Three is the magic number for food industry

From humble beginnings, the Catering Alliance has grown and grown.

Recently the BBC has been running trailer for its new digital TV station, BBC3, using De La Soul's song Three Is The Magic Number Catering Alliance should adopt it as its theme tune.

The company, which has just celebrated its seventh birthday by delivering another year of 25 per cent growth and a second successive strong showing in the Deloitte & Touche/Indy 100, is unusual in that it is run by three partners, each with equal shares and equal say in how the company is run. "Two out of three of us could have a majority if it comes down to a vote," says Russell Scandrett, the operations director. "But we always seem to come to an agreement."

Catering Alliance is a company that does exactly what it says on the tin. It's an alliance of three people and it specialises in catering, specifically running staff restaurants for corporations and educational establishments. From a standing start seven years ago, Catering Alliance now operates 230 restaurants for 187 clients – including Independent Newspapers, publisher of The Independent on Sunday. The group employs over 2,000 people and had a turnover last year of £30.1m. All of this without any concerted marketing campaign. "We don't like to let the rivals know we're coming," jokes Sean Hagan, the partner in charge of sales.

This is a long way from the company's extremely modest beginnings in a rented flat in the small market town of Atherstone in Warwickshire.

Scandrett had worked with Hagan at a catering group called Caterskill. That company merged with a rival caterer, Eurest, where the third member of the team, Michael Stott, was finance director. Then Eurest was sold to Compass Group.

"We were all offered jobs at Compass but we were tired of being bought and sold," remembers Stott.

The three "cobbled together" £30,000 to launch the company, and were initially based out of a flat Stott had rented. Their office was a laptop computer perched on a plastic garden table, which Hagan rescued from his shed. "We took turns to use the computer," he remembers.

The first year was tough. The partners paid themselves nothing and when the company made a £4,000 profit at the end of the year they fell on it hungrily.

However, they soon started picking up contracts, often winning clients unhappy with the service from the big catering giants that dominate the market, Compass and Sodexho.

"We offer a well-priced bespoke service," says Hagan. "The client might have been ripped off in the past and is seeking a happy medium of a value-for-money service that delivers something extra for their staff. We can beat our bigger rivals hands down."

The trio believe in a very tight, flat, management structure. The company does not really have a head office, using the regional office in Nuneaton for head office functions. There are five other regional offices, with a sixth planned in Scotland. The regional managers report to the directors – the three founders and five others, most promoted through the ranks. Catering managers report to the regional managers and staff report to the catering manager.

Training is important – the group obtained Investors in People status four years ago – and managers are offered share options. Scandrett says that keeping good people is crucial to the company's success. "We have a turnover of team members of about 10 to 12 per cent, which is low for the industry," he says.

With thousands of companies operating staff restaurants, Catering Alliance believes it can carry on growing without having to diversify. And there is no ambition to float or sell the company.

"We left our former employer to have greater control over our destiny," says Scott. "We're not about to give that up."