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JD McGee
12-14-2009, 10:15 AM
I'm thinking of partnering with a local restaraunt/pub owner to sell bbq at his place. I plan to offer a share of my profits from the bbq and sides that I prepare and sell in exchange for the use of the prep, storage, and serving facilities and am looking for a fair cut to offer. I'm thinking 25% of everything sold at the restaraunt and 10% of my catering...too much..too little...what say ye...:?::?::?:

Thanks,

JD

Bbq Bubba
12-14-2009, 12:33 PM
2 words.

Flat rate.

BigJimsBBQ
12-14-2009, 12:39 PM
JD - Why not just pay a set cost per month and sell him your Q to sell seperate. I tend to not work with % cuts as never goes good. I recomend set a cost for your product and a price you will pay for using the kitchen only.

JD McGee
12-14-2009, 02:57 PM
I can understand how the flat rate/established price would work well for the business owner...he/she will be getting their share regardless of sales. I am just starting out without any clientèle or future gigs in the near future and will be depending on the pub's customers and advertising (banner, website, menu, word of mouth, etc.) to help establish myself in the community. If I don't have sales...the cash comes out of my un-employed back pocket...and mama ain't gonna have none of that! :lol:

If I offer profit sharing...at least there will be incentive for the pub owner to advertise and sell instead of not caring because he/she is gonna get paid regardless...I see it as a win/win situation for both sides. The pub owner is not out a cent for start up...I provide all the meat, rubs, sauces, sides, etc. If the pub sells a plate for 10.00...he just made 2.50...If I do an off site catering gig for 500.00...the pub just made 50.00 just for letting me use the kitchen and refrigerator for a couple of hours.

landarc
12-14-2009, 03:23 PM
JD, the way I would do it if I was looking to share an office is this.

1. determine what it would cost flat rate.
2. estimate how much you think you will sell for the first 6 months
3. determine how much you need to reinvest into the business
4. determine if $0 pay is acceptable, if not, determine what you need. (hint: $0 is the right answer)
5. base your percentages on the above numbers.

I have seen these types of arrangements work out well for people, it is not the best way, but, it works. In the end, you should want to get out of this arrangement after one year. It is always easier to manage a business with fixed overhead. AMAP

JD McGee
12-14-2009, 04:33 PM
JD, the way I would do it if I was looking to share an office is this.

1. determine what it would cost flat rate.
2. estimate how much you think you will sell for the first 6 months
3. determine how much you need to reinvest into the business
4. determine if $0 pay is acceptable, if not, determine what you need. (hint: $0 is the right answer)
5. base your percentages on the above numbers.

I have seen these types of arrangements work out well for people, it is not the best way, but, it works. In the end, you should want to get out of this arrangement after one year. It is always easier to manage a business with fixed overhead. AMAP

Not gonna argue with that point...:-P For now as a part-timer still lookin' for a day job I'm hoping for some sort of low overhead arrangement with an established business that would like to add bbq to their menu. :cool: If it doesn't happen...I'll keep doing the private gigs on my own...perhaps one day I'll go with a brick-n-mortar myself. :biggrin:

lazybonesmoke1
12-14-2009, 04:47 PM
Who's going to pay for the waitstaff? Are you going to use his plates, silverware? Who is paying for the dish washer? If all you have to do is cook the que, serve it and count your money then that is not a bad deal. I would start out with 15% of sales and 10% of catering sales though. Then see what happens.

JD McGee
12-14-2009, 05:27 PM
Who's going to pay for the waitstaff? Are you going to use his plates, silverware? Who is paying for the dish washer? If all you have to do is cook the que, serve it and count your money then that is not a bad deal. I would start out with 15% of sales and 10% of catering sales though. Then see what happens.

I will be helping him/her pay for everything with the profits he/she makes from selling my que...:cool:

HBMTN
12-14-2009, 07:13 PM
Not a pro here, but I like the idea of paying the owner rent and him buying Q from you. That way you know what you are up against from the beginning. Could get touchy 1000 ways otherwise. Lots of what if's could happen. Had a friend who is a sherrifs deputy, he came across one of these good deals renting a home frome an elderly couple. The agreement was no rent payment if he would keep the grass cut and a little maintenance he and there. The elderly couple lived on this farm as well, before it was over he was bailing all the hay tending farm animals and even ( no lie ) cutting the old mans toe nails. He would get home at night and the old man had a three page to do list every night.

TN_BBQ
12-14-2009, 07:14 PM
Offer him a little less and see if he'll take it. He'll let you know what the right amount is.

landarc
12-14-2009, 07:22 PM
Hogback, you make a good point, but, this gets to the fact that you should always have a good contract. Always have a good detailed contract. I have seen other folks use the kind of deal JD is talking about, it is not uncommon. Just go slow and make sure you discuss all possibilities.

Oh, JD, up in Humboldt, they have a junior college that has a program for restaurant and food services, and that program has a building that start up food businesses can rent the commercial kitchen on an hourly basis, they even offer a business address and storage space. Just a thought as things evolve, you could look into that.

JD McGee
12-14-2009, 07:35 PM
Not a pro here, but I like the idea of paying the owner rent and him buying Q from you. That way you know what you are up against from the beginning. Could get touchy 1000 ways otherwise. Lots of what if's could happen. Had a friend who is a sherrifs deputy, he came across one of these good deals renting a home frome an elderly couple. The agreement was no rent payment if he would keep the grass cut and a little maintenance he and there. The elderly couple lived on this farm as well, before it was over he was bailing all the hay tending farm animals and even ( no lie ) cutting the old mans toe nails. He would get home at night and the old man had a three page to do list every night.

I don't mind bailing hay...but I draw the line at toenails! :twisted:

Hogback, you make a good point, but, this gets to the fact that you should always have a good contract. Always have a good detailed contract. I have seen other folks use the kind of deal JD is talking about, it is not uncommon. Just go slow and make sure you discuss all possibilities.

Oh, JD, up in Humboldt, they have a junior college that has a program for restaurant and food services, and that program has a building that start up food businesses can rent the commercial kitchen on an hourly basis, they even offer a business address and storage space. Just a thought as things evolve, you could look into that.

Nothing like that around here...(that I'm aware of)...we have a lot of wineries and micro breweries though...and they like to serve good bbq. Steve Raichlen was cooking at one last summer...I'd like to get a few of those gigs! :-P I'm putting together a portfolio of SouthPaw BBQ to hand out to prospective partners...we're talking reputable places here. No dives...I'll leave those for Guy...:wink:

txschutte
12-14-2009, 07:52 PM
If i get my building, I'll let you in for 51%, and you buy the beer....oh, and the pretzels.

JD, you are a good guy and a great BBQ'er. You have 95% of the stuff to do a temp site market (If your HD allows it).

Excite the senses of your future clientele. Wanna know how I got the bars to buy my Q? I gave a free plate from the vending site to the drunkest farker I seen coming out of one, as long as he went back in gnawing on a rib...

I sold 15 rack that night at $18/ea.

Put your face, your BBQ into someone else's face. Cards flyers and evry bulletin board you can find.

And then, get your temp 3 day license and advertise ribs or whatever for 3 days only! Create Hysteria...it works everytime!

Jerk Pit Master
12-14-2009, 07:53 PM
JD, you mention share of profits, but you calculated share of sales. Share of profits covers you better, but calculations can get tricky and sticky.

Here's my take. Offer 10% of all sales for rent For everything else that the owner is throwing in (staffing, utilities, equipment) or doing have him charge you for that. Charges not to exceed another 10% of sales. You maximum outlay is 20% of sales.

Good luck!

JD McGee
12-14-2009, 10:15 PM
If i get my building, I'll let you in for 51%, and you buy the beer....oh, and the pretzels.

JD, you are a good guy and a great BBQ'er. You have 95% of the stuff to do a temp site market (If your HD allows it).

Excite the senses of your future clientele. Wanna know how I got the bars to buy my Q? I gave a free plate from the vending site to the drunkest farker I seen coming out of one, as long as he went back in gnawing on a rib...

I sold 15 rack that night at $18/ea.

Put your face, your BBQ into someone else's face. Cards flyers and evry bulletin board you can find.

And then, get your temp 3 day license and advertise ribs or whatever for 3 days only! Create Hysteria...it works everytime!

Now THERE'S a plan that just might work! :lol:

JD, you mention share of profits, but you calculated share of sales. Share of profits covers you better, but calculations can get tricky and sticky.

Here's my take. Offer 10% of all sales for rent For everything else that the owner is throwing in (staffing, utilities, equipment) or doing have him charge you for that. Charges not to exceed another 10% of sales. You maximum outlay is 20% of sales.

Good luck!

Thanks for brainstorming with me folks...I'm just tossin' out ideas to see what sticks. I'm not used to being idle...(no day job)...once I knock out all my wife's honey-do's I'm gonna be goin' apechit lookin' for something to do. :shock: If I can get in to a decent relationship with a pub or restaurant that would like to add bbq to the menu it would keep me off the streets and out of the unemployment line! :cool:

big blue bbq
12-14-2009, 10:48 PM
JD, I work for a restaurant chain and do all the leasing in our area. When we are going into a place and looking at a percentage rent we do not go past 10% and that should include all electrical and water. If you have to pay those bills it should be more like 6 to 8% and the difference in the bills after you start your business there. Get at least one year of utilities so you can see a good average before you go in and then what it is after you are there. Remember, not only are they helping you get customers, but if it is a bar, you are also going to be driving their customer counts up and also their tickets. The wait staff will make better tips if the customers are getting food to go with the drinks so you should not have to give them anything.
just my two cents worth from doing this for 10 years.

JD McGee
12-14-2009, 11:16 PM
Thanks Larry...I'll keep that in mind if and when I get to a negotiating stage. :-P

tony76248
12-28-2009, 08:11 PM
My thoughts are to give it a test run and see how it works, then go from there. Would this be 7 days a week or just weekends and special events?

Is this gonna be your lone gig or will you still be working another job?

You might also find that having all of your weekends tied up can be a real drag after the fun and excitement wears off.