Whether you are dreaming of opening a restaurant, wanting to ensure that your business is on track or ready to expand to the next level, The Law (In Plain English) for Restaurants has everything you need! Business EAN $16.95 U.S. $23.95 CAN UPC S PHINX ® P UBLISHING AN IMPRINT OF SOURCEBOOKS, INC. ® NAPERVILLE, ILLINOIS www.SphinxLegal.com ISBN-10 1-57248-523-X ISBN-13 978-1-57248-523-5 ✔ Protecting Recipes ✔ Tax Rules for Tips ✔ Franchising ✔ Trademarks for Menus and Products ✔ Hiring and Firing ✔ Leases ✔ Advertising ✔ Insurance Make Your Restaurant Thrive. C ooking is your passion. Making a living with your cuisine is your dream. Organizing your restaurant is the key to your success. The Law (In Plain English) for Restaurants is your comprehensive guide to working in the food industry. It looks at the business of running a restaurant and clarifies the laws affecting your business. Learn all the essential details to become a success and gain valuable insight on issues unique to the restaurant industry, such as— Make Your Restaurant Thrive. ® ® • Develop a Business Plan • Finance a New Restaurant • Choose the Right Location • Hire Employees • Protect Recipes • Keep Taxes Low Attorneys at Law Leonard D. DuBoff and Christy O. King and Others in the Food Industry and Others in the Food Industry The Law (In Plain English) ® for Restaurants The Law (In Plain English) ® for Restaurants Restaurants Law for The Restaurants Law for The DuBoff King (In Plain English) ® ® (In Plain English) THE LAW (IN PLAIN ENGLISH) ® Leonard D. DuBoff Christy O. King Attorneys at Law SPHINX ® PUBLISHING AN IMPRINT OF SOURCEBOOKS, INC. ® NAPERVILLE, ILLINOIS www.SphinxLe gal.com for RESTAURANTS and Others in the Food Industry Printed and bound in the United States of America. SB — 10 9 8 7 6 5 4 3 2 1 Library of Congress Cataloging-in-Publication Data DuBoff, Leonard D. The law (in plain English) for restaurants and others in the food industry / by Leonard D. DuBoff and Christy O. King 1st ed. p. cm. Includes bibliographical references and index. ISBN-13: E 978-1-57248-523-5-523-5 (pbk. : alk. paper) ISBN-10: E1-57248-523-X-523-X (pbk. : alk. paper) 1. Restaurants Law and legislation United States Popular works. 2. Restaurateurs Legal status, laws, etc United States Popular works. 3. Food law and legislation United States Popular works. I. King, Christy O., 1969- II. Title. KF2042.H6D83 2006 344.7304'64 dc22 2005035094 Copyright © 2006 by Leonard D. DuBoff and Christy O. King Cover and internal design © 2006 by Sourcebooks, Inc. ® All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means including information storage and retrieval systems—except in the case of brief quotations embodied in critical articles or reviews—without permission in writing from its publisher, Sourcebooks, Inc. ® All brand names and product names used in this book are trademarks, registered trademarks, or trade names of their respective holders. Sourcebooks, Inc., is not associated with any product or vendor in this book. First Edition: 2006 Published by: Sphinx ® Publishing, An Imprint of Sourcebooks, Inc. ® Naperville Office P.O. Box 4410 Naperville, Illinois 60567-4410 630-961-3900 Fax: 630-961-2168 www.sourcebooks.com www.SphinxLegal.com This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. From a Declaration of Principles Jointly Adopted by a Committee of the American Bar Association and a Committee of Publishers and A ssociations This product is not a substitute for legal advice. Disclaimer required by Texas statutes. To my partner in law and in life, Mary Ann Crawford DuBoff, for everything good in my life; and to my children, Colleen Rose, Robert Courtney, and Sabrina Ashley; and to my grandchildren, Brian Michael and Taliek Isaiah, for completing the circle. —Leonard D. D uBoff F or Andrew, a gifted reader, and for Annalise, an outstanding writer. —Christy O. King [...]... available for nonlawyers to help them understand the complex legal rules they are required to follow It was my belief that The Law (In Plain English)® series would serve these goals, and over the years, my expectations were realized The books in The Law (In Plain English)® series have been used as educational textbooks in law schools and in other educational institutions, as well as for purposes of... share of the profits, whether distributed or retained, and each is entitled to the same proportion of the 6 • The Law (In Plain English)® for Restaurants partnership deductions and credits The partnership must prepare an annual information return for the IRS known as Schedule K-1, Form 1065, which details each partner’s share of income, credits, and deductions The IRS uses it to compare against the individual... liability for the debts of the partnership Each partner is also liable for the negligence of another partner and of the partnership’s employees when a negligent act occurs during the usual course of business 4 • The Law (In Plain English)® for Restaurants A joint venture is a partnership for a limited or specific purpose, rather than one that continues for an indefinite or specified time For example,... to do their best to comply with the law in order to enhance their businesses It is for these reasons that I began writing this volume in The Law (In Plain English)® series and enlisted the aid of my colleague, Christy King, another principal in our law firm, so that our combined knowledge of the field could emerge on these pages The experience I have gained in representing restaurants, gourmet food. .. described formally For example, if you and another person decide to import and sell gourmet foods, it is essential for you to spell out in detail the arrangements between the two of you If you do not, you could find that the other person is your partner and entitled to half the income you receive, even though his or her contribution was minimal You can avoid this by sim- 8 • The Law (In Plain English)® for. .. this work before enjoying our time together xvi • The Law (In Plain English)® for Restaurants Finally, I would like to recognize the aid of my partner in law and in life, Mary Ann Crawford DuBoff, for all of her work on this text Words are inadequate to express the appreciation I feel for all she has contributed to this and all of my projects Leonard DuBoff Portland, Oregon ORD REW FO The dream of... industry This text is the product of that experience and the suggestions of several wellrespected clients who felt there was a need for a book such as this My collaborator, Christy O King, and I have worked together on several other books in The Law (In Plain English)® series, and this volume joins that user-friendly series The earlier books in the series were written to educate and assist craftspeople,... protect both the assets of the partnership and the personal assets of each partner Since no formalities are required to create a partnership, if the partners do not have a formal agreement defining the terms of the partnership, such as control of the partnership or the distribution of profits, state law dictates the terms State partnership laws are based on the fundamental characteristics of the typical... liability partnerships, and a few hybrids Once you decide which of these is the best form for your business, consider the appropriate documents, such as partnership agreements, corporate bylaws, or operating agreements These documents define the day-to-day operations of a business and must be tailored to each business’s individual situation 2 • The Law (In Plain English)® for Restaurants Offered here... high-tech xx • The Law (In Plain English)® for Restaurants entrepreneurs, and others involved in small businesses Reviewers have praised our efforts in providing our readers with tools that are intended to sensitize them to the many legal issues that can and do arise in their chosen specialties It is hoped that this volume will continue that tradition by providing those in the restaurant and hospitality . Industry and Others in the Food Industry The Law (In Plain English) ® for Restaurants The Law (In Plain English) ® for Restaurants Restaurants Law for The Restaurants Law for The DuBoff King (In. Restaurants Restaurants Law for The Restaurants Law for The DuBoff King (In Plain English) ® ® (In Plain English) THE LAW (IN PLAIN ENGLISH) ® Leonard D. DuBoff Christy O. King Attorneys at Law SPHINX ® PUBLISHING AN