services
Industry Definition & Overview
Food Service Contractors (NAICS 722310) encompasses establishments primarily engaged in providing food services at institutional, governmental, commercial, or industrial locations of others based on contractual arrangements per the U.S. Census Bureau[5]. These operators run cafeterias, restaurants, fast-food outlets, and food concessions at locations including schools, hospitals, office buildings, military installations, stadiums, and convention centers.
The Bureau of Labor Statistics[6] reports approximately 4,769 active businesses employing 703,129 workers, with an average weekly wage of $742.57. Food service contracting generates revenue through management fee arrangements, profit-and-loss contracts, and revenue-sharing agreements with host organizations. Large operators including Aramark, Compass Group, and Sodexo dominate the institutional segment, while smaller regional contractors serve local school districts, corporate campuses, and healthcare facilities.
Per the SBA Table of Size Standards[7], the size standard is $47 million in average annual receipts, the highest in the food services subsector. The FDA[8] and state health departments regulate food safety practices, with the Food Safety Modernization Act requiring risk-based preventive controls for food handling operations. Rising ingredient costs, labor expenses, and supply chain disruptions create ongoing margin pressure in an industry where profit margins typically remain narrow. Contract consolidation through mergers and acquisitions has been a consistent strategy among mid-market operators seeking to achieve scale economies.
What's Included in This Industry
- Institutional cafeteria management at schools, hospitals, and government facilities
- Corporate campus and office building food service operations
- Stadium, arena, and convention center food concession management
- Military dining facility and mess hall contract operations
- Airline and transportation food service catering preparation
- Menu planning, nutritional compliance, and dietary accommodation services
- Food procurement, inventory management, and supply chain coordination
- Staff hiring, training, and food safety certification management
- Equipment maintenance and kitchen facility management
- Revenue reporting, cost tracking, and contract compliance administration
NAICS Classification Hierarchy
| Level | Description | Code |
|---|---|---|
| Sector | Accommodation and Food Services | 72 |
| Subsector | Food Services and Drinking Places | 722 |
| Industry Group | Special Food Services | 7223 |
| NAICS Industry | Food Service Contractors | 72231 |
| National Industry | Food Service Contractors | 722310 |
Related NAICS Codes
| Code | Description | Relationship |
|---|---|---|
| 722320 | Caterers | Caterers provide event-based food service rather than ongoing contract operations, though many food service contractors also offer catering as a supplemental revenue stream |
| 722330 | Mobile Food Services | Mobile Food Services prepare and serve meals from vehicles and carts, representing a different distribution model than the fixed-location institutional kitchens operated by food service contractors |
| 722511 | Full-Service Restaurants | Full-Service Restaurants share food preparation and service operations but operate independently rather than under contractual arrangements at third-party locations and facilities |
| 722513 | Limited-Service Restaurants | Limited-Service Restaurants overlap with cafeteria-style food service contractor operations, particularly in corporate campuses where contractors run counter-service dining outlets |
| 311812 | Commercial Bakeries | Commercial Bakeries supply bread, pastry, and baked goods products to food service contractor operations at institutional and commercial locations under vendor supply agreements |
| 722410 | Drinking Places (Alcoholic Beverages) | Drinking Places serve alcoholic beverages at fixed locations, with some food service contractors also managing bar and beverage operations at stadiums, hotels, and convention facilities |
Geographic Concentration
Top states by share of national establishments.
| # | State | % Est. | Total Est. |
|---|---|---|---|
| 1 | California | 8.3% | 2,461 |
| 2 | New York | 7.3% | 2,167 |
| 3 | Texas | 7.0% | 2,048 |
| 4 | Pennsylvania | 6.1% | 1,799 |
| 5 | Illinois | 4.9% | 1,444 |
| 6 | Florida | 4.7% | 1,394 |
| 7 | New Jersey | 4.0% | 1,192 |
| 8 | Massachusetts | 3.8% | 1,117 |
| 9 | Michigan | 3.1% | 920 |
| 10 | North Carolina | 3.0% | 872 |
% Of Establishments
0%
8%
Source: County Business Patterns, U.S. Census Bureau[3]
SBA Lending Summary
720
Total SBA Loans
$219.8M
Total Loan Volume
$305K
Average Loan Size
11 yrs
Average Loan Term
10.57%
Average Interest Rate
6,392
Jobs Supported
Source: SBA 7(a) Program Data, U.S. Small Business Administration — FY 2025[4]
Key Insight: Per the SBA Table of Size Standards[7], Food Service Contractors (NAICS 722310) has a size standard of $47 million in average annual receipts for federal contracting purposes, the highest threshold in the food services subsector. SBA lending programs[10] support equipment acquisition, kitchen renovation, and working capital for qualifying regional and local contract food service operators. Eligible businesses can access SBA 7(a) loans[11] for working capital, equipment, and acquisition financing, while 504 loans[12] support major fixed-asset purchases including real estate and heavy machinery.
Top SBA Lenders
| # | Lender | Loans | Volume | Avg Loan |
|---|---|---|---|---|
| 1 | Readycap Lending, LLC | 80 | $49.5M | $619K |
| 2 | Northeast Bank | 192 | $24.9M | $130K |
| 3 | East West Bank | 8 | $14.4M | $1.8M |
| 4 | Harvest Small Business Finance, LLC | 16 | $12.0M | $751K |
| 5 | Beacon Community Bank | 8 | $10.9M | $1.4M |
Frequently Asked Questions
Common questions about this industry.
What types of businesses are classified under NAICS 722310?
NAICS 722310 covers establishments providing food services at institutional, governmental, commercial, or industrial locations of others based on contractual arrangements per the U.S. Census Bureau[5]. Examples include school cafeteria operators, hospital food service managers, airline caterers, and stadium concession contractors. The contractor provides management staff and food service operations at the client's location.
How large is the food service contracting industry?
The Bureau of Labor Statistics[6] reports approximately 4,769 active businesses employing 703,129 workers, with an average weekly wage of $742.57. Aramark, Compass Group, and Sodexo dominate the large institutional segment. Regional and local contractors serve school districts, corporate campuses, and smaller healthcare facilities where personal service relationships and local food sourcing provide competitive advantages.
What contract structures are used in food service management?
Three primary models govern food service contracts: management fee arrangements where the contractor receives a fixed fee plus expense reimbursement, profit-and-loss contracts where the contractor assumes financial risk in exchange for profit retention, and revenue-sharing arrangements that split financial outcomes between the contractor and host per industry practice. Contract length, renewal terms, and performance benchmarks vary by client type and market conditions.
What is the SBA size standard for food service contractors?
Per the SBA Table of Size Standards[7], the size standard is $47 million in average annual receipts, the highest in the food services subsector. This elevated threshold reflects the capital intensity and scale requirements of institutional food service operations. Regional contractors below this threshold qualify for SBA lending and federal contracting set-aside programs.
What food safety regulations apply to contract food service operations?
The FDA[8] regulates food safety for most packaged and prepared foods, while the USDA oversees meat, poultry, and egg products. State and local health departments conduct routine inspections and issue operating permits. The Food Safety Modernization Act requires risk-based preventive controls for food handling operations per FSIS compliance guidance[13]. Employee food handler certifications are required in most jurisdictions.
What are the profitability challenges in food service contracting?
Rising ingredient costs, labor expenses, and supply chain disruptions create ongoing margin pressure in an industry where profit margins typically remain narrow per BLS industry data[6]. Customer concentration risk is material, as losing a major contract can substantially affect revenue. Commodity price exposure for key inputs like proteins, dairy, and produce requires active supply chain management and contract pricing adjustments.
How are food service contractor businesses valued?
Valuations typically use discounted cash flow analysis based on contract values, renewal probabilities, and cost structures per industry transaction data. Customer concentration ratio, contract profitability by account, renewal rates, and management team stability rank among the most important valuation factors. Contractors with diverse blue-chip institutional customers, long-term contracts, and predictable revenue streams command premium multiples compared to those dependent on a small number of accounts.
What client retention risks should buyers evaluate?
Food service contracts can be sensitive to changes in operator, with some host organizations exercising renewal options or re-bidding contracts following an acquisition per industry practice. Assessing customer satisfaction levels, contract expiration dates, non-compete clauses, and key personnel relationships is critical during due diligence. Buyers who retain existing management staff and demonstrate service continuity to host organizations typically achieve better client retention through ownership transitions.
Sources & References
Government datasets and editorial sources used in this report.
- [1]U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages bls.gov
- [2]U.S. Census Bureau, Economic Census census.gov
- [3]U.S. Census Bureau, County Business Patterns census.gov
- [4]U.S. Small Business Administration, SBA 7(a) Loan Program Data data.sba.gov
- [5]U.S. Census Bureau census.gov
- [6]Bureau of Labor Statistics bls.gov
- [7]SBA Table of Size Standards sba.gov
- [8]FDA fda.gov
- [9]U.S. Census Bureau data.census.gov
- [10]SBA lending programs sba.gov
- [11]SBA 7(a) loans sba.gov
- [12]504 loans sba.gov
- [13]FSIS compliance guidance fsis.usda.gov
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