OT. Question for the people in here who were in the restaurant business.

FatTony · Oct 26, 2006

If you were going to enter into a management agreement as a GM and profit sharing was a stipulation, what would you think is a fair percentage of the profit to expect?

Dante · Oct 26, 2006

If Raiders70021 was still posting he would know this ..the guy owns a Mexican taco restaurant

FatTony · Oct 26, 2006

I know we have a couple of people who were in the business. I believe one of the moderators was.

5teamparlay · Oct 26, 2006

I would go for a lower % of the sales than any % of the profit. Would this be a new or established place as well is a factor. If established you would have prior profit/sales data to go off of.

WISHING_I_WAS_WINNING · Oct 26, 2006

Fat Tony, percentages are based on the total revenue generated by the establishment. The higher the total revenue the less your percentage will be. Be careful as some establishments penalize your percentages based on labor and food costs, (if they are higher than budgeted). Hope this helps

FatTony · Oct 26, 2006

5teamparlay said:
I would go for a lower % of the sales than any % of the profit. Would this be a new or established place as well is a factor. If established you would have prior profit/sales data to go off of.

Can't go by prior sales. It's a group of people taking over a failing business that's only two years old. Restaurant is still being sold for around a million.

FatTony · Oct 26, 2006

WISHING_I_WAS_WINNING said:
Fat Tony, percentages are based on the total revenue generated by the establishment. The higher the total revenue the less your percentage will be. Be careful as some establishments penalize your percentages based on labor and food costs, (if they are higher than budgeted). Hope this helps

That does help. Thanks.

xpanda · Oct 26, 2006

Depends also on what - if any - salary there is to balance it out.

I wouldn't get involved in any kind of commission wage without first having a look at the books, and knowing exactly how much control you have over costs, especially kitchen costs. (I am assuming for now that the commission is based on net profit, not gross sales.)

FatTony · Oct 26, 2006

xpanda said:
Depends also on what - if any - salary there is to balance it out.

I wouldn't get involved in any kind of commission wage without first having a look at the books, and knowing exactly how much control you have over costs, especially kitchen costs. (I am assuming for now that the commission is based on net profit, not gross sales.)

Lets just say I wouldn't be living and dying with the bonus. The salary is solid. Also would have full control of the kitchen costs.

5teamparlay · Oct 26, 2006

It's a group of people taking over a failing business that's only two years old.

I would definitely ask them how they would calculate profit as most businesses of this type (even the best of the best restaurants) wouldn't expect to turn a real profit for years.

WVU · Oct 26, 2006

A new restaurant in a defunct restaurant's place will have a hard time ever showing a profit. The failing business failed for a reason. Most restaurant mangers' bonuses are based on increase in sales over the previous period. Food and labor costs factor in as well. The actual profit a restaurant makes is tough to figure. I wouldn't expect any kind of bonus if it is purely profit based given the situation.

Either way, make sure you cater to the good non-smokers of this world. heh

5teamparlay · Oct 26, 2006

Most restaurant mangers' bonuses are based on increase in sales over the previous period.

Thats what I have seen. Profit may take all start up costs, chairs, paint, plates, menu's, paving the parking lot, advertising. I WOULDN'T MAKE A DEAL LIKE THAT. Make the bonus based on something tangible and concrete that you have a finger on like bottom line sales.

joeyfitzclick · Oct 26, 2006

This restaurant will show a loss for a minimum of three years regardless of sales figures, so any profit sharing or bonus possibilities should be based on gross sales goals achieved ONLY.

You are probably looking at $80K to 100K + 5-10% bonus per year depending on where you live.

Linz_IA · Oct 26, 2006

seriously all i have have to say is the bar business is ROUGH! seriously! it is a nightmare...every fricken day its insane...can't wait to get out!!! *Linz

patswin · Oct 27, 2006

Linz_IA said:
seriously all i have have to say is the bar business is ROUGH! seriously! it is a nightmare...every fricken day its insane...can't wait to get out!!! *Linz

I hear ya Linz, I was a bartender for 10 years at a local bowling alley. Made good cash and enjoyed the job very much. New York passed a no smoking law at all bars and restaurants a few years ago and business dropped off by about 50%. I decided to quit because I was not making enough $$ for the time involved. I did enjoy the smoke free environment but it was no longer worth it to bartend because they were not enough customers anymore

teazeman · Oct 27, 2006

joeyfitzclick said:
This restaurant will show a loss for a minimum of three years regardless of sales

As a restaurant owner i can speak for the validity of the above statement.

OT. Question for the people in here who were in the restaurant business.

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