How To Determine % Of Profits In Restaurant Business

[Sylvia]

Can anyone help with the following quetion? I will be starting a small restaurant business. A family member is interested in being the cook and contributing 50% of the cost of the food and associated condiments. I am the owner of the building, all materials, utensils, ets (all new and the cost was $60,000 to develop and install). What % of the profit is fair to share under these circumstances? What would be a good % if he did not contribute 50% of the cost of the food? Thank you very much for you advice.

[phanio]

If this person does not cover any costs or infuse any capital into the busienss - then you should only pay them a salary.

If they are contributing - try to determine that contribution in regards to your contributions.

Everything is negotiable - sit down with this person and work something out.

[localgirl]

I agree with no initial investment, the cook probably should get paid a salary.

However, in the restaurant business, often the cook or chef is an important part of the success of the business. You might want to consider offering an incentive along with the salary to buy into the business.

What type of restaurant? and where?

I wish you the best of luck.

localgirl