All the Laws You Need to Know Before Starting Your Restaurant

All the Laws You Need to Know Before Starting Your Restaurant

On this episode of The Barron Report, brought to you by Kabbage, Paul speaks to Lawyer A.J. Yolofsky about what operators need to concern themselves with before starting their own restaurant concept. Yolofsky Law manages these types of start-ups often and has seen their fair share of poorly executed legal documents.

"Do you want a piece of paper or do you want peace of mind?" says A.J. "I recently had a client come to me and they're looking at acquiring another restaurant location and the other location said 'Oh, we've got all our documents. We're completely legal setup, everything.' And they very proudly brought out this corporate kit binder that they ordered online."

Needless to say, that story doesn't end well. Listen to this episode and follow along with the show notes below to learn how you can avoid major snafus like this one with just a few important steps. And if you find yourself needing some help funding your concept, turn to our friends over at Kabbage. They can help you prep your business and manage those new business expenses.

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GrubHub Drivers Ruled Contractors in Landmark Gig-Economy Case

GrubHub Drivers Ruled Contractors in Landmark Gig-Economy Case

In a landmark ruling Thursday, U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco concluded that a gig-economy driver does not qualify for the protection of employees under California law.

The decision is the first of its kind, setting a standard for arguments regarding “gig-economy” workers.

The gig-economy has gotten much press as of late. With a number of businesses like Grubhub and Uber working off the model of pairing customers with products and services through apps, many workers have found a new form of income allowing high flexibility in exchange for low skill, low wage, episodic jobs.

However, the case against GrubHub, brought on by Raef Lawson, claimed the company violated California labor laws by not reimbursing his expenses, paying him less than minimum wage and failing to pay overtime. His argument was based on the idea that Grubhub exerts a certain level of control over. The company expects drivers to be available to accept assignments during shifts they sign up for and to remain in designated geographical areas.

Lawson worked as a food-delivery driver with the company for less than six months while pursuing a career as an actor and writer.

At a hearing in October, Judge Corley expressed concern that Lawson’s resume filed with the lawsuit may have tainted the trial because the actor lied about completing a three-year program. The specifics of the program weren’t provided. However, Corley said Lawson was “dishonest” and that the resume “is really problematic to me.”

Charlotte Garden, an associate law professor at Seattle University, said to Bloomberg that Corley’s decision is a “doubly big” win for GrubHub since California’s relatively high standard for establishing workers as independent contractors will mean similar arguments in other states will most likely side with this ruling.

You can read more about this case at "Bloomberg."

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Getting Past the Labor Crunch Affecting the Restaurant Industry

Forget why it happened - or continues to happen - but there is a very real shortage of kitchen labor.

You can have a shimmering five-star Yelp rating, a filled dining room, and the best craft beer list around, but without staff to make food and make drinks, you are nowhere.

Throwing your hands up in meaningless desperation because ‘there aren’t people out there!’ is less than productive. Instead, get real about plugging employment holes.

Money Is an Option, but Not the Only Answer

Engaging younger employees, for instance, is a strategically smart move. Ask what they want and listen to their answers.

Some common requests, most often heard when talking with Millennial staffers, are:

  • Flexibility in scheduling - wanna bet your clutch salad guy won’t quit because he is scheduled during tomorrow’s DJ Khaled show? Be flexible or be rigid. One will break you.
  • Working with friends - dangerous footing, yes. But, especially significant to the highly social, younger employment pool, find some middle ground.
  • Let me use my phone - set guidelines, but don’t rip their phones from their hands. How do you feel about being out of touch?
  • Feed me - staff meal, for sure. Make it something that can be photo-worthy so they can talk about it online.
  • Keep me connected with something big - whether it is local charity support, a tie-in with a community group or a national campaign, social activism has spilled across many demographics. We all want to feel like we are identified with something bigger than ourselves, this can be a win on many levels.

Transportation Matters

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If your restaurant is in a metro setting, parking might be an issue.

Cooks’ and servers’ wages can succumb to costly transportation costs. Work a barter deal with a garage owner to secure spaces for your crew to park.

Encourage biking by having adequate bike racks and even give away locks.

Merch

Part of identifying with a purpose or mission, treat staff like a team not by just saying that you have a team. Branded shirts, hoodies, or jackets go further than you think.

For your modest investment, the team gets to reap the benefit of getting gear that represents their place of employment and you get walking advertisements. It’s a pride thing.

Using Social Media for More Than Driving Sales

Give your crew reasons to share the virtues of their great job.

Taking Phone Pictures of Food

Create Instagrammable moments with community-based events, mission-based experiences, and, just a lot of fun times.

Digital natives broadcast their days. Give them fodder to share with friends; friends that could need - or want - a job with you.

Feed them a great staff meal and let them share pics.

Spending Money on Staff Doesn't Have to Be Just Payroll

Adam Marcus, owner and operator of two Chick-fil-A locations in northern Delaware has a problem we all wish to have— the restaurants are too busy! This energized operator got serious about doing what bosses are supposed to: providing employees the resources they need to be even better at their jobs.

lemon squeezer machine

Marcus went extreme and closed a very busy Bear, Del. location for an extensive remodel and retool, to ensure a better experience for customers, but equally important improvements for the employees.

“We’re investing in some pretty cool equipment [like] commercial dishwashers, lettuce spinners. [We] just bought a machine that juices lemons rather than hand squeeze for lemonade. We are compartmentalizing our kitchen so that everyone has specific tasks rather than overwhelming the staff,” said Marcus who believes that a direct spend on the staff works just as well to hold onto the crew. “For kitchen leadership we've increased hourly pay and have thrown in performance based incentives, offered health insurance, increased vacation pay,” said Marcus.

Shane Timmons, a Montana line cook at Bullwinkle's Saloon & Eatery, seconds Marcus’ approach. “Reward your employees. Make them feel appreciated. Give them what you can afford to when you can. But most of all, let them work towards something," said Timmons. "Let them prove themselves and work towards a possible promotion or more hours if they are good employees.”

When in Doubt, Poach

Some of the better cooks are working across the street. Cliche, but true: Desperate times call for desperate measures. Find a shortcoming with a competing operator’s employment, path and/or exploit.

Seriously.

If a really good sous chef is unhappy at vegetarian place up the street, what can you do to make her happier? Is it creative input for the new menu? Perhaps a little better schedule?

The obvious caveat is that poaching can be a bit nefarious and can backfire. That neighboring owner might show up at the next local business owners’ meeting and sit next to you. Just be careful. A little competition is good when it’s done right. Just remember: what you do to another can be done unto you.

restaurant recruitment

If you haven’t noticed the shortage, good for you. Like most ripples, the splash will hit your operation soon enough. Be prepared by being proactive. Insulate the staff you have with good vibes, more than adequate tools - and meaningful pay - to keep them connected to your spot.

No more skipping the overtime pay or inflexible scheduling. Will a free t-shirt mend the rip in labor mesh? No. Are there steps you can take right now? For sure. There is not a singular approach to loosen the crunch.

Listening to current staff is a start, while being open-minded does more than ignoring the seriousness of where our industry stands right now.

By Jim Berman, Industry Expert

Labor Issues in the Restaurant Business

Between an industry gap in the shortage of cooks and unequal pay in the back of house, the topic of labor has been one of concern in the restaurant industry. In this episode of “On Foodable Weekly,” brought to you by the Foodable Network, host Paul Barron is joined by Hudson Riehle, VP of NRA Research & Knowledge Group, to talk about labor topics.

Watch the full episode to learn how sentiment around workforce in the restaurant industry has changed in the past quarter, upcoming labor challenges for multi-unit operators, and outliers that could impact the industry in the future.