- By fontaine@antadis.com
- In
Restaurant Joint Venture Agreement
Regulating these terms is an important part of the process, but they make no sense if they cannot be executed. In order to protect your interest in the restaurant, the agreement should also clarify how the remaining partners finance a buyout. Ideally, established capital or loans are available for this. If one or more partners die or become unable to work, the situation becomes even more complex. Because of the trademark license, the restaurateur probably unknowingly assigned a franchise to the joint venture. It does not matter whether the restaurateur did not intend to start a franchise, was not familiar with franchise laws, or never used the « F » word in conversations with joint venture partners. By forming a relationship that qualifies as a franchise, the restaurateur has violated federal franchise sales laws and, depending on where the business operates, may also have violated the state`s franchise sales laws. Without a specific agreement, each restaurant partner can be personally liable for the company`s debt in case things get sour. A partnership agreement should determine everyone`s share in the company, both in terms of profit sharing and loss assessment.
In a limited partnership, for example, someone may bring capital into the restaurant and obtain it, but expressly not assume a management role and assume no responsibility for debts beyond that initial investment. Restaurant owners are mistaken if they assume that the business cannot be a franchise by investing in the joint venture. Unless the other participants in the project are truly passive investors who have no say in day-to-day management and who have limited voting rights in exceptional events such as the addition of new members, major financing transactions or the sale of the restaurant, the business can be a franchise, whether the restaurateur is a minority or majority investor in a joint venture. If the other participants in the risk are truly passive, the restaurateur may have violated federal and state safety laws, with equally serious implications. What if the restaurateur sold a franchise? Violations of the Law of Law Act are subject to significant penalties, even if the involuntary franchisor knew nothing about the law laws on the right to vote and did not intend to violate them. Not only is selling a franchise without complying with a franchise sale law a crime, but federal and state franchise agencies can also freeze assets, order refunds, issue injunctions, prohibit violations of the sale of franchises, and claim significant penalties. Franchisees have private remedies for violations of the state`s franchise law, which entitles them to damages, attorneys` fees, and termination. And if all of this doesn`t catch the attention of a restaurant owner, federal and state franchise laws impose personal, joint, and multiple liability on a franchisor`s management and key owners, even if the owner of the concept is a business unit. The participants in the joint venture move forward together as a new legal entity. It does not matter whether they choose to form a corporation, LLC or partnership: what is relevant is that the joint venture entity is distinct and distinct from the legal entity through which the restaurateur owns the flagship restaurant. In the usual scenario, the restaurateur retains ownership of the brands, brand characteristics and trade secrets that make the restaurant concept special, confident that the joint venture will replicate the restaurant concept and use its brand name in a way that adheres to the high operating standards that customers associate with the restaurateur. It is rare for a restaurateur to transfer the intellectual property to the new joint venture.
Therefore, the restaurateur will wear two hats in his relationship with the other participants in venture capital: co-owner of the new company and licensor of intellectual property. Even if the parties do not retain the trademark license in writing, the trademark license is implied in the joint venture agreement. Construction companies often enter into joint ventures to pool resources and pursue large projects. This joint venture agreement template can be completed in minutes and will help you and your partner enter into a legally binding joint venture agreement. Similarly, an agreement must describe in detail what happens when a partner resigns. Existing partners may have priority to purchase these shares. Also decide how the value of this partnership will be determined, as initial investments may increase or decrease in value over time. Use this free housing contract for your rental property.
It is professionally approved. These are just some of the things to consider when creating a partnership agreement. An experienced lawyer can be a great resource. In witness whereof, the Partners enter into this partnership agreement with a restaurant on the dates signed below. A partnership agreement should detail how new members can be admitted, as well as the process of leaving an existing partner. .