Experienced Representation
For Arizona’s Businesses

What to do when a restaurant partnership goes sour

On Behalf of | May 2, 2024 | Business & Commercial Law

Running a restaurant with a partner begins as a shared dream. However, even ideal business relationships can take a turn for the worse.

If the partnership begins to falter, the causes need addressing before they irreparably damage the operation. Thankfully, there are practical steps that can repair the situation.

Communicate openly and honestly

Clearing up arguments begins with having a frank discussion. Owners should schedule a time to discuss their issues without interruption. During the meeting, they should express themselves clearly and listen intently to each other’s viewpoints. Merely reconsidering the other person’s perspective can sometimes reveal a solution.

Revisit the paperwork

Most restaurant unions start with an agreement that outlines each partner’s roles, responsibilities and what happens if things do not work out. Reviewing this document can clarify what legal and financial implications surround any decision.

Identify the core arguments

Perhaps the root of the conflict is not personal but rather relates to business operations, financial management or growth strategies. Identifying core concerns can shift the conversation from blame to solving problems. Partners should focus on what is best for the bottom line and attempt to find common ground.

Consider restructuring operations

Changing roles, adjusting financial contributions or amending decision-making processes could make all the difference. A fresh business arrangement might align better with each person’s strengths and serve the venture more effectively.

Seek mediation

Occasionally, partners need a neutral third party to facilitate interactions and hash out a compromise everyone can live with. Mediators specialize in conflict resolution and may offer alternatives not evident to the restaurant’s visionaries. An outside perspective could be fundamental to preserving the relationship and the business.

Decide on the future

When all else fails, restaurateurs must make tough decisions about the restaurant’s fate. Options include buying out one person’s share, selling the eatery and closing up entirely. Negotiations should focus on preserving the brand’s value and respecting the contributions of all.

While fixing a struggling restaurant partnership is rough, acknowledging the realities should lead to a renewed collaboration or a respectful conclusion. Either way, the outcome preserves the interests of both individuals.