Chef/Owner Partnership

Hi there,
 
I'm looking into opening a sandwich shop with 2 other partners (1 will be the chef).  I was wondering if you all had any advice on how the profit shares/salary works.  My other partner won't be working in house, he's more our construction guy and investor.  I will be helping BOH, but mainly taking care of FOH and the books. The chef will do as a chef does (inventory, menu creation, day in/day in out in the kitchen, training new cooks).  The chef will probably put in more hours than me since he is the chef.
 
He can't live without a salary right now.  So I'm thinking of drawing up a contract where he gets a set salary, in addition to the profit share at the end of the year.  My other partner will have no salary and will only take profit share.  I'm thinking I'll take one for the team and just take profit share as well instead of adding a salary.  I really want us to succeed.  How would you go about doing this?
 
Thanks in advance.

Hi,
I don't know your exact situation but I would first talk with the partners and decide on the details of the partnership as much as possible, put it in writing, print one for each partner, and have everyone sign each one so as to avoid problems later on. 
Profit sharing and responsibilities are I think two important areas that should be talked about, and you should also talk about if and when your business does/does not make money as well.  Another thing that I feel important is how you would break the partnership.
 
Having a bigger share of ownership is good but that also means a bigger burden when the business loses money.  The percentage of ownership should be mainly determined by how much financial stake each partner has put in, but off course there can be other factors such as knowledge/experience in industry or the willingness to invest future time in the business.
 
Depending on what is not written in your post it can vary but if the construction/investor guy has put all the money and using his name/credit for leasing and other legal paperwork, I would say he deserves 50% or more of share in ownership.
And depending on how good the chef guy is, he may or may not be entitled between 10 to 25%.  If he needs to get paid for his time then that should make his share in the business smaller.
Lastly, for you...if you did not put any of your money in the business then you will have to put your time in the business.  But, would you keep working for free forever if your business keeps breaking even?  I don't think you would so I think the better idea would be you-get-so-much-money-for-so-many-working-hours type of arrangement, but that contradicts your stake in the business as a free worker.  Thus, even if you worked for free, you might want to limit that to, say, for six months or one year or something that you are comfortable with and decide how much you want to get paid afterward.
It may be a pain to talk about it with your partners and decide on the terms that everyone's happy with but I think it's a lot better than finding yourself unhappy the hard way after you invested a year of your time in the business.
 
Well, that's my take on it and I hope it makes sense.  There's no quick and definite answer but I think simulating different business scenarios and deciding on the partnership rules that everyone is happy with IN ADVANCE is very important.

I have been a partner and have had partners, never again.
 
I would like to know what type of sandwich shop the op is opening that would require 3 partners,  cooks and a working chef on salary,  in addition to the op as chef?
When I hear sandwich shop, I think cold sands, very minimal capitol investment.