In general, a business plan enables organizations to predict procedures, market expectations, legal environment and resources required in starting and operating successfully. In particular, Homeland Restaurant (HR) is a startup that will be located along Cherry Road in Fort Worth, Texas and, run as a general partnership between Brian Thompson and James Raines. However, to operate without interruptions, Thompson and Raines need to comply with the United States employment laws and, Texas taxation requirements, business regulations and zoning requirements. Also, they need to acquire insurance covers to get protected against possible torts and criminal liability. More fundamentally, HR should maintain employee motivation and customer satisfaction as competitive techniques. Based on the background, this essay discusses the Homeland Restaurant business plan.
As the location section indicates, Homeland Restaurant will be located around the Dallas/Fort Worth International Airport (DFW). Thus, the management intends to provide food with a global cultural orientation. Therefore, HR will have types of food consumed not only in America but also in other regions of the world. Some popular types of food that the restaurant will be offering encompass hamburger, fried chicken, pizza, fried fish, meatloaf, sausages, hot dog, chili, baked potato, different types of barbecue, American-Chinese cuisine, and spicy chicken sandwich. In addition to food, the management intends to provide different non-alcoholic beverages like tea, coffee, and soft drinks. Also, since HR is still in the introduction stage, the administration plans to implement some services that can boost customer satisfaction. For example, it has so far laid a plan to establish delivery services for customers who may place orders. Ideally, like other places in the world, the American restaurant sector is highly fragmented (Cunningham & Harney, 2012). Unfortunately, fragmentation comes along with the intensification of the competitive rivalry and higher purchasing power of buyers (Cunningham & Harney, 2012). Thus, delivery services will be more of a competitive technique. Besides, the management has set in place systems for playing popular music from all over the world. In essence, managers understand that success in the restaurant industry requires a firm to differentiate itself from competitors.
Legal Form of Homeland Restaurant
Homeland Restaurant has been established as a general partnership between Brian Thompson and James Raines. Typically, a general partnership comes about when two or more investors agree to pool money, labor, skills, and other business resources to commence business (Skripak, 2016). The term general partnership implies that partners share profits and losses equally (Skripak, 2016). Also, partners in the general partnership form of the business unit have equal power regarding the management of the company. They are also equally liable for any debts that the company incurs during the introduction phase and over the course of its lifecycle. In most cases, general partners compile formal terms of partnership in a written agreement.
Notably, Thompson and Raines preferred general partnership because it can facilitate success in several ways. Some partners can enable the business to take risks it would not have attempted under sole proprietorship (Skripak, 2016). Apart from this consideration, a general partnership benefits business owners in multiple ways. For instance, the structure is simple to form. Usually, a general partnership does not necessitate complex procedures since it is an agreement between two investors, who compared to the case of corporations, can resolve conflicts of interest quicker and start the business. Also, once established, the general partnership can operate in several states without requiring registration for new permits. In overall, this type of business structure does not face strict regulations apart from a few requirements related to the hygiene and food safety. For instance, Texas law where Homeland Restaurant intends to operate, allows investors to form general partnerships by oral agreement.
Moreover, the structure of a general partnership is simple to operate (Skripak, 2016). Since it is an agreement between two people, the general partnership is unlikely to encounter problems related to decision making since each of the partnering individuals strives to ensure that the business operates optimally. In a similar vein, a general partnership enjoys a constant flow of personal income. Ideally, general partners acquire profits of the company as personal incomes. This shield the general partnership from business taxes, thereby increasing its profitability. Thus, a general partnership can suit business at the startup phase like HR due to financial constraints associated with the stage.
Further, a general partnership provides flexibility regarding profit sharing, losses and other operational aspects (Skripak, 2016). Notably, unlike limited partnerships, general partnerships do not dictate, which partners should gain more profits or incur more losses. Instead, partners agree for equal sharing. However, if the business struggles at some point, each of the partners are willing to dedicate resources massively to enhance success. Also, compared to a sole proprietorship, the general partnership stands a better chance of developing better management. The partnering individuals are likely to have different skills, experience, educational level, leadership traits, and social skills. Therefore, the diversity that accompanies general partnership enables the company to develop outstanding management attributes. Lastly, if conflicts arise in the management, the two partners can readily agree on the way forward and prevent adverse impacts on operations.
Nevertheless, a general partnership may disadvantage owners in some perspectives. To begin with, it suffers from little protection, and thus partners in the general structure incur all business debts and bear any legal issues that may arise during operations (Skripak, 2016). Technically, the general partnership does not provide formal legal protection, which is only applicable to businesses operating as separate legal entities. Generally, companies encounter risks and unanticipated events at some point of operation. Thus, due to the lack of legal protection, general partnerships leave business owners at increased vulnerability to adverse events.
Moreover, a general partnership is somehow informal since it does not develop a clear structure of operation. In some cases, general partnerships exist as oral agreements between investors, which does not formally establish roles and position of each partner. Although in some other instances general partners share managerial responsibilities, if one partner makes wrong decisions, the other one also bears consequences. Also, unlike sole proprietorships, an investor in the general partnership can only transfer business funds after consulting the other partner. Further, general partnerships are always unstable since if one partner withdraws from the entity, the business is likely to cease operations. Unfortunately, dissolution in the general partnership can occur informally, making the business somehow a short-term endeavor.
Officers and Duties
The management/Owners- Brian Thompson and James Raines are owners of Homeland Restaurant. They will also run all management activities such as organizing and coordinating employees for at least five years of operation.
Waiters/waitresses will serve in welcoming customers, taking food orders, serving food and drinks, and taking payments.
Preparation cooks-These officers will be responsible for preparatory activities like cleaning and other functions that support chefs’ activities. The business will also have a driver for delivering Pizzas to retailers and residential areas. The restaurant also plans to have a meat cutter responsible for preparing meat on order. Also, there will be chefs for baking, cooking and coordinating delivery. Moreover, the management has located the position of a shift leader/ a certified food manager for organizing daily routines and interacting with clients to boost their experience and satisfaction. Also, dishwashers will be employed primarily for cleaning utensils. Lastly, Homeland Restaurant will have a food cashier who informs customers concerning their bill and various available payment methods such as cash and credit card. Cashiers also take payments and provide changes. Nonetheless, the food cashier at Homeland Restaurant will also be welcoming clients and informing customers concerning special deals offered by the restaurant.
Costs that the General Partners Will Incur
General partnerships in Texas do not require substantial starting costs. However, partners must pay about $25 for filing the assumed name status. Other related charges include purchasing equipment, insurance cover, and raw materials. Also, a restaurant incurs expenses associated with the payment of utilities, rental fee, purchase of utensils and raw materials and brand promotions during the launch of the restaurant, which amounts to $200,000. In total, general partners of Homeland Restaurant might incur at least $402,000.
Government Laws and Requirements
The US Department of Health and Human Resources has a list of dietary requirements that guide Americans on how to achieve nutrition (Kambhampati, Shioda, Gould, Sharp, Brown, Parashar & Hall, 2016). Consequently, the increased awareness can limit HR’s customer base if it does not meet the recommended dietary standards. The Food and Drug Administration can impact Homeland Restaurant since it primarily serves to promote public health. Typically, FDA requires retailers to provide food that is nutritional and free from health hazards (Kambhampati et al., 2016). Also, in the recent years, the Congress has developed new restaurant tax laws such as the 15-year depreciation tax and other deductions.
Moreover, the US government requires businesses to prevent food and water wastage. Additionally, HR will follow the guidelines of labor laws. The Fair Labor Standards Act, for example, requires both the public and private sector to at least pay workers according to the federal minimum set compensation standards. Also, the Family and Medical Leave Act requires employers to extend the leave of an employee who is sick, giving birth or adopting a child and caring for the critically ill family member. Other employment laws prohibit employers from initiating any form of workplace discrimination. Moreover, all restaurant operators should develop recommended employee cleanliness standards, report any employee with chronic illness, purchase utensils that are safe to use and have ventilation and pleasant room temperature (Kambhampati et al., 2016). Specific activities involved in promoting cleanliness entail availing bathroom for workers and hand-washing sink with hot and cold water.
Generally, most municipalities in America have zoning laws to manage land use. In Texas mainly, a new business like Homeland Restaurant should be keen not to trespass public lands. Also, it should comply with the set requirements for protecting public health, societal welfare, and morality (Smith, 2010). For example, the restaurant must use chimneys that reduce emissions to prevent air pollution.
Homeland Restaurant will be located in a major traffic area along Cherry Road in Fort Worth, Texas. According to the 2010 census, the area population exceeds 51,000. Also, most of the households in the area belong to the middle-class earning about $46,532. Hence, the target population has a purchasing power to maintain the restaurant’s earnings. Besides, partners chose this area due to its proximity to DFW international airport, which will likely supply tourists and global travelers. Lastly, the city is significantly connected by transportation infrastructure to promotes its accessibility.
Business License Requirements and Costs
Generally, to open a business anywhere in the United States, operators must obtain a business license, which apart from the actual cost, it necessitates $50 for registration. Also, any food establishment in Texas is subject to some permits. Texas law requires restaurant operators to acquire a Retail Food Establishment Permit (RFEP) and display it at premises. However, the state law of Texas requires restaurants to have at least a certified food manager before applying for RFEP. Additionally, Homeland Restaurant will have to obtain a sales tax permit from Texas Controller’s Office or online channels. To get a sales tax permit, general partners should provide names and federal tax ID numbers. Also, the restaurant should obtain facilities permit since Texas state law requires all restaurant operators to have physical facilities approved before commencing the business. In Texas, the permit can be obtained from the local government concerned with zoning and construction regulation. Ideally, even when there is no construction like in the case of HR, facilities must undergo inspection. Collectively, restaurant license and permits cost about $6,000.
Like any other business, owners of Homeland Restaurant will get protected against some unforeseen events. In particular, the restaurant should have general liability insurance that covers business lawsuits related to advertising malpractices, slip-and-fall accidents, and illnesses that occur after customers eat or purchase food from the restaurant and property damage (Godsmark, Garvey, Dismore & Dismore, 2011). In most cases, general liability insurance costs between $1,170 and $3,780. Moreover, the restaurant should obtain commercial property insurance that covers premises, furniture, and kitchen equipment. In this case, owners will have catered for windstorms, fire, theft and other risks related to commercial properties. Besides, Homeland Restaurant should obtain workers’ compensation insurance, which compensates employees who get injured or contract illnesses in the course of duty (Godsmark et al., 2011). The premium for workers’ compensation insurance lies between $636 and $9,730. Also, since HR will have a delivery van, it will need to obtain commercial vehicle insurance to cover vehicle-related accidents and injuries (Godsmark et al., 2011). Notably, this insurance can be merged with the general liability insurance. Available insurance firms in Texas include Village Insurance Agency and Thumann Agency. Although purchasing bonds can serve in the times of financial constraints, it is not mandatory in restaurants and other small business enterprises.
In the age of stiff competition, most industries apply proprietary rights to prevent business malpractices. In restaurants, operators can apply for copyrights to protect recipes unique to that business (Bouchoux, 2018). However, copyrights in the restaurant industry may be ineffective if a competitor changes the format of the written recipe or uses it without rewriting the exact copy. However, trademarks can enable owners of Homeland Restaurant to have the rights to renowned dishes, the restaurant’s logo, menu items and food formulas (Bouchoux, 2018). In essence, trademarks protect a restaurant from competitors applying to get competing names. Also, although patent rights are applicable in larger food companies, owners of HR should obtain patents if they invent new food preparation formulas and any other original idea for protection against public disclosures.
Employment Law and Requirements
Homeland Restaurant should comply with discrimination laws. For example, it needs to fulfill the requirements of the Americans with Disabilities Act by preventing discrimination of employees with disabilities and providing reasonable accommodation for such people (Lieberwitz, 2008). Also, HR should employ both the youth and veteran restaurant officers to comply with the 1967 Age Discrimination in Employment Act (Lieberwitz, 2008). On the same note, the United States outlaws any form of discrimination. Thus, the law requires business management to implement procedures and policies for prohibiting offensive jokes, physical assaults, insults or the display of offensive tools, and sexual harassment (Lieberwitz, 2008). Moreover, the law requires business owners to adopt the merit-based recruitment methods, including background checks. Other legal requirements include paying employees with similar qualifications and work conditions equally, providing medical leaves and reasonable minimum wages (Lieberwitz, 2008).
Employees vs. Independent Contractors
Homeland Restaurant chose full-time employees since they facilitate long-term growth compared to independent contractors. Ideally, employees can multitask, build a customer relationship, be trained conveniently and have the commitment to enable business success. Contrastingly, independent contractors are only concerned about maintaining the relationship with the business, but not its performance.
Homeland Restaurant will be paying Texas sales tax imposed on ready-to-eat food and reusable equipment like bread machines, charbroilers, griddles, hot dog cookers, microwave ovens, and toasters.
Purchase Orders and Contracts
Typically, Homeland Restaurant should prefer contract purchase orders where owners and the contractor agree on the amount, quality and price of raw materials (Plimpton & Recorded Books, 2007). Here, the management should forecast materials that the restaurant will require within a given timeframe and identify a supplier who can provide all that continuously. The purchase order has corresponding penalties for breach of the agreement, and therefore, it protects businesses from potential failures like late delivery and poor quality. Also, although owners of Homeland Restaurant plan to perform most activities within the restaurant premises, it may need to outsource the construction of equipment such as dining tables, seats and other furniture. Here, owners should prefer the fixed-fee agreement where they will pay the total cost for the whole process. If the work exceeds the specified time, the vendor must complete as there are no extra costs for tasks not included in the scope. Therefore, the fixed-fee agreement is somehow cheaper compared to a rate-based contract where the vendor charges the outsourcer according to hours and the volume of materials used. Thus, in the rate-based contracting, a vendor can add unnecessary costs. Apart from the fixed-fee agreement, Homeland Restaurant intends to embark on written contracts whenever there are activities to be performed by outside parties. Unlike verbal contracts, written contracts specify terms of the agreement and reduce the possibility of disputes during payments, and ensure that the contractor remains committed to specified quality and timeframe.
Torts and Crime Protection
As indicated earlier, restaurant operators are liable for injuries that customers face after eating, slipping on uneven pavement and filthy food, especially if they do not place warning signs on such areas (Godsmark et al., 2011). Also, if employees incur injuries due to spilled food and beverages, or other hazards resulting from the operation of the restaurant, owners will be criminally liable. Besides, if the management does not set policies to prohibit employees from taking alcohol or substances or if a drunkard worker assaults other employees, then owners will be held liable.
Property and Requirements
Notably, Homeland Restaurant will require freezers and refrigerators to preserve freshness and, cool food items and prevent them from spoilage. It will also need food preparation counters like preparation tables and cutting surfaces. Slicers, mixers, food processors like buffalo chopper and batch bowl, ranges, ovens, sinks, utensils and safety equipment will also be required. Besides, HR will have dining tables and seats for hosting customers. Also, it must have at least four computers, one at the cashier desk, another one at the shift leader and the other two at the management’s office. In the meantime, owners are planning to rent premises before they complete the ongoing construction. Rental houses are significant in cases where businesses do not have time to construct their premises.
The Uniform Commercial Code (UCC) and Other Considerations
To meet UCC requirements, Homeland Restaurant should offer products that meet minimum customer expectations (Plimpton & Recorded Books, 2007). The restaurant will also endeavor to operate strictly under the rule of law when engaging in contracts, recruiting and operating. In essence, only strict adherence to business licenses, employment laws, labor standards, and ethical principles can enhance compliance with UCC. The course also has important details for starting, operating and closing a business. For example, the course indicates that business owners must undertake market research to determine the feasibility of the company. Also, they need to adopt employee motivation tools to maintain quality and consistency in performance. In the closing stage, general partners should put dissolution procedures in writing to formalize the winding up of business affairs.
The planned Homeland Restaurant will need to put procedures for complying with the United States’ employment laws and, Texas taxation and zoning requirements. Besides, it should maintain standards for cleanliness and workplace safety to prevent lawsuits against tort and criminal liability. Also, being a startup, it needs to leverage on competitive actions such as the provision of quality food items and delivery services. Also, it should work on acquiring copyrights, trademarks, and patents to protect its recipes and food formulas from public disclosures.
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Cunningham, J., & Harney, B. (2012). Strategy & strategists. Oxford: Oxford University Press.
Godsmark, C., Garvey, M., Dismore, H., & Dismore, A. G. (2011). Starting and Running a Restaurant For Dummies, UK Edition. Hoboken: Wiley.
Kambhampati, A., Shioda, K., Gould, L. H., Sharp, D., Brown, L. G., Parashar, U. D., & Hall, A. J. (2016). A State-by-State Assessment of Food Service Regulations for Prevention of Norovirus Outbreaks. Journal of food protection, 79(9), 1527-1536. doi:10.4315/0362-028X.JFP-16-088
Lieberwitz, R. (2008). Employment Discrimination Law in the United States: On the Road to Equality. New Developments in Employment Discrimination Law, Bulletin of Comparative Labor Relations, 68.
Plimpton, L., & Recorded Books, Inc. (2007). Business Contracts: Turn Any Business Contract To Your Advantage. Irvine, Calif.: Entrepreneur Press.
Skripak, S. J. (2016). Fundamentals of Business. Virginia Tech.pp.113-134.
Smith, G. P. (2010). Regulating morality through the common law and exclusionary zoning. Cath. UL Rev., 60, 403.