Types of Contracts for Restaurants

As a restaurant owner you are bound to encounter many different types of contracts that will affect your relationships with suppliers, contractors and employees. Before signing or drafting any contract you should make sure that the terms are as clear as possible and all essential aspects of the agreement you are making are reflected in the contract.

As a restaurant owner, the first contract you may encounter is your lease for your restaurant space. Your lease will dictate the essential terms of your relationship with your landlord including the amount of your rent, lease renewal procedures, the length of the lease and the amount of time necessary to terminate your lease. Be sure to discuss alterations to the property with your landlord as some alterations could be considered lease violations. Also, you should take note of any provisions regarding late rent payments and how security deposits will be handled.

You may wish to bind your employees to certain terms by providing them with an employment contract while they work at your restaurant. Employment contracts state the terms of employment such as pay, benefits, sick time, disciplinary procedures, promotion procedures and termination procedures. Although employment contracts are not required to hire an employee, they are desirable as they clearly define workplace duties and expectations.

Contracts with your food suppliers or paper product suppliers will dictate the terms of when and how goods will be delivered to your restaurant. A well-thought-out supplier agreement is essential because if your supplier fails to provide the goods you require, you may be forced to temporarily close your restaurant or seek an alternate supplier. Common things to consider in a supplier agreement include: how will the supplier compensate you if delivery is late, how will prices change throughout the year as the availability of certain foods changes and when will routine deliveries occur. In your paper supply agreements be sure to consider adding provisions regarding periods of the year when your restaurant may receive a greater influx of patrons.

Restaurant owners are required to hire contractors from time to time in order to obtain certain services such as refrigeration and kitchen maintenance, cleaning of uniforms, rugs and linens and repairs to your dining space. When reviewing a contractor agreement, be sure to pay attention to the contractor's insurance coverage and necessary indemnification clauses. An indemnification clause will protect your restaurant if the contractor accidentally hurts someone or causes damage while working on your property.