The bar owner would continue to sell alcohol and take the profits from the alcohol sales. They will not charge us anything except utilities. We would cover all expenses and purchases pertaining to food and take all food profits. Does a 1099 make sense for a situation like this?
Who is collecting the revenue and who is paying who?
From the title it sounds like the bar owner is collecting the revenue and paying the food service person. If that is the case, is the bar owner deducting rent for the space and for utilities?This sounds like a decent situation if the bar has a good crowd. I’m not sure that a 1099 makes much sense here though. The owner isn’t paying you. I’m no expert, but I would just set up a completely separate entity.
I would strongly advise speaking with an accountant so you can get a grasp on the financials and liability on what you are considering.
As a 1099 you personally have all the liability if a customer gets drunk and injured or injures somebody else.
Are they going to handle the money side of things and pay you the food portion?
It’s fine to give you a 1099 in that situation if there’s no LLC or corporate entity on your side.
Debatable if it’s needed but if you’re buying the raw ingredients it’s certainly not a W2 situation.
I’d make sure to think through how you audit their side, who pays for waste - for example if a server drops a plate, or a customer just doesn’t like something, and a whole bunch of other things.
Including whether you can operate as a dark kitchen out the back for delivery under your own name or theirs.
Who pays for your insurance?
This is not a terrible idea. it is basically he wants to subcontract out a part of the business he is terrible at running. and the least profitable for him. and your risk is small. you are not leasing the kitchen? ( many hotels do this and they force operators to pay them to do it ).
As long is you cover your risk and make sure the owner can’t change the terms later. I would have everything spelled out on what you would pay him and how it is determined. if you really start making money, he will want to change terms. just like if you are not making money you will want to get out of the situation. have everything spelled out in a contract.
You should form an LLC or S corp to do this for legal protection (what if you food poison someone or one of your employees gets hurt), which would not be a 1099 arrangement. Plus I think then you would get the 20% pass through deduction.
Have you ever owned or operated a kitchen ? Food is a loss lead into a more profitable item1099?Who pays insurance for the labor?Who pays the food permit to the county?Your pay would come from the profit of the food sold so… 3-7% of food in a best case scenario after waste and errors etc.You wanna do all that work for maybe maybe maaaybe $700 a month in “profit”?
I think its a bum deal but if you don’t have a job I guess it’ll get you by.
This makes you take on too much risk - the real risk is in the bar actually selling the food.
This seems like a shit deal.
Id give it a try. Just make sure you have a limited menu and offer food that can be eaten in a bar atmosphere
Id give it a try. Just make sure you have a limited menu and offer food that can be eaten in a bar atmosphere
Questions:
How much much do utilities cost? If you’re covering the costs for his beer cooler and only get a couple of square feet for your inventory, you need to clarify that.
Likewise, how big IS the kitchen area. It will need to pass health inspection.
Have a good menu and stick to it. One commenter here spoke of fraternal organization that wanted a $9.99 prime rib dinner. No problem. The owner wants that special, he. Has to provide the ingredients at the cost that allows you to hit that price point. Any specials you offer will be based on your own ability to find a deal. Example: Kroger had a BOGO on chicken wings this month. They won’t let you fill your cart, but buy some every day, then Saturday, have a wings special while supplies last.
You’ll have to have someone with a food handlers license there for when you’re away from the place. You should not be expected to run the kitchen from opening to closing 6 or 7 days a week.
The good news, aside from the second cook, that you’ll share cleaning duties with, that’s all the staff you should need. Wait-staff would be the bar personnel and Door dash/GrubHub drivers.
Specifically, and this will be part of your overhead, you want every meal order in writing. Servers to collect upon delivery. This way, the customer doesn’t pass out or forget to pay. Or, like this one group of clowns we had at Big Boy, tuck the tickets in the booth seats. I found over 100 when we remodeled. Regardless, you’ll need one of those “ticket spears” for the owner to put paid tickets ob at the end of the night. I suggest you provide NCR ticket books for the servers so you can see that you’re getting reimbursed for all the orders. Also, to make sure they’re charging correctly.
You will need to carry insurance for your protection, as well as a business license.
Questions:
How much much do utilities cost? If you’re covering the costs for his beer cooler and only get a couple of square feet for your inventory, you need to clarify that.
Likewise, how big IS the kitchen area. It will need to pass health inspection.
Have a good menu and stick to it. One commenter here spoke of fraternal organization that wanted a $9.99 prime rib dinner. No problem. The owner wants that special, he. Has to provide the ingredients at the cost that allows you to hit that price point. Any specials you offer will be based on your own ability to find a deal. Example: Kroger had a BOGO on chicken wings this month. They won’t let you fill your cart, but buy some every day, then Saturday, have a wings special while supplies last.
You’ll have to have someone with a food handlers license there for when you’re away from the place. You should not be expected to run the kitchen from opening to closing 6 or 7 days a week.
The good news, aside from the second cook, that you’ll share cleaning duties with, that’s all the staff you should need. Wait-staff would be the bar personnel and Door dash/GrubHub drivers.
Specifically, and this will be part of your overhead, you want every meal order in writing. Servers to collect upon delivery. This way, the customer doesn’t pass out or forget to pay. Or, like this one group of clowns we had at Big Boy, tuck the tickets in the booth seats. I found over 100 when we remodeled. Regardless, you’ll need one of those “ticket spears” for the owner to put paid tickets ob at the end of the night. I suggest you provide NCR ticket books for the servers so you can see that you’re getting reimbursed for all the orders. Also, to make sure they’re charging correctly.
You will need to carry insurance for your protection, as well as a business license.