Partnership Considerations for Restaurant Owners
Entering into a business partnership is similar to entering into a marriage. While no two partnerships are identical, there are several standard considerations that can be addressed here. Once all issues are discussed and resolved, the partnership agreement must be reduced into writing. Each partner should consult with an attorney to ensure that the written agreement is clear and unambiguous. 1. Do you and your partner(s) share similar ideals, goals and objectives? 2. Do you and your partner(s) share a similar creative vision for the restaurant? 3. How does your partner(s) handle disagreements? 4. How has your partner(s) handled prior business and personal relationships? 5. How ambitious and dedicated is your partner(s)? 6. Is one partner more committed than the other(s) to the development of your restaurant concept? 7. How many partners will there be? 8. How will tasks be assigned and whose ultimate responsibility will it be to see that each task is completed? 9. Who makes the final decisions and on what issues? 10. Will there be a hierarchy in the partnership? 11. What will each partner commit to the partnership (i.e. time, month or both)? 12. Will the partnership be an equal percentage partnership? 13. Will all partners have an equity stake in the partnership? 14. How will profits be calculated? 15. How will profits be divided? 16. How often will profits be divided? 17. Will the partners receive salaries and if so, will salaries be paid while the restaurant is in the building process? 18. Do you want a provision in the partnership agreement that terminates or abates the partners' salaries if profits dip? 19. When disagreements arise, how will they be handled? 20. Who will be designated as being authorized to accept employee complaints, and will there be more than one person who can accept employee complaints? 21. Who will have the ultimate decision making authority on employee complaints? 22. Will each partner be required to 'buy into' the partnership? 23. What will the ongoing financial responsibilities of the partners be to the partnership? 24. Will bonuses be issued and if so, how often and by what measure? 25. What expenses will the partnership cover for the partners? 26. Will the partners have titles and if so, how will the titles be assigned? 27. Will all partners have access to all partnership documents including financial statements and records? 28. What is expected of each partner with respect to the advertising and marketing of your restaurant? 29. What are the hours each partner is expected to work? Do all partners possess the same work ethic? 30. Will the partnership agreement contain a buy-sell provision to protect the partnership in the event of a partnership breakdown or the bankruptcy, death or divorce of one of the partners? 31. What happens if a partner becomes disabled and is no longer able to contribute to the partnership? 32. Will the partnership agreement be flexible so that rewards and control fluctuate with the contribution and assumption of risk of the respective partners?