Off Premise Catering

Off Premise CateringChapter two –

Laws, Locations, and Contracts

Essentials

Hire a Lawyer

Class Dismissed

EssentialsAre Common to Every Business – not just Catering

Understand the Legal and Regulatory Environment

Starting a business Physical Location of the Business Funding Contracts, Deposits, Cancellations and Refunds

Legal Aspects and Location

Many Small Caterers – especially start ups ignore the legal and regulatory requirements by:

1. Cooking Food in Their Home (can cook in clients home) – Violations covered by Florida DBPR2. Operating a commercial business in a residentially

zoned area3. Do not carry proper insurance4. Exception for “Cottage Industries”

State & Local RegulationsEach Governmental Level has its own Regulations:ZoningOccupational LicenseLicense to Sell food to the PublicHealth Permit – Plan ReviewCertifications (Food Manager Safety)Fictitious Name Registration

Paying the PiperState and Local Sales Taxes

Workers Compensation

Local and State Permits and Fees – Fire Department, County Clerk Sewer, Signage, etc.

Uncle SamBusiness must apply for an Employer Identification Number to pay:

Income Taxes withheld from employeesEmployer/Employee Social Security (FICA)Employer/Employee Medicare Tax (MICA)Federal Unemployment Taxes (FUTA)

TAXESEmployment Taxes:

All Business are required to withhold federal income and social security taxes

Paid Quarterly Social Security is split (7.5%/7.5%) Self Employed pay the full 15%

Taxes should be paid in full and on time – penalties can double the amount owed in just a few months

More TaxesIncome Taxes Federal Unemployment Taxes

Funded by Employer taxes

In Some Cases State Unemployment taxes will reduce the amount due in Federal Unemployment Taxes Due

Established Businesses with fewer claims pay less tax than new companies or those with higher claims

Other Federal Regulations

Forms I-9 for Immigration Records –Keep these separate for audit purposes – not in employee files

38 % of ICE audits in 2012 were restaurants (WSJ 9/13/13)

Anti – Discrimination requirements –Americans with Disabilities Act

Forbids discrimination in the hiring or termination of employees unless the disability procludes the person from doing the job –

Develop Job Descriptions

Professional Help

Hire experts to help:

Good Attorney

Good Accountant

Legal Forms of Operation4 Main forms of Business

PartnershipLimited PartnershipLimited Liability Company (LLC)Corporation“C” Corporation

“S” Corporation

PartnershipsPartnership –

2 or more people invested, all assets become equity in the business. Each partner is legally responsible for the actions of the other(s)

Limited Partnership –Most commonly used for Real Estate Syndications.

Legal costs can be high as these are typically “Tailor Made” and very complex

CorporationsLimited Liability Corporation (LLC)

Each Partner’s liability is limited to the amount of the investment – personally liable for negligent acts

Subchapter “C” CorporationCorporation pays tax on its profits and the owners

also pay individual tax on their income

Subchapter “S” CorporationCorporation only pays tax on profits

How to Survive a Family Owned Business

“You Can Choose your Friends, But not your Family”

(Te’s Corollary – You Marry the Family, too!)

Have Written Contracts + Employee HandbookJob Descriptions and RolesBusiness is BusinessConduct Weekly Meetings

Finding a Facility3 Basic Options:

Existing Operation – Hotel, Restaurant, ClubCommissary designed for Off Premise F&B

SupportUnderutilized Kitchen – Church

Rent should be no more than 10% of projected Revenue

Facility LeaseConditional –

Move in only if and after all necessary licenses and permits are obtained

Assignable –If the business fails or outgrows the facility before

the lease has expired, the facility can be subleased

Flexible –In the case of the death of a partner – the lease can be terminated without penalty

FacilityLook for:Roof Leaks

Sufficient Parking

Delivery Doors

Proper (code) lighting, walls, ceilings

Adequate Utilities – water, gas

Age of equipment

Garbage Removal

Storage

Ventilation and Air ConditioningI

Finance & FundingSources of Funds:SavingsFamily MembersInvestorsSBA (Government)Bank loans and Lines of Credit Equipment Financing

SBA Loans

7 (a) Loan Guarantee – Large Loans of up to $2 MillionLow Doc and SBA Express – up to $150,000Micro Loans – small loans up to $35,000

Catering ContractsNeed to have a working knowledge of what a contract is and how it is likely to be interpreted by the courtBe Specific 3 General Theories upon which a caterer can be held liable 1. Breach of Contract2. 3rd Party Liability – use of reasonable Care3. Statutory violations – Alcohol Service or fire codes

Let’s eat Grandma!

Let’s eat, Grandma!

Punctuation saves Lives!!!

The Devil is in the DetailsThere is never “too much” detail in a catering contractClient InformationEffective Date of contractEvent location, date – times (set up, event, tear down)Number of guests – guarantee, when given, overage Menu specifics – including beveragesStaffing Equipment

Floor Plan and Seating ChartMethod of verifying attendanceCharges for additional GuestsDeposit PolicyCharges for extra Hours (if venue allows)Special InstructionsSecurityGarbage removal

Still more DetailsAdherence to laws and ordinancesTaxes and GratuitiesInsurance RequirementsLegal Statements (Acts of God, Civil Unrest, etc)Cancellation and Refund PoliciesDetailed list of chargesAll Changes should be in writing, dated and signed

Deposits, Cancellations & Refunds

Make sure that you cover disbursements of time and funds with a basic depositCancellations –

What is the reasonHow soon before the eventActual LossesHow much is time worth?

RefundsIt’s how you deal with the problem!

Stuff Happens – Be Proactive – Let Customer VentTake notes and ask pertinent questionsOffer SolutionsDon’t point fingers

Surviving a LawsuitLawsuits may happen weeks, months or even years later –Keep good records If there is any problem, make sure to document, keep for future records (someone falling, etc)Contact your attorneyContact the Insurance CompanyIs the suit for real or a “Nuisance”

Arbitration & MediationArbitration-

One person or a panel hears both sides of the suit and decides the case

Mediation – Involves a third party that negotiates between the

parties and tries to find the middle ground – must be willing to compromise

Next Week

No Class 9/23/20139/30/2013 -Chapter 3 – Menu

Planning

Quiz Chapter 2