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Texas Restaurant Law

How To Deal With Restaurant Partner Disputes

Posted in Commentary, Contracts, Corporate Entity, Franchises, Franchising, Liability, Litigation, Negotiation

There are many motivations for restaurant creation and investment. However, these different desires can lead to conflict, so how are restaurant operators, owners, and investors supposed to resolve these conflicts? This post answers that question, and it gives a game plan to operators, owners, and investors to deal with these inevitable conflicts.

Step One: Avoid The Conflict By Identifying Motivators and Doing Your Homework

The best way to deal with a conflict is to ensure that it never happens in the first place. We have written several posts about when to bring on a partner (click here for link) and avoiding partnership mistakes (click here for link). Use these tools and advice to ensure that it is the right time to bring on a partner, that it is the right partner, and that the structure of the partnership is correct.

Aside from these strategies, you can also ensure that everyone understands each other by initially identifying the motivation of all of the other partners. If one partner is motivated by greed while the other partner is motivated by the challenge, they need to know and agree on that up front. They also need to identify and agree on the restaurant’s goals and the timing of those goals at the beginning of the partnership. If not, partners could face a high likelihood of conflict.

Step Two: Open The Lines Of Communication

Assuming that you have not been able to avoid the conflict in Step One, the next step is to ensure that everyone is communicating. You also need to communicate in a constructive way. Yelling is a great way to express yourself, but it is not generally going to bring the parties to an agreement on a dispute.

This might be a “duh” moment for many people, but it is a huge issue. Many people become so wrapped up in the problem that they fail to talk about it or they talk about it poorly. Neither option will produce good results in a dispute.

If you can talk constructively about the issue, it can save you a lot of time and money.

Step Three: Stand Up For Yourself And Your Rights (But Don’t Lose Your Cool)

Assuming that you could not avoid the conflict and communication has now broken down, it is time to bring in a third-party to resolve the dispute. This does not have to be an attorney. Any person that both parties trust may be able to act as a good mediator to bring the parties back to being able to communicate and resolve the dispute. Of course, failing that, you may need to bring in an attorney to at least present your position in a legally supportable format, which may be the only way to resolve the dispute.

Ultimately, whether you can resolve the dispute on your own or if you have to hire or involve a third-party, it is vital that you keep your cool. Instinctive reactions can often lead to disastrous and costly mistakes, so consider the dispute, the other side, and the value of the dispute before you take action. This can often lead to success in the face of what may seem a monumental dispute.

About the author: Matthew Sanderson is a restaurant lawyer in Texas. “Good service with a smile” is his motto. Click here to find out more about Matthew Sanderson’s legal practice and how he can help you today. Follow him on Twitter @dealattorney.

  • http://twitter.com/Alan_Fowler Alan Fowler

    Great advice for any restauranteur to balancing the emotions, the legal framework, and the partners’ relationship for a positive resolution.