Life as a professional chef is not an easy one. However, those who gain themselves household recognition through hard work, experience and a little luck, may find the beginning of a new phase in their career: using their brand to open their own restaurant.
For most in this position, the best way to proceed is through a strategic alliance with investors and/or experienced operators to carry the chef’s brand and vision through to a successful restaurant. People with creative backgrounds and who provide service may not be used to thinking of bigger, global business details. That said, it is especially important to find business partners who share your vision and work with you, not around you. One of the biggest mistakes made by chefs at the outset is feeling that they do not have the leverage to protect themselves. Remember that your brand is your leverage and always go into a negotiation prepared to protect your intellectual property. An ideal agreement would provide that you, as the chef and brand-owner are licensing the use of your name and that you have a right to terminate the license. The risk in not asserting your position from the beginning is that, in an effort to secure funding, you may agree to terms that are disagreeable, such as hefty interest rates, prohibitive non-compete clauses, and issues regarding ownership of intellectual property, to name a few. If you fail to assert your value up front, in addition to feeling cheated and resentful of your partners, you may also lose the rights to your own name.
Yet, money is still the biggest cause of partner dissension and business failure. Follow the advice of your accountants and financial advisors. Always make sure they have no conflicts and that they are solely representing your interests. Be sure you have enough of a cushion in the event that your business does not take off immediately. It may also be wise to include a clause in your agreement calling for third party mediation in the event of a dispute between business partners. This independent third party’s advice is nonbinding, and can help parties resolve disputes without having to resort to litigation, allowing for a less public and more graceful exit. Perhaps most important, though, is not to rush into a business decision and to give yourself time to think over whether a particular business partnership is the right one for you. In other words, shop around before making any decisions!