Off Premise Catering Chapter two Laws Locations and

Off Premise Catering Chapter two – Laws, Locations, and Contracts

Essentials Hire a Lawyer Class Dismissed

Essentials Are Common to Every Business – not just Catering ü Understand the Legal and Regulatory Environment ü Starting a business ü Physical Location of the Business ü Funding ü 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 DBPR 2. Operating a commercial business in a residentially zoned area 3. Do not carry proper insurance 4. Exception for “Cottage Industries”

State & Local Regulations Each Governmental Level has its own Regulations: Zoning Occupational License to Sell food to the Public Health Permit – Plan Review Certifications (Food Manager Safety) Fictitious Name Registration

Paying the Piper State and Local Sales Taxes Workers Compensation Local and State Permits and Fees – Fire Department, County Clerk Sewer, Signage, etc.

Uncle Sam Business must apply for an Employer Identification Number to pay: Income Taxes withheld from employees Employer/Employee Social Security (FICA) Employer/Employee Medicare Tax (MICA) Federal Unemployment Taxes (FUTA)

TAXES Employment 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 Taxes Income 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 new companies or those with higher claims than

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 Operation 4 Main forms of Business Partnership Limited Liability Company (LLC) Corporation “C” Corporation “S” Corporation

Partnerships Partnership – 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

Corporations Limited Liability Corporation (LLC) Each Partner’s liability is limited to the amount of the investment – personally liable for negligent acts Subchapter “C” Corporation pays tax on its profits and the owners also individual tax on their income Subchapter “S” Corporation only pays tax on profits pay

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 Handbook Job Descriptions and Roles Business is Business Conduct Weekly Meetings

Finding a Facility 3 Basic Options: Existing Operation – Hotel, Restaurant, Club Commissary designed for Off Premise F&B Support Underutilized Kitchen – Church Rent should be no more than 10% of projected Revenue

Facility Lease Conditional – Move in only if and after all necessary licenses permits are obtained and Assignable – If the business fails or outgrows the facility before 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 the

Facility Look for: Roof Leaks Adequate Utilities – water, gas Sufficient Parking Age of equipment Delivery Doors Garbage Removal Proper (code) lighting, walls, ceilings Storage Ventilation and Air Conditioning I

Finance & Funding Sources of Funds: Savings Family Members Investors SBA (Government) Bank loans and Lines of Credit Equipment Financing

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

Catering Contracts Need to have a working knowledge of what a contract is and how it is likely to be interpreted by the court Be Specific 3 General Theories upon which a caterer can be held liable 1. Breach of Contract 2. 3 rd Party Liability – use of reasonable Care 3. Statutory violations – Alcohol Service or fire codes

Let’s eat Grandma! Let’s eat, Grandma! Punctuation saves Lives!!!

The Devil is in the Details There is never “too much” detail in a catering contract Client Information Effective Date of contract Event location, date – times (set up, event, tear down) Number of guests – guarantee, when given, overage Menu specifics – including beverages Staffing Equipment

Floor Plan and Seating Chart Method of verifying attendance Charges for additional Guests Deposit Policy Charges for extra Hours (if venue allows) Special Instructions Security Garbage removal

Still more Details Adherence to laws and ordinances Taxes and Gratuities Insurance Requirements Legal Statements (Acts of God, Civil Unrest, etc) Cancellation and Refund Policies Detailed list of charges All Changes should be in writing, dated and signed

Deposits, Cancellations & Refunds Make sure that you cover disbursements of time and funds with a basic deposit Cancellations – What is the reason How soon before the event Actual Losses How much is time worth?

Refunds It’s how you deal with the problem! Stuff Happens – Be Proactive – Let Customer Vent Take notes and ask pertinent questions Offer Solutions Don’t point fingers

Surviving a Lawsuits 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 attorney Contact the Insurance Company Is the suit for real or a “Nuisance”

Arbitration & Mediation Arbitration 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 9/23/2013 9/30/2013 -Chapter 3 – Menu Planning Quiz Chapter 2