Buying a restaurant is often thought of as a less risky option than starting your own restaurant business from the ground up. However, without proper research, due diligence, and consideration for the essential legal steps and potential liabilities involved, it can be even more risky than starting your own restaurant business.
In early-stage start-ups, individual entrepreneurs and investors will often enter agreements, by way of letter of intent, memorandum of understanding, or preincorporation contract, to form a business entity for their new enterprise. The following represents a list of some of the matters drafting parties should consider including in their agreement.
As a business lawyer, there are fundamental legal mistakes that I’ve seen numerous early-stage start-ups repeatedly make. For that reason, I have put together the following Ten Tips for Any New Start-up.
As a condition of initiating, continuing, or renewing a lease, some landlords or master tenants demand that a tenant pay undocumented “key money” (i.e., an up-front bonus payment made by the tenant to secure the tenancy). However, the California Civil Code, under Section 1950.8, prohibits the landlord in nonresidential leases from demanding “key money” or the landlord’s attorney fees incurred in preparing the lease, unless the amount is stated in “the written lease or rental agreement.”
There is no state statute or regulation in California which expressly exempts persons participating in an internship from the minimum wage and overtime requirements. Federal regulation provides that those who “employ”, meaning “suffer or permit to work”, must compensate workers for the services they perform for an employer. Therefore, internships in the “for-profit” private sector will generally be viewed as employment, which could create maddening expense or liability for employers who have unpaid interns. While state law is somewhat unclear, the Division of Labor Standards Enforcement (DLSE) has historically followed federal interpretations which recognize the special status of trainees and interns who perform some work as part of an educational or vocational program. Accordingly, the federal Department of Labor (DOL) has articulated six criteria, derived from the Supreme Court’s Portland Terminal case, to be applied to determine whether a “trainee” is exempt from the Fair Labor Standards Act (FLSA). The determination of whether an internship or training program meets this exclusion depends upon all of the facts and circumstances of each such program. The following six criteria must be applied when making this determination: