Setting the Table by Danny Meyer paper

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THE LEGAL ASPECTS OF RESTAURANT MANAGEMENT

Chapter 3

David K. Hayes | Allisha A. Miller | Jack D. Ninemeier

The Professional Restaurant Manager

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Business structure

A legally recognized business entity.

Organizational structures for restaurateurs

– Sole proprietorship

– Partnership

– Corporation

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Sole proprietorship

A form of business structure in which one individual owns, and frequently operates, the

business.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Sole Proprietorships

• Sole ownership

• Owner assets used for expense, taxes, and debts

• Profits taxed at the same rate as personal tax

• A sole proprietor’s business may operate using a DBA

“Doing business as”

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Partnerships

• Two or more individuals or entities agree to share in the ownership of a business.

• Assume personal and joint liability for debt

• Taxed at the same rate as owners’ personal income

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Partnerships

Limited partnership A form of partnership similar to a general

partnership except that, in addition to one or more general partners (GPs), there are one or more

limited partners (LPs).

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Partnerships Limited partners (LPs)

• Invest money in the partnership

• Responsible for debt equal to the amount invested

• Cannot engage in management of the business

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Partnerships General Partners (GPs)

• May share in control of the business and profits

• Jointly responsible for the debts of the business

• May or may not be investors, but serve as the business’s operating managers

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Corporations

• Recognized as a legal entity, with privileges and liabilities separate from those of its owners

• Owners are called shareholders or stockholders

• The corporation, not the shareholders, are responsible for all business’ debts

• Profits are taxed twice

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Corporations

• Double Taxation – Taxes paid on profits earned – Taxes paid by owners on dividends issued to

them

Dividend

The portion of its profits paid by a corporation to its shareholders

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Corporations

S corporation (Subchapter S Corporation) A corporation that offers liability protection to its

owners but is exempt from paying corporate taxes on its profits.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Corporations

• Avoids double taxation – Must pay tax on profits even if they have not

be distributed to owners

• Good for smaller businesses with few employees

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Corporations

Limited Liability Company (LLC) A form of corporation created under state law

rather than federal law.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Organizational Structures

Corporations

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Restaurant Operations

Duty of care

A legal obligation that requires a specific type of conduct.

Reasonable care

The amount of care a reasonably prudent person would use in a similar situation.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Employees

Workplace discrimination Worker pay

Worker evaluation

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Employees Workplace discrimination

Discrimination

Unfair treatment to another person based on his or her religion, race, age, national origin, gender or

the condition of pregnancy.

Sexual harassment Threatening and illegal verbal, physical or visual

conduct of a sex-related nature

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Employees Workplace discrimination

Quid pro quo

The asking or demanding of sexual favors in exchange for maintaining employment

Hostile environment The presence of a verbally, physically or visually

offensive workplace

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Employees Workplace discrimination

Americans with

Disabilities Act (ADA)

Age Discrimination in

Employment Act (ADEA)

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Employees Workplace discrimination

Reasonable accommodation Any modification or adjustment to a job or the work

environment that will enable a qualified person with a disability to participate in the application process or to perform essential job functions.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Employees Worker Pay

The Federal Equal Pay Act

The Fair Labor

Standards Act

The Family and Medical Leave Act

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Employees Worker evaluation

Employee discipline

Performance appraisal

Progressive disciplinary program

A carefully planned series of corrective actions designed to encourage employees to follow established policies, rules and regulations.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Guests

All Guests Serving Food Serving

Alcoholic Beverages

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Guests

Title III requires all restaurants to:

• Remove barriers that prevent people with mobility impairments to use their facilities.

• Provide auxiliary hearing and visual aids.

• Modify any operating policies that could be considered to discriminate against people with disabilities.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Guests

Restaurants must protect guests from foodborne illnesses

or other harm

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Guests

Restaurant managers must know which of the

wide variety of state-mandated alcohol-related

laws, regulations and codes apply to their own

businesses.

Book Title Author name

The Professional Restaurant Manager, 1e David K. Hayes, Allisha A. Miller, and Jack D. Ninemeier

Restaurant Laws and Regulations

Laws Related to Guests Who may sell it When it may be sold

Where it may be sold

Who may serve it

Who may buy it

How it can be sold Required records of its sale