December 31, 2024 • 17 mins
In this eye-opening episode, I share a crucial case study about business collaborations gone wrong. Through a real-world case study involving a Portland vegan restaurant and distillery partnership, I break down the essential components of successful business relationships and the devastating consequences of operating without proper legal protections.
You'll learn key takeaways about the importance of written contracts, financial transparency, and proper business structure. Whether you're a food truck owner, pop-up chef, or restaurant entrepreneur, you'll get valuable insights on protecting your creative vision and business interests. You'll learn why handshake deals can be dangerous, how to structure your collaborations properly, and what steps you need to take before entering any business partnership.
Topics you'll hear about:
- The power of successful collaborations
- Essential elements of business contracts
- Red flags in business partnerships
- Financial transparency requirements
- Protecting your business interests
- Working with lawyers and accountants
- Due diligence in partnerships
Reach out if you'd like to discuss your vegan food business, whether it is currently a dream or you're in the messy middle...drop me a note on Instagram: @savvyfrugalvegan
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Heather (00:00):
I'm Heather Zeitzwolfe Savvy Frugal Vegan, I'm here to
(00:03):
help chef-preneurs, just likeyou, start, build and maintain a
vegan food business..
If you want to have financialsuccess in the vegan mobile food
industry...
whether it's a cart food truck,or pop up, I'm here to help you
with business hacks, tips,tricks, and the pitfalls to
avoid.
Are you ready to map out yourbusiness journey, then put the
(00:25):
key and the ignition a nd let'sgo for a ride.
in this episode, we're going tobreak down why contracts should
be non-negotiable.
We're going to talk about theimportance of owning your
creative work.
And your business structure.
Now, when I say creative work,if you are a chef, this could
mean.
Your menus.
Your brand in the community.
(00:48):
I'm going to share this wildcase study.
About this vegan restaurant anddistillery that started with big
dreams.
And ended in, let's just saychaos.
All right.
Let's dive in.
Yesterday.
I saw a post on Instagram from alocal vegan restaurant.
in a dire situation.
(01:09):
Through their posts.
I discovered there's a lot ofstrange, questionable things.
Around the setup they have withthe company that owns the
distillery where the restaurantis located.
it really had me thinking about.
The importance of having awritten.
Contract.
That a lawyer.
And an accountant.
(01:30):
May weigh in on.
Before you start going intobusiness with somebody and.
Allowing them to take over andcall the shots.
I see partnerships go awry andthese are.
legally formed partnerships Evenwith those, oftentimes
partnerships will dissolve.
But if they've been set uplegally, then there's a way to
(01:54):
make sure everyone is.
Compensated correctly.
It can get very sketchy if youdon't have a written contract,
even with somebody that you'refriends with.
You still want to have a writtencontract?
You don't want to ruin afriendship over
misunderstandings around who wasexpected to do what.
(02:14):
what the goal or expectedoutcome might be.
So I thought this was aninteresting case study to
discuss.
I want to go through some ofgeneral ideas around
collaboration.
then specifically this veganrestaurant in Portland.
I have not looked at any oftheir contracts.
I only know been posted on theinternet, which is limited.
(02:38):
information from oneperspective, which is the vegan
restaurant and not thedistillery.
I don't wander throw them underthe bus, not knowing exactly.
their understanding of thesituation But.
It does seem there was.
I don't want to say shady.
there was definitely.
Some misunderstanding.
I don't know if it was fraud.
(02:59):
I think it was more like thedistillery got in a bad
financial situation and theyjust were not upfront about what
was going on.
But again, that's allspeculation because I really
don't know from theirperspective.
I'm not going to name them, butI have corresponded with the
vegan restaurant via Instagram.
I feel okay.
Discussing their point of view.
(03:20):
let me ask you, have you everthought.
Oh, I'll just partner withsomeone.
Handshake deal, nothing fancy.
It'll just work out.
spoiler alert.
It might not.
collaboration.
Is super powerful.
I encourage people tocollaborate all the time.
But when you start handing overthe reins of your business to
(03:42):
someone else, this is where itgets squirly.
if the terms aren't clear and inwriting.
Things can go sideways fast.
let's start off with the good,why is collaboration amazing?
when it's done, it Can be a gamechanger, especially for small
vegan food businesses.
here's why.
One.
(04:02):
Shared costs.
Renting a space, buying a bulkor sharing resources.
Collaboration can save you tonsof money.
Now, if you were to do this.
keep your businesses completelyseparate.
I decide who's going to be.
Paying the rent.
Can you both pay them rent tothe landlord when you buy in
bulk?
Can you divide up the payments?
(04:24):
when you share resources, areyou making sure they're.
equally shared.
how are you going to compensateeach other have things really
thought through.
And write them down.
besides shared cost, there'salso new opportunities.
Collaboration is great for newopportunities.
Teaming up with anotherbusiness, gets you in front of
their audience.
(04:44):
So maybe your vegan cupcakesbrings customers to their coffee
shop or their drinks drivetraffic to your pop-up.
think of ways that you cancollaborate with somebody and
get in front of their audience.
they're highlighted yourhighlighted.
It's a win-win.
Third one is community vibes.
(05:04):
Collaborating can buildconnections.
strengthen relationships and youcan grow as part of a larger
ecosystem.
if your business is built on thelocal community, This really
helps it strengthens therelationship you've got each
other's back.
When it works, it can workreally well.
But, When you skip the details.
(05:27):
things can fall apart.
Trust me even the bestintentions can lead to huge
problems without a solid plan inplace.
This is where you really need tohave a lawyer.
And if you can't afford tolawyer up.
There are free resources thathelp you get legal guidance.
You could even use chat GPT tohelp you with a legal document.
(05:49):
Make sure that you both readthrough it.
sign it but whenever you cantalk to a lawyer, We want to
make sure that it is a win-winfor both people that are
collaborating.
We don't want to allow forsomeone to take advantage of
you.
here's the thing.
contract doesn't mean you don'ttrust the other person.
It's the opposite.
It's about protecting both ofyou.
When everyone knows what'sexpected.
(06:11):
There's no confusion.
no awkward conversations andhopefully no drama.
The last thing you want.
It's two people arguing insideof a food truck.
Over.
Expenses.
Or money you.
Deposited into your personalaccount Let's avoid the drama
have a contract.
(06:32):
Here's what a good contractshould include.
who does what.
Spell out the roles andresponsibilities.
If you're the chef.
Are you also responsible for.
Getting the rent paid.
If you're handling marketing.
What does that actually looklike?
If you think it looks like youhanging out on a beach with a
(06:53):
updating Instagram.
Once a week that may not be whatyour partner is thinking.
Number two.
How will revenue and expenses besplit?
Who's paying for the ingredientsand equipment or the utilities.
What if you don't have enoughmoney in the business?
who out of pocket is going topay for this.
How will they be reimbursed?
(07:14):
Number Three.
What if it doesn't work out.
If someone wants out of thebusiness, what happens?
Do they sell their share of thebusiness?
Do they walk away?
Does it just dissolve?
Can they sell their.
Part of the partnership tosomebody else.
Now you're in business withsomebody that you don't even
know.
thinking ahead of differentscenarios will help you figure
(07:37):
out what needs to go into thiscontract.
Number for conflict resolution.
what happens when you don'tagree on something?
Trust me, it's going to happenat some point.
have a plan in place of howyou're going to come to a
resolution.
Are you going to take a vote?
the votes be.
Hidden.
What if there's only two of youhow are you going to agree on
(07:58):
this?
Does there need to be consensusbetween all the partners.
Will your employees be able toweigh in on this?
as your business changes overtime, say you start out with no
employees.
when you start adding employees,think about how that might
change some of the wording inthe contract.
go back and update it.
(08:18):
you can bring a lawyer in tohelp you adjust and update this.
Without clarity, you're leavingeverything up to interpretation.
And this is where people gethurt businesses.
Fail.
friendships.
can end and get ugly.
And nobody wants that.
So here's today's case study.
this is about when collaborationgoes.
(08:40):
Sideways.
the vegan business posting onInstagram There was a possible,
nondisclosure agreement.
I don't want to overstepanything or have to take this
down because I'm naming namesWe'll just say vegan restaurant
and distillery.
if you know who I'm talkingabout, that's fine.
Okay.
So this vegan restaurant theypartnered and I'm using air
(09:01):
quotes.
partnered with a distillery.
In Portland.
A partnership.
Is legally bound.
There are legal requirementswhen you have a partnership.
In the USA.
Partnerships have to file theirown tax returns.
when I'm saying they partnered,I don't think they actually are.
Partnering.
(09:21):
I think they collaborated let'scall it that.
So the restaurant operatedinside of the distillery.
when they agreed to do this, itseemed like a win-win
opportunity.
I think the thought was therestaurant would bring in people
to eat food then the distillerywould provide drinks and
together they would attractcustomers.
(09:43):
it was supposed to be a win-win.
But here's the problem.
There was no contract.
no ownership agreement, nowritten rules about money.
Roles or who handled what.
It was all just verbal.
And here's how it all wentwrong.
The restaurant didn't own itsoperations.
All of their finances, bankaccounts, payroll, everything.
(10:07):
Was controlled by thedistillery.
the head of operations for therestaurant.
Was not allowed to see the bankstatements.
Turns out.
Vendors weren't paid.
Employees were left footing thebills for certain supplies and
inventory.
And it looks as ifreimbursements were taxes,
payroll.
Which is super illegal.
(10:28):
Again, I'm getting this from.
Instagram.
The next piece of chaos was Thepeople in the restaurant were
employees of the distillery.
Even though it was considered aseparate restaurant.
Essentially.
The restaurant was funding thedistillery Then there were labor
violations.
Employees, weren't getting paidfor some of their shifts, PTO
(10:50):
and sick time were denied.
And tip pooling was.
So messy that staff didn't evenknow if they were getting the
tips they earned.
Then there seems to be some coolWorshan without ownership.
So when the restaurant stafftried to fix things, they were
told to form their own LLC.
Take over all the financialresponsibility and sign a lease
(11:14):
with just three days.
Notice.
And they had to sign anondisclosure agreement so they
could not talk about it or getlegal advice.
This is why this deal is sofundamentally flawed.
The employees are taking all therisk of ownership.
They're paying rent utilities,maintenance costs without
receiving any of the rewards,the equity, profit sharing, or
(11:35):
decision-making power.
This just seems.
Ludicrous by forcing employeesto form an LLC and assume
responsibility.
The distillery is absolvingitself of liability for its
mismanagement while retainingcontrol over licensing.
And other critical elements ofthe business.
And without access to financialrecords, the employees.
(11:58):
Which includes the head ofoperations.
Cannot assess the restaurant'sprofitability or determine
whether the lease terms are fairor viable.
The whole thing seems unfair.
And.
Riddled with.
problems.
I think if they consulted alawyer on this, I don't think
that these things would haveoccurred.
the way it was set up shouldhave been full of red flags.
(12:22):
Part of the root problem was thecollaboration between the
restaurant and the distillerylacked a written contract.
Without a contract.
There were no safeguards toensure financial transparency.
The restaurant has no legalcontrol over its own operations.
And the employees had noprotection against mismanagement
or unfair treatment.
(12:43):
This is like trying to.
Own a business without owningthe business.
You're just giving the reinsover to somebody else.
what can we learn from this?
One always have a contract,whether you're partnering on a
pop-up sharing a kitchen orrunning a joint venture.
Put everything in writing.
Even if you're working withfriends or family, The contract
(13:06):
is about protecting everyoneinvolved.
Two.
Prioritize transparency.
Make sure both parties haveaccess to financial records and
a clear understanding of howrevenue and expenses will be
handled.
Three understand your rights.
If you're not an owner.
Make sure the agreementexplicitly defines your role.
(13:29):
And ensures fair compensationfor your contributions.
Four.
Think longterm, a goodpartnership.
Doesn't just work in the shortterm.
It should be sustainable overtime.
If the restaurant and thedistillery had a clear written
agreement from the start.
They could have avoided a lot ofstress, confusion and financial
(13:50):
strain.
the restaurant.
could have avoided.
Being taken advantage of.
And again, I don't know theother side of this, but it
sounds like they were beingtaken advantage of.
why did this even happen?
The restaurant staff didn't ownthe business.
they were running the show, butdidn't have legal control or
equity in the operation.
The distillery held all thecards, banking, licensing,
(14:13):
payroll, and the restaurant wasstuck trying to clean up the
mess they didn't create.
This is why entity structurematters.
If You want to own the business?
Set up an LLC and S-corp orwhatever works for your type of
business, contact, an accountantor a lawyer but make sure you
have the rights Don't letsomebody else hold the reigns of
(14:35):
your creative vision.
It's your dream.
Don't let someone else ruin it.
Or.
run your brand into the ground.
it sounds like the distillerywas taking on the liability But
I don't know for sure if theyhave the credit cards in their
name.
Or the restaurant, which seemsvery bizarre to me because if
they're paying the payroll, itseems like they have to have the
(14:58):
credit cards.
And the distillery name.
I don't know.
It's very, weird If you're goingto start a business.
Do your homework.
if you haven't done yourhomework around legal and
financial planning, it's nevertoo late.
Get on it.
I know that contracts and legalstuff.
Aren't the fun part of running abusiness.
But they're absolutelyessential.
Before you enter into apartnership.
(15:19):
Here's what you do.
One.
Talk to a lawyer.
Get a professional to review anyagreements.
Especially leases or contracts.
And make sure that the terms arefair, clear, and protect your
interests.
And in this case protects youremployees.
Because.
In this case.
The employees of the restaurant,weren't really their employees.
(15:42):
They were the employees of thedistillery.
Two.
Work with an accountant.
I'm an accountant.
You need to have someone thatcan help you understand the
financial side.
whether it's revenue splits,taxes or ownership, equity.
You want somebody on your sidethat can guide you They'll make
sure that you're not walkinginto a deal that will sink your
(16:02):
business.
do your homework.
research, your partner.
Are they financially stable?
Have they run successfulbusinesses before?
Do they have a good reputation?
Have they paid their vendors.
Have you looked at theirfinancial statements.
If you don't know what you'relooking at.
Have an accountant look at theirfinancial statements.
You may even want to have thosefinancials audited.
(16:25):
To verify they are.
True and not tampered with.
And most importantly, take yourtime.
Don't let anyone rush you intosigning something you don't
understand.
A bad deal can take years torecover from.
If you recover at all.
Talk to a professional.
whenever you sign a businesscontract.
So what's the big takeawayshere?
(16:47):
collaboration is awesome, butonly when it's built on trust
transparency and a solidfoundation of clear written
agreements.
You can't just assume thatpeople are coming from the same
place that you are.
if you're a vegan foodentrepreneur, Or really any kind
of business owner.
Make sure you're protecting yourwork, your finances and your
(17:08):
dreams.
This is your passion, right?
You don't want someone squashingyour dreams.
Don't give someone else thepower to derail everything that
you've worked for.
Thanks for hanging out with metoday.
if you found this helpful, shareit with a friend, leave a
review, or reach out with yourown business questions.
Until next time, keep crushingit, keep creating.
(17:28):
And you, my friends are theheroes because.
Compassion starts on the plate.
I'm Heather Zeitzwolfe Savvy Frugal Vegan, I'm here to
(00:03):
help chef-preneurs, just likeyou, start, build and maintain a
vegan food business..
If you want to have financialsuccess in the vegan mobile food
industry...
whether it's a cart food truck,or pop up, I'm here to help you
with business hacks, tips,tricks, and the pitfalls to
avoid.
Are you ready to map out yourbusiness journey, then put the
(00:25):
key and the ignition a nd let'sgo for a ride.
in this episode, we're going tobreak down why contracts should
be non-negotiable.
We're going to talk about theimportance of owning your
creative work.
And your business structure.
Now, when I say creative work,if you are a chef, this could
mean.
Your menus.
Your brand in the community.
(00:48):
I'm going to share this wildcase study.
About this vegan restaurant anddistillery that started with big
dreams.
And ended in, let's just saychaos.
All right.
Let's dive in.
Yesterday.
I saw a post on Instagram from alocal vegan restaurant.
in a dire situation.
(01:09):
Through their posts.
I discovered there's a lot ofstrange, questionable things.
Around the setup they have withthe company that owns the
distillery where the restaurantis located.
it really had me thinking about.
The importance of having awritten.
Contract.
That a lawyer.
And an accountant.
(01:30):
May weigh in on.
Before you start going intobusiness with somebody and.
Allowing them to take over andcall the shots.
I see partnerships go awry andthese are.
legally formed partnerships Evenwith those, oftentimes
partnerships will dissolve.
But if they've been set uplegally, then there's a way to
(01:54):
make sure everyone is.
Compensated correctly.
It can get very sketchy if youdon't have a written contract,
even with somebody that you'refriends with.
You still want to have a writtencontract?
You don't want to ruin afriendship over
misunderstandings around who wasexpected to do what.
(02:14):
what the goal or expectedoutcome might be.
So I thought this was aninteresting case study to
discuss.
I want to go through some ofgeneral ideas around
collaboration.
then specifically this veganrestaurant in Portland.
I have not looked at any oftheir contracts.
I only know been posted on theinternet, which is limited.
(02:38):
information from oneperspective, which is the vegan
restaurant and not thedistillery.
I don't wander throw them underthe bus, not knowing exactly.
their understanding of thesituation But.
It does seem there was.
I don't want to say shady.
there was definitely.
Some misunderstanding.
I don't know if it was fraud.
(02:59):
I think it was more like thedistillery got in a bad
financial situation and theyjust were not upfront about what
was going on.
But again, that's allspeculation because I really
don't know from theirperspective.
I'm not going to name them, butI have corresponded with the
vegan restaurant via Instagram.
I feel okay.
Discussing their point of view.
(03:20):
let me ask you, have you everthought.
Oh, I'll just partner withsomeone.
Handshake deal, nothing fancy.
It'll just work out.
spoiler alert.
It might not.
collaboration.
Is super powerful.
I encourage people tocollaborate all the time.
But when you start handing overthe reins of your business to
(03:42):
someone else, this is where itgets squirly.
if the terms aren't clear and inwriting.
Things can go sideways fast.
let's start off with the good,why is collaboration amazing?
when it's done, it Can be a gamechanger, especially for small
vegan food businesses.
here's why.
One.
(04:02):
Shared costs.
Renting a space, buying a bulkor sharing resources.
Collaboration can save you tonsof money.
Now, if you were to do this.
keep your businesses completelyseparate.
I decide who's going to be.
Paying the rent.
Can you both pay them rent tothe landlord when you buy in
bulk?
Can you divide up the payments?
(04:24):
when you share resources, areyou making sure they're.
equally shared.
how are you going to compensateeach other have things really
thought through.
And write them down.
besides shared cost, there'salso new opportunities.
Collaboration is great for newopportunities.
Teaming up with anotherbusiness, gets you in front of
their audience.
(04:44):
So maybe your vegan cupcakesbrings customers to their coffee
shop or their drinks drivetraffic to your pop-up.
think of ways that you cancollaborate with somebody and
get in front of their audience.
they're highlighted yourhighlighted.
It's a win-win.
Third one is community vibes.
(05:04):
Collaborating can buildconnections.
strengthen relationships and youcan grow as part of a larger
ecosystem.
if your business is built on thelocal community, This really
helps it strengthens therelationship you've got each
other's back.
When it works, it can workreally well.
But, When you skip the details.
(05:27):
things can fall apart.
Trust me even the bestintentions can lead to huge
problems without a solid plan inplace.
This is where you really need tohave a lawyer.
And if you can't afford tolawyer up.
There are free resources thathelp you get legal guidance.
You could even use chat GPT tohelp you with a legal document.
(05:49):
Make sure that you both readthrough it.
sign it but whenever you cantalk to a lawyer, We want to
make sure that it is a win-winfor both people that are
collaborating.
We don't want to allow forsomeone to take advantage of
you.
here's the thing.
contract doesn't mean you don'ttrust the other person.
It's the opposite.
It's about protecting both ofyou.
When everyone knows what'sexpected.
(06:11):
There's no confusion.
no awkward conversations andhopefully no drama.
The last thing you want.
It's two people arguing insideof a food truck.
Over.
Expenses.
Or money you.
Deposited into your personalaccount Let's avoid the drama
have a contract.
(06:32):
Here's what a good contractshould include.
who does what.
Spell out the roles andresponsibilities.
If you're the chef.
Are you also responsible for.
Getting the rent paid.
If you're handling marketing.
What does that actually looklike?
If you think it looks like youhanging out on a beach with a
(06:53):
updating Instagram.
Once a week that may not be whatyour partner is thinking.
Number two.
How will revenue and expenses besplit?
Who's paying for the ingredientsand equipment or the utilities.
What if you don't have enoughmoney in the business?
who out of pocket is going topay for this.
How will they be reimbursed?
(07:14):
Number Three.
What if it doesn't work out.
If someone wants out of thebusiness, what happens?
Do they sell their share of thebusiness?
Do they walk away?
Does it just dissolve?
Can they sell their.
Part of the partnership tosomebody else.
Now you're in business withsomebody that you don't even
know.
thinking ahead of differentscenarios will help you figure
(07:37):
out what needs to go into thiscontract.
Number for conflict resolution.
what happens when you don'tagree on something?
Trust me, it's going to happenat some point.
have a plan in place of howyou're going to come to a
resolution.
Are you going to take a vote?
the votes be.
Hidden.
What if there's only two of youhow are you going to agree on
(07:58):
this?
Does there need to be consensusbetween all the partners.
Will your employees be able toweigh in on this?
as your business changes overtime, say you start out with no
employees.
when you start adding employees,think about how that might
change some of the wording inthe contract.
go back and update it.
(08:18):
you can bring a lawyer in tohelp you adjust and update this.
Without clarity, you're leavingeverything up to interpretation.
And this is where people gethurt businesses.
Fail.
friendships.
can end and get ugly.
And nobody wants that.
So here's today's case study.
this is about when collaborationgoes.
(08:40):
Sideways.
the vegan business posting onInstagram There was a possible,
nondisclosure agreement.
I don't want to overstepanything or have to take this
down because I'm naming namesWe'll just say vegan restaurant
and distillery.
if you know who I'm talkingabout, that's fine.
Okay.
So this vegan restaurant theypartnered and I'm using air
(09:01):
quotes.
partnered with a distillery.
In Portland.
A partnership.
Is legally bound.
There are legal requirementswhen you have a partnership.
In the USA.
Partnerships have to file theirown tax returns.
when I'm saying they partnered,I don't think they actually are.
Partnering.
(09:21):
I think they collaborated let'scall it that.
So the restaurant operatedinside of the distillery.
when they agreed to do this, itseemed like a win-win
opportunity.
I think the thought was therestaurant would bring in people
to eat food then the distillerywould provide drinks and
together they would attractcustomers.
(09:43):
it was supposed to be a win-win.
But here's the problem.
There was no contract.
no ownership agreement, nowritten rules about money.
Roles or who handled what.
It was all just verbal.
And here's how it all wentwrong.
The restaurant didn't own itsoperations.
All of their finances, bankaccounts, payroll, everything.
(10:07):
Was controlled by thedistillery.
the head of operations for therestaurant.
Was not allowed to see the bankstatements.
Turns out.
Vendors weren't paid.
Employees were left footing thebills for certain supplies and
inventory.
And it looks as ifreimbursements were taxes,
payroll.
Which is super illegal.
(10:28):
Again, I'm getting this from.
Instagram.
The next piece of chaos was Thepeople in the restaurant were
employees of the distillery.
Even though it was considered aseparate restaurant.
Essentially.
The restaurant was funding thedistillery Then there were labor
violations.
Employees, weren't getting paidfor some of their shifts, PTO
(10:50):
and sick time were denied.
And tip pooling was.
So messy that staff didn't evenknow if they were getting the
tips they earned.
Then there seems to be some coolWorshan without ownership.
So when the restaurant stafftried to fix things, they were
told to form their own LLC.
Take over all the financialresponsibility and sign a lease
(11:14):
with just three days.
Notice.
And they had to sign anondisclosure agreement so they
could not talk about it or getlegal advice.
This is why this deal is sofundamentally flawed.
The employees are taking all therisk of ownership.
They're paying rent utilities,maintenance costs without
receiving any of the rewards,the equity, profit sharing, or
(11:35):
decision-making power.
This just seems.
Ludicrous by forcing employeesto form an LLC and assume
responsibility.
The distillery is absolvingitself of liability for its
mismanagement while retainingcontrol over licensing.
And other critical elements ofthe business.
And without access to financialrecords, the employees.
(11:58):
Which includes the head ofoperations.
Cannot assess the restaurant'sprofitability or determine
whether the lease terms are fairor viable.
The whole thing seems unfair.
And.
Riddled with.
problems.
I think if they consulted alawyer on this, I don't think
that these things would haveoccurred.
the way it was set up shouldhave been full of red flags.
(12:22):
Part of the root problem was thecollaboration between the
restaurant and the distillerylacked a written contract.
Without a contract.
There were no safeguards toensure financial transparency.
The restaurant has no legalcontrol over its own operations.
And the employees had noprotection against mismanagement
or unfair treatment.
(12:43):
This is like trying to.
Own a business without owningthe business.
You're just giving the reinsover to somebody else.
what can we learn from this?
One always have a contract,whether you're partnering on a
pop-up sharing a kitchen orrunning a joint venture.
Put everything in writing.
Even if you're working withfriends or family, The contract
(13:06):
is about protecting everyoneinvolved.
Two.
Prioritize transparency.
Make sure both parties haveaccess to financial records and
a clear understanding of howrevenue and expenses will be
handled.
Three understand your rights.
If you're not an owner.
Make sure the agreementexplicitly defines your role.
(13:29):
And ensures fair compensationfor your contributions.
Four.
Think longterm, a goodpartnership.
Doesn't just work in the shortterm.
It should be sustainable overtime.
If the restaurant and thedistillery had a clear written
agreement from the start.
They could have avoided a lot ofstress, confusion and financial
(13:50):
strain.
the restaurant.
could have avoided.
Being taken advantage of.
And again, I don't know theother side of this, but it
sounds like they were beingtaken advantage of.
why did this even happen?
The restaurant staff didn't ownthe business.
they were running the show, butdidn't have legal control or
equity in the operation.
The distillery held all thecards, banking, licensing,
(14:13):
payroll, and the restaurant wasstuck trying to clean up the
mess they didn't create.
This is why entity structurematters.
If You want to own the business?
Set up an LLC and S-corp orwhatever works for your type of
business, contact, an accountantor a lawyer but make sure you
have the rights Don't letsomebody else hold the reigns of
(14:35):
your creative vision.
It's your dream.
Don't let someone else ruin it.
Or.
run your brand into the ground.
it sounds like the distillerywas taking on the liability But
I don't know for sure if theyhave the credit cards in their
name.
Or the restaurant, which seemsvery bizarre to me because if
they're paying the payroll, itseems like they have to have the
(14:58):
credit cards.
And the distillery name.
I don't know.
It's very, weird If you're goingto start a business.
Do your homework.
if you haven't done yourhomework around legal and
financial planning, it's nevertoo late.
Get on it.
I know that contracts and legalstuff.
Aren't the fun part of running abusiness.
But they're absolutelyessential.
Before you enter into apartnership.
(15:19):
Here's what you do.
One.
Talk to a lawyer.
Get a professional to review anyagreements.
Especially leases or contracts.
And make sure that the terms arefair, clear, and protect your
interests.
And in this case protects youremployees.
Because.
In this case.
The employees of the restaurant,weren't really their employees.
(15:42):
They were the employees of thedistillery.
Two.
Work with an accountant.
I'm an accountant.
You need to have someone thatcan help you understand the
financial side.
whether it's revenue splits,taxes or ownership, equity.
You want somebody on your sidethat can guide you They'll make
sure that you're not walkinginto a deal that will sink your
(16:02):
business.
do your homework.
research, your partner.
Are they financially stable?
Have they run successfulbusinesses before?
Do they have a good reputation?
Have they paid their vendors.
Have you looked at theirfinancial statements.
If you don't know what you'relooking at.
Have an accountant look at theirfinancial statements.
You may even want to have thosefinancials audited.
(16:25):
To verify they are.
True and not tampered with.
And most importantly, take yourtime.
Don't let anyone rush you intosigning something you don't
understand.
A bad deal can take years torecover from.
If you recover at all.
Talk to a professional.
whenever you sign a businesscontract.
So what's the big takeawayshere?
(16:47):
collaboration is awesome, butonly when it's built on trust
transparency and a solidfoundation of clear written
agreements.
You can't just assume thatpeople are coming from the same
place that you are.
if you're a vegan foodentrepreneur, Or really any kind
of business owner.
Make sure you're protecting yourwork, your finances and your
(17:08):
dreams.
This is your passion, right?
You don't want someone squashingyour dreams.
Don't give someone else thepower to derail everything that
you've worked for.
Thanks for hanging out with metoday.
if you found this helpful, shareit with a friend, leave a
review, or reach out with yourown business questions.
Until next time, keep crushingit, keep creating.
(17:28):
And you, my friends are theheroes because.
Compassion starts on the plate.
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