I have a background in competing in local, national and international levels in chocolate competitions. I am the owner/chocolatier of a small artisan chocolate business and looking at the structuring you've laid out, the costs are prohibitive for a small, local event. Our small, local events have no booth fees associated with them, unless you need extra space, and then it's only $40. We agree to provide samples for the tickets sold and presented, and we are allowed to sell our product at the event. This is somewhere near 400-600 samples and 500+ attendance. The international events, all of our samples are purchased by the promoter. Some national/international events we participate in are 5-10k attendance. A portion of the public ticket sales, goes to pay for the samples, appearance fees and other associated expenses(venue, permits, insurance, staffing, marketing, etc). We are paid appearance fees to participate in events on this national scale, in large media/population markets(San Francisco, Los Angeles, Seattle, etc).
A lot really depends on what you consider local? Los Angeles, CA(millions) or Oakdale, CA(few thousand)? There's a world of difference in the scale of local bragging rights between the two. It's hard to put a price on local bragging rights in a small community. For us, in a community like San Francisco, where there is 90-100 local artisan chocolatiers, it can give you a noticeable marketing advantage over the competition. In a small community like Santa Cruz, CA, where there are less than 10, not so much.
Have you considered media coverage? Local or national? PR notices to major media outlets or a local TV/radio/newspaper crew(s)?
In the structure you outlined, what you are asking of the teams, is to donate time, experience, food, bbq supplies and booth fees, with only the chance to sell drinks to offset costs. Depending on the approximate attendance, the total to participate could run into the $1000's rather quickly. I see where you have considered selling tickets for food, have you also considered giving back a percentage of the tickets sales to the teams? This would make the biggest difference in offsetting some of the cost of teams to participate.
More items to consider...
How many sandwiches/meals are each team expected to serve? What portion size? Sample or meal sized?
just my $0.02