You and two friends, Pat and Ron, have decided to form a new business, running a

Question

You and two friends, Pat and Ron, have decided to form a new business, running a restaurant. Your friends, pat and Ron, bring the following to the business: Pat is something of an entrepreneur. He has several ventures and ready access to financing for your business. Because of his varied interests, however, he doesn’t want to be an employee of the business. He does, however, want to have some input into the management of the business. Ron has a full time job, which she is willing to leave to make a full time commitment to running this restaurant. She has limited funds available and hopes to develop “sweat equity” in the restaurant through her work effort. She is a skilled chef who will manage the kitchen and the food production. You are the “idea person”. You have conceived of this enterprise, and are charged with getting everything lined up. You will be involved in the day-to-day running of things, and will be the manager of the business side of the restaurant.

IV. What risks do you undertake in operating a restaurant? Discuss EVERY kind of problem that we have discussed in class, including, for example, contract, employment, tort, and so forth. How do you protect yourself against those risks? Are the solutions you have come up with practical ones? Why? (Consider ALL risks: UCC, tort, financial, etc.).

Explanation / Answer

There are various risks in opening up a restaurant. Let us discuss only the top three that should affect the business so badly.

Above mentioned risks are the three major risks involved in opening and maintaining a new restaurant.

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