A restaurant partnership agreement example shields you from various complications in a partnership business.
Being a Resturanteur comes with its fair share of responsibilities. Having a sidekick to share such duties with could be the most strategic move. Your business will reap the benefits of better decisions.
Little wonder most people opt for partnerships in the restaurant business. If you are on the verge of partnering with someone, you need a restaurant partnership agreement to protect you from future challenges like misunderstandings.
Without further ado, we’ll help you draft the most protective partnership agreement for your restaurant.
What Is A Restaurant Partnership Agreement?
A food business partnership agreement is a contract detailing the terms of running a restaurant. It allocates the duties and responsibilities of the business owners in clear terms.
A partnership agreement analyzes the ownership and conditions of the relationship between business partners.
Drafting an agreement that satisfies all requirements could be a hard nut to crack.
But this guide will get you through the process.
How To Make A Binding Restaurant Partnership Agreement
A simple handshake between friends can “seal” a business deal. But sometimes, even the closest buddies need legal documents to guide a partnership arrangement.
Here are the core elements that make up a binding contract.
1. Company Information
The beginning of every well-drafted agreement contains the company information. At the most basic level, this means the name of your company or partnership and its purpose.
Moreover, you need to include the name of the parties involved in the partnership. If the partnership is for a fixed period, specify the time frame.
2. Liabilities And Contributions To The Partnership
Your partnership agreement should address details like the responsibilities of each party in the contract. This includes the ownership percentage of the partners. Who would need to contribute monetarily? Services? Or property?
Even details about the partners’ authority and the managerial duties they will take on.
Each person may contribute to the business in different capacities. So long as the details are included in the agreements, you can avoid strife.
3. Include Terms, Conditions, And Clauses
Sometimes, the ability to envisage situations and prepare ahead can save your business. Therefore, include clauses that address several circumstances.
For instance, a dispute clause could name a mediator that would aid in dispute settlement. And a dissolution clause may save you from confusion when it’s time to drop the partnership.
4. Buyout Option And New Partners Options
Partnerships aren’t constant– but changes are. That’s why your restaurant partnership agreement should make provisions for such changes. In cases where a partner wants out, a buyout option can save the business.
Besides, you may meet new potential partners. Include a section that addresses that possibility to make it easy to manage the situation when it arises.
5. Death Of A Partner
If there’s anything you can’t always predict, it’s death. But you can cushion your agreement to handle what happens afterward.
It could be a beneficial buyout scheme, a new partner, or a reliable family member taking over.
Restaurant Partnership Agreement Example
Here’s a template of a restaurant partnership agreement example.
This Restaurant Partnership Agreement (the “Agreement”) is made as of this [DATE]. Between [PARTY A] and [PARTY B] (collectively, the “Parties”).
Party A has extensive experience in the food service industry. Party B owns a prime location suitable for operating a quality establishment. It is mutually agreed that the Parties shall join forces to embark on a business venture together. The Parties agree to share in any profits the restaurant generates after expenses are paid.
The term of the Agreement will commence on [DATE]. It will continue until termination by either party upon written notice with at least 30 days warning. However, both parties may also agree to extend the Agreement. All obligations under this Agreement shall remain binding even if there has been an extension.
Party A agrees to provide initial startup capital to cover setup costs related to the restaurant. This may include the cost of furniture, fixtures, licenses, permits, equipment, and supplies necessary for its successful operation. Moreover, Party A shall be responsible for hiring employees and managing day-to-day operations at the restaurant.
In return, Party B will contribute capital towards additional overhead expenses. The expenses may cover:
- Rent or lease payments
- Insurance premiums associated with maintaining the premises.
This is in accordance with applicable laws and regulations.
Party B shall maintain exclusive control over major decisions regarding marketing activities like:
- Menu planning
- Employee policy implementation
- Long-term financial goals pertaining to the business venture.
Finally, each party hereby warrants and certifies that they possess all legal authority necessary to enter into this Agreement. And that any conflicting agreements or arrangements bind neither of them.
The Parties pledge to perform all obligations herein in good faith. And waive any rights arising from unanticipated losses caused due to misdeeds committed while carrying out their duties as defined in this document.
Signed: _________________[Party A]
Signed: _________________[Party B]
A restaurant partnership agreement ensures all parties understand their rights and responsibilities.
It’s important to consider all factors when negotiating an agreement. And craft a contract that reflects the intentions of both partners. While there are no hard-and-fast rules for drafting such agreements, utilizing experienced legal counsel can foster clarity and efficacy.
You can also take charge of your agreement with the help of INK AI Assistant.
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