Restaurant Partnership Agreement

Restaurant businesses are unique. This template includes clauses based on how restaurant businesses actually work:

• Includes clauses covering both ownership and business formation, and day-to-day operations when running a restaurant with a partner
• Makes both parties equal owners who form an LLC to register the restaurant and hold title
• Requires both parties to approve/sign before incurring debt, contracts, or other business deals related to the restaurant
• Includes language about appointing a general manager rather than each partner managing day-to-day decisions
• Creates a restaurant business bank account, requiring both parties to approve withdrawals

Free to download and fully editable in Word or PDF.

Who It's For

Restaurant partnerships can come in many forms. This partnership agreement works in most situations where two parties are co-owning a restaurant business. It’s particularly well-suited to: 

• Two people who are starting a new restaurant concept together and contributing money and time equally.
• A chef or operator who is teaming up with an outside investor to open a restaurant.
• An existing restaurateur looking to add a partner to an established restaurant.
• Silent investors and active operators looking to partner, where one will run the restaurant, and one will provide capital.

If you have more than two partners or the equity split isn’t 50/50, you should have an attorney tailor this agreement to your situation. This template lays the groundwork. 

What's Included in the Restaurant Partnership Template

Avoid arguing about who does what and how money gets split. This restaurant partnership agreement includes clauses covering the majority of issues that cause problems between restaurant co-owners.

• Business information: name, address, and description of the restaurant venture
• Ownership stakes: defined as equal in this agreement and formed as an LLC in a specific city or state
• Capital requirements: how much money each partner must provide; it specifies the amount equally in this template
• Decision-making: both partners have to agree on important business decisions.
• General manager designation: parties agree to hire a third-party general manager to handle day-to-day decisions
• Bank account controls: the restaurant will have a business bank account, with both parties required to approve expenditures
• Other businesses: if one partner wants to start another restaurant or venture, they must provide advanced notice to the other partner
• Profit distribution: annual profits are split equally and distributed on a defined schedule
• Terms for dissolution: under what circumstances can one partner buy out the other

How to Write Your Restaurant Partnership Agreement

The template gives you the structure. Now it’s up to you to fill in the details about your new restaurant venture. Some of the sections below need careful thought.

1. Take the time to decide where you will register your business

It’s fine to have equal ownership of a restaurant and register as an LLC (limited liability company), but some states require restaurant businesses to include an operating agreement. Make sure to look up your state’s requirements for registering an LLC that operates as a restaurant before filling in the state field.

2. Decide exactly what an “equal contribution” of capital means

It’s easy to say you both contribute 50% of the money required to open the restaurant. But what happens when one partner invests $80,000 immediately, and the other plans to work off their contribution? Use the “capital contribution” section to define what equal actually means.

3. Tailor the manager clause to your real-life situation

Do you plan to hire an outside general manager to run the restaurant every day? If so, this clause works as written. But if one partner intends to act as the general manager rather than hiring a third party, you’ll need to adjust this clause so it doesn’t conflict with their power to make daily decisions as a partner.

4. Agree on what decisions each of you can make alone

This template requires both parties to agree to any business-related matters. That is great for “do we expand” type decisions. But what about smaller choices like hiring an additional part-time shift leader? Make a list of decisions each of you can make without consulting the other first. Then either delete this section or customize it with your negotiated terms.

5. Consider when annual profits will be distributed 

Leaving it at “profits will be split equally” is fine if you both know one partner runs a tight ship at year's end. But if one partner anticipates being short on cash because of slow winter revenue or high build-out costs, you may want to change how often profits are distributed or allow one partner to hold back on their portion of the profit.