New restaurants close within the first year at a rate of 19 percent, according to an analysis by Forbes magazine. If you are thinking of starting a restaurant, be sure to take some steps to protect your assets against these threats.
Many new restaurant owners become so excited about buying a particular franchise that they forget to read the fine print carefully. Then, after the franchise gets their money, the owner finds out that they have to obey a whole host of rules that they were not expecting. Others find that they do well for a few years, then someone buys the franchise, and the new owners are bullies that you have to deal with on an ongoing basis. Franchise Gator warns new restaurant owners} to be aware of any franchiser who is not invested in your success. It falls to you to make sure that you have the franchiser’s support during the duration of this business venture.
Personal Injury Lawsuits
Customers can slip and fall in the least expected ways, which can result in a personal injury lawsuit. Young restaurant startups may be doing everything correctly, but the cost of defending themselves against these lawsuits can be overwhelming. It is not unusual for restaurant owners to have to pay between $34,000 and $45,000 in legal costs if someone sues them. That number can skyrocket if the person wins in court.
While your home-cooked meal may taste fantastic, you must follow state and federal health codes when you open a restaurant. Timing, temperature, food storage, cross-contamination, personal sanitation, and chemical use are just a few of the things that code enforcers are looking at to see if you’ve done something wrong. Even giant chains have been shut down when only one of their restaurants had a health-code violation.
Restaurant owners often overlook the numerous Occupational Safety and Health Administration (OSHA) requirements that they must meet. Hazard communication, electrical hazards, slips, trips, improper lockout procedures, and lack of machine guarding are just a few of the things that a restaurant can get in trouble for, and the costs of paying fines cause many restaurants to go under. According to WebstaurantStore, ensuring the health and safetyt of your employees as they work is essential to having a successful foodservice business.
Liquor Damages Liability
When you serve alcohol at your establishment, your responsibility doesn’t end when your guests exit the door. If intoxicated guests go on to get into accidents or cause other damages, you can be held liable for giving them too much alcohol. You can help discourage this by making sure that your servers and staff are fully trained in proper liquor dispensary protocol. However, as AimToServe points out, “Learning to serve alcohol is only half the battle. After that, it’s a matter of making sure employees are upholding the procedures learned in their ABC classes.” No system is foolproof. Keep wary of how your servers treat their alcohol privileges and keep those policies enforced.
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