Running a restaurant business involves so much work. From managing shifts and hiring chefs to ordering inventory and tracking sales data, foodservice business owners have a lot to juggle. It’s no wonder many restaurateurs choose to work in a restaurant partnership instead of going it alone.
There are many reasons to enter into a restaurant partnership; it can be a profitable and productive way to keep your business operations running smoothly. However, finding the right partner for your business and maintaining a professional relationship with someone new isn’t always easy. Check out our restaurant partnership tips, and learn what you need to know about starting your own partnership.
A restaurant partnership is a business partnership between those working in the restaurant industry. There are a few types of partnerships that can work well within the hospitality space. Here’s a quick run-down.
A typical business partnership is one where two people work together in all aspects of the restaurant business. They’ll share decision-making duties and responsibilities, and both parties supply finances for the company. Partnerships like this also involve profit sharing — meaning each restaurant partner will get a cut of the profits, but they’re also responsible for any losses the business may incur.
In contrast, a silent partner takes on a more limited role. They provide capital for the business, but that’s usually where their input ends. They can act in an advisory role if agreed in the partnership contract, but they aren’t involved in business management.
Another type of restaurant partnership is a franchise system. Franchising is where a larger company (the franchisor) sells the use of its branding and strategy to another party (the franchisee), who then opens a restaurant using that system. The business model can vary from restaurant to restaurant, but the financial obligation is usually entirely on the franchisee.
Restaurant partnerships can help all types of businesses, from small businesses working in the local community to large restaurant brands working on a global scale. There are various reasons why a restaurant owner might want to enter a business partnership. Let’s take a look at some of those benefits now.
Opening a new restaurant or running an existing foodservice business is expensive. A restaurant partnership helps spread your costs, as more people will contribute capital to the business.
If there’s only one general manager in a restaurant, they will have a lot on their plate. A restaurant partnership means you’ll have a restaurant management team instead of one individual, reducing the workload by sharing it between each business partner.
You’ll also be able to share the responsibility if something goes wrong. If all decisions are joint decisions, there’s no one person to blame for mistakes made or losses incurred.
A successful restaurant partnership can lead to more creative ideas coming into the business, as you’ll have input from more than one person. Having someone to bounce ideas around with can be valuable. Group brainstorming sessions can often spark more innovation than an individual working alone.
Choosing the right partner for your small business can be challenging. A bad partnership could cause more problems than it solves, particularly if you find you’re unable to agree on business decisions. Here are five helpful tips for a successful restaurant partnership.
If you’re hoping to find a potential partner for your restaurant business but don’t have any friends or acquaintances who can invest the time or money, don’t worry. It could actually be a better idea to avoid working with friends or family. You’ll have to make difficult decisions as business partners, and it may cause conflict in your personal life if you enter a partnership with someone you love.
Instead, try looking on LinkedIn or other networking sites. Post about your requirements using keywords that people can find when searching. You could also join networking groups for business people in your local area to see if anyone is interested.
When discussing your business with a potential partner, it’s essential to consider the type of restaurant you run (or want to run) and what you need the most help with.
A silent partner might be a good idea if you’re just interested in improving your profit margins. They’ll provide investment but take a back seat in business operations. If you want help with your restaurant operations, a more hands-on restaurant partnership would be more beneficial.
Think about what you want from the partnership, and ensure you’re both on the same page.
Before signing a restaurant partnership agreement, it’s important to remember that you’ll be sharing your profits with another party. A silent partner might require a smaller percentage of your earnings since they won’t contribute to your restaurant operations. They’re like an investor rather than an active business partner.
If you opt for a 50/50 partnership, all profits will be split down the middle, meaning your monthly or annual take-home will be significantly reduced. However, you’ll also split any losses 50/50, which can be a massive benefit in the early stages of a restaurant business.
It’s estimated that up to 80% of restaurants close within their first five years. If you have someone to share the lows as well as the highs, you might have a higher chance of weathering the storm.
Before committing to a restaurant partnership with a person or small business, ensure you’re all committed to the same ideas and have the same vision for your business. If one partner wants to take it slow, work as a local business, and keep things simple, but the other wants to go full steam ahead and start an international company, you’re sure to head into trouble down the line.
If you can’t agree on the small things in the early stages, it’s unlikely your business partnership will list.
Start by drafting a rough restaurant business plan together to see how your values align, and take it from there.
When entering into a partnership, it’s essential that a lawyer draws up a detailed partnership agreement or contract for each business partner to sign. The contract should detail the specifics of who is responsible for what, who’s paying for what, and how the profits are to be split. The agreement should also specify what to do if one party wants to leave the partnership.
Set out your responsibilities and duties carefully, and ensure everyone knows what they’re getting into.
Restaurant partnerships can be a fantastic way to split the costs and responsibilities of running a restaurant. The right partner can ease the burden of day-to-day operations and ensure you’re heading for a more profitable business.
If you and your partner are in the planning stages of your new restaurant, consider adding self-service kiosks to your operations. KioskBuddy lets you turn a tablet into an easy-to-use self-service device, leaving your staffers free to focus on cooking delicious food and providing excellent customer service.
Sign up for KioskBuddy today, and see how it can simplify your restaurant operations.