# Chef/Owner Partnership



## vietmeds (Apr 28, 2006)

Hi there,
 
I'm looking into opening a small restaurant with 2 other partners (1 will be the chef).  I was wondering if you all had any advice on how the profit shares/salary works.  My other partner won't be working in house, he's more our construction guy and investor.  I will be helping BOH, but mainly taking care of FOH and the books. The chef will do as a chef does (inventory, menu creation, day in/day in out in the kitchen, training new cooks).  The chef will probably put in more hours than me since he is the chef.
 
He can't live without a salary right now.  So I'm thinking of drawing up a contract where he gets a set salary, in addition to the profit share at the end of the year.  My other partner will have no salary and will only take profit share.  I'm thinking I'll take one for the team and just take profit share as well instead of adding a salary.  I really want us to succeed.  How would you go about doing this?
 

By the way, the restaurant is a quick-counter service restaurant, ideal for lunch.

Thanks in advance.


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## chefedb (Apr 3, 2010)

What ever arrangement you do is your business. One thing I would do is put it all in writing(contract) A partnership is like a marriage, when business is making money, all is fine and dandy, but if it does not, each one will blame the other and the possibility of divorce looms.

     This is when it really gets bad.. If you own it alone, there is only 1 person to blame. Keep in mind the success rate of a privately owned restaurant in U.S is about 12 %. This is one reason banks would rarely finance in good times, never mind now..

     If you make any profit in first year it also is rare, so whatever partner depends on this will see nothing. He in turn will be jealous of the other 2 who are drawing money out even though they are working in the place .I have been in many partnerships, and vowed after the third one to never do it again. In any event GOOD LUCK


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## vietmeds (Apr 28, 2006)

Thank you for getting back to me. I will certainly get everything in writing. Which is part of the reason why I'm here.

Yeah I've thought about the third partner not making anything in the first year.  I've known this guy for a while, and I believe that ultimately, he's okay with that.  That comes with the territory to becoming an entrepreneur.  I guess my biggest concern is how to, or how much, to contract a salary for the chef/partner.  We're all investing equally.  How much would you say a proper salary for a chef/partner is? I want to be able to bring a proper number to offer.

Thanks again.


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## chefedb (Apr 3, 2010)

There is no set in stone amount. Before this is computed, you must first know what your business will gross per week or month or year. What your estimated oh and food cost will be and what % you are working on. It is like going into a dark room and looking for a pack of matches.???? Many variables at work here. You may be a huge success or a total bust, it's really a crap-shoot even for experienced operators.. The economy we are facing now  has a lot to do with it.


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## gobblygook (Aug 26, 2010)

If everyone is putting in an equal share, then decide how much you would be willing to pay a third party to handle the job that each of the two "working" partners will be covering.  An "easy" example would be if you were going to be a server.  Servers (around here) usually make $2.13/hour plus tips.  If you're going to be a server, then that's what the business should pay you.  ALSO, it's very important that the "investment" and the "job" be separate.  If your chef/partner isn't cutting it as a chef, he has to be replaced. 

I think a lot of startup businesses fail because they have the wrong management -- often that management IS the owner.  The problem is that the owner is too "emotionally" (or financially) attached to the business to see the changes that need to be made, or to make those changes. 

I can only remember one episode of "Kitchen Nightmares" (out of 20 or so that I've seen) where the food wasn't at least a major problem.  However, the owners would refuse to admit that their food was sub-par. 

I'm dealing with such a situation now in a restaurant I'm trying to buy out.  The owner is aware he's losing money, but can't figure out exactly why.  He blames the economy, the clientele, the concept, pretty much everything but the food.  He told me what pride he takes in serving good food.  I ate there once, and the food was "okay".  It was completely unremarkable.  It wasn't horrible, but I also had no compelling reason to return.  His corn and green beans were reheated and appeared to be straight from the can.  His mashed potatoes were "instant".  While none of the food tasted "bad" (or too disgusting to eat), there was nothing to set him apart from any other inexpensive cafeteria.  His only positives were that he was close, it was quick, and it was reasonably priced.  So is every other restaurant in this town, so without a reason why people should return to THAT restaurant vs any number of competitors, he kept losing market share and money.  The bottom line, IMHO, is that his FOOD was the problem, but he blamed everything but the food.


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## panini (Jul 28, 2001)

Hi Vietmeds,

  I just wanted to jump in. I've been in businesses for many years. My suggestion, retain an attorney. It is important to

get everything in writing when starting a partnership. BUT!!! From my experiences, I feel that you must also spend the time on how

to dissolve the partnership.

   Just me: If you all have the money to fund this venture, then" keep your money" and use it to get financing for the progect. Small

business loans are readily available now. 2 page application. I could go on. You can always  reach me pm.

PS haven't met to many sucessful owners that tried to live out of the register when starting.


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## rahul vaishnav (Jan 22, 2017)

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i m become chef or need partner to open a pizza resort


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## chefdwilliams (Jan 15, 2017)

How you decide % is up to the 3 of you.. however.. If they are not working in the place and you are, Who has final say on things? is the 3rd guy a silent partners? is everyone equal?

There are very serious things to think about. I was a chef owner of 3 restaurants for a little over 20 years. My first place I had a partner. He was front of house, I was back. We discussed everything and usually came to agreements, However, when I opened my first place, it was may partners 3rd place and we agreed that he has 51% and I had 49%. I agreed because he had more experience then I did at the time. It was not for money, it was only operational issues. Money was always 50-50. He never did override anything, but its good to have everything clean and clear in a partnership agreement. 

I promise you, that partnership agreement will be very important as the stress level of the restaurant goes up.

I was lucky with my partner. We opened 2 places together but then split. He kept 1 and I kept the other. I opened a 2nd place alone. I loved it. All my decisions. Was very liberating. What I thought was best is what I did. No issues. 

Make a detailed partnership agreement with a lawyer. It will save you in the long run. TRUST ME


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