Any food services business owner can verify that running a restaurant, bar, or catering operation involves a lot of moving parts. From partners and employees to suppliers and customers, most of your professional relationships revolve around giving and taking.
In the business world, these interactions can get messy if you don't spell out the specifics in writing. That's why contracts are essential to operating your business smoothly. Depending on how your business runs, you may need to use contracts for…
- Leased equipment. If you don't own your kitchen equipment, such as ovens, stoves, and refrigeration units, you likely depend on a lease or payment plan contracts.
- Suppliers. Food and alcohol purchases are the bread and butter of food services businesses. This means owners have to negotiate supplies, payment terms, and delivery dates in their contracts. There are other suppliers to consider, too. For example, you need a contract with a credit card processor to accept credit cards at your establishment – a complicated agreement that entails various rates, fees, and pricing models. You may also have a contract with a temp agency to keep your business adequately staffed, especially because the turnover rate for food services employees tends to be high.
- Cleaning services. You may contract with laundry services if your fine dining establishment uses tablecloths, linen napkins, chef coats, and uniforms.
- Leased commercial property. Unless you own your commercial property, you likely have a leasing agreement with your landlord.
- Marketing services. Though you may not outsource your marketing needs right away, chances are that when your food business grows, you'll need some help. When that happens, you may hire a marketing firm or contractor to help develop advertising and public relations materials. In turn, you'll need the appropriate contracts to define expectations, project milestones, and payments.
- Partnership and shareholder agreements. These contracts detail the obligations other business partners or shareholders have to the company and the conditions under which their shares can be bought or sold. Every food services business owner should draw these up to help navigate potentially sticky situations down the road.
Now that we've established some of the scenarios for which you'll need contracts, let's look at some helpful tips for creating your own contracts.