Restaurant Business Contract
Restaurant Business Contract
This Restaurant Business Contract (the "Agreement") is made and entered into as of [Effective Date], by and between [Name of Party 1], residing at [Address of Party 1] ("Owner"), and [Name of Party 2], residing at [Address of Party 2] ("Partner").
WHEREAS, Owner and Partner (collectively referred to as the "Parties") desire to establish a restaurant business (the "Restaurant") located at [Your Company Address];
WHEREAS, the Parties wish to set forth their respective rights, responsibilities, and obligations with respect to the operation and management of the Restaurant;
WHEREAS, the Parties recognize the need to define the terms of their business relationship to ensure the successful and profitable operation of the Restaurant;
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
I. Ownership and Structure
A. Ownership Details: Ownership of the Restaurant shall be divided as follows: Owner holds 60% and Partner holds 40%.
B. Business Structure: The Restaurant shall be operated as a Limited Liability Company (LLC) under the name [Your Company Name].
II. Responsibilities and Roles
A. Management Responsibilities: Owner shall be responsible for financial oversight, strategic planning, and ensuring compliance with legal and regulatory requirements.
B. Operational Duties: Partner shall be responsible for daily operations, staff management, menu planning, and maintaining customer service standards.
C. Decision-Making Authority: Decisions regarding routine operational matters shall be made by Partner, while strategic and financial decisions shall require the approval of both Parties.
III. Financial Contributions and Profit Distribution
A. Initial Investment: Owner shall contribute $100,000, and Partner shall contribute $50,000 to the initial capital of the Restaurant.
B. Profit Sharing: Profits shall be distributed on a monthly basis, with Owner receiving 60% and Partner receiving 40% of the net profits.
C. Loss Sharing: Losses shall be borne by the Parties in proportion to their ownership percentages, with Owner responsible for 60% and Partner responsible for 40% of any losses incurred.
D. Financial Reporting: The Restaurant shall maintain accurate financial records, and monthly financial reports shall be provided to both Parties within 15 days of the end of each month.
IV. Capital and Expenses
A. Capital Contributions: Any additional capital contributions required for the Restaurant shall be agreed upon by the Parties and contributed equally within 30 days of the agreement to contribute such additional capital.
B. Expense Management: All business expenses shall be managed according to a budget agreed upon by the Parties. Reimbursements for any business expenses incurred by either Party shall be processed within 15 days of submission of the appropriate documentation.
C. Budget Approval: An annual budget shall be prepared by Partner and reviewed and approved by both Parties by January 31st of each year.
V. Decision-Making and Voting
A. Routine Decisions: Routine operational decisions shall be made by Partner. These decisions include, but are not limited to, daily staffing, purchasing supplies, and managing customer relations.
B. Strategic Decisions: Strategic decisions, including changes in business strategy, significant financial expenditures exceeding $5,000, or any changes to the Restaurant’s structure, require the approval of both Parties.
C. Voting Rights: Each Party shall hold one vote. For routine decisions, a simple majority is required. For strategic decisions, unanimous consent is required.
VI. Term and Termination
A. Term of Agreement: This Agreement shall commence on the Effective Date and continue indefinitely until terminated as provided herein.
B. Voluntary Termination: Either Party may terminate this Agreement upon 60 days’ written notice to the other Party.
C. Involuntary Termination: This Agreement may be terminated immediately by either Party in the event of a material breach by the other Party, which is not cured within 30 days of receiving written notice of the breach.
D. Dissolution Procedures: Upon termination, the Parties shall liquidate the Restaurant’s assets, pay all outstanding liabilities, and distribute any remaining assets in accordance with their ownership percentages.
VII. Dispute Resolution
A. Mediation: Any disputes arising under this Agreement shall first be subject to mediation. The Parties agree to participate in at least one mediation session within 30 days of a dispute arising.
B. Arbitration: If mediation fails, the dispute shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association. The arbitration shall be conducted in [City, State], and the arbitrator’s decision shall be final and binding on the Parties.
C. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of [State].
VIII. Confidentiality and Non-Compete
A. Confidentiality: The Parties agree to keep all proprietary and confidential information related to the Restaurant strictly confidential. This includes recipes, financial data, customer lists, and any other sensitive business information. This obligation shall survive the termination of this Agreement.
B. Non-Compete: Neither Party shall engage in or establish a competing restaurant business within a radius of 10 miles from the Restaurant location for a period of 2 years following the termination of this Agreement. Violation of this clause shall result in the offending Party paying the non-offending Party damages equivalent to 50% of the offending Party’s initial investment.
IX. Insurance and Liability
A. Insurance Requirements: The Restaurant shall maintain comprehensive general liability insurance, property insurance, and workers’ compensation insurance as required by law. The insurance policies shall cover a minimum of $1,000,000 in general liability.
B. Liability Provisions: The Parties agree to indemnify and hold each other harmless from any claims, damages, or liabilities arising from the operation of the Restaurant, except in cases of gross negligence or willful misconduct by the indemnified Party.
X. Miscellaneous Provisions
A. Amendments: This Agreement may be amended only by a written document signed by both Parties. Any proposed amendments shall be discussed and agreed upon within 30 days of the proposal.
B. Notices: All notices required or permitted under this Agreement shall be in writing and delivered to the addresses specified above. Notices shall be deemed given when received by the other Party.
C. Entire Agreement: This Agreement constitutes the entire agreement between the Parties and supersedes all prior discussions, agreements, or understandings of any kind. Any oral representations or modifications are not binding unless reduced to writing and signed by both Parties.
Signatures
IN WITNESS WHEREOF, the Parties hereto have executed this Restaurant Business Contract as of the day and year first above written.
Owner
[Name]
[Date]
Partner
[Name]
[Date]
