You and two friends, Pat and Ron, have decided to form a new business, running a restaurant. Your friends, pat and Ron, bring the following to the business: Pat is something of an entrepreneur. He has several ventures and ready access to financing for your business. Because of his varied interests, however, he doesn’t want to be an employee of the business. He does, however, want to have some input into the management of the business. Ron has a full time job, which she is willing to leave to make a full time commitment to running this restaurant. She has limited funds available and hopes to develop “sweat equity” in the restaurant through her work effort. She is a skilled chef who will manage the kitchen and the food production. You are the “idea person”. You have conceived of this enterprise, and are charged with getting everything lined up. You will be involved in the day-to-day running of things, and will be the manager of the business side of the restaurant.

I. You need to decide the form of the business and explain why you chose that form. (Based upon what you learned in Business Law 1)

II. Having chosen the form of business, you also need to arrange financing to obtain all of the kitchen equipment, dining room equipment, stock the bar, purchase food, pay rent, get operating capital for the first two months of operation, and a million other details. Pat arranges through his/her sources to get financing. The lender requires that you do whatever is necessary to minimize his risk and each of the three of you to be responsible for the loan. What are the options, which ones are best, and how do they work?

III. You also need to have sources for food, drink, etc.(suppliers). What are the options for obtaining these supplies, which ones are best, and how do they work? Do you need written contracts? Why? If you run into problems with your suppliers, what are your remedies? Do they depend upon the options you chose when you began your relationship with them? Why?