What Is a Restaurant Contract?

It is an enforceable agreement between two or more parties in which one of them is a restaurant and the other is another company, organization, or individual. Meanwhile, one party will offer their services and the other accepts them. Verbal agreement and handshakes are not enough for the contract to be true and enforceable, that’s why a contract should be present when it comes to formal and legal agreements. Depending on the situation or purpose, the duration of the contract should be agreed upon by both parties. Moreover, signatures from both parties serve as proof that they agreed to the terms written in the contract.

As been said before, Mcdonald’s has been one of the most famous restaurants that people visit. In fact, it has been the leading chain restaurant in terms of sales in the United States in 2019 with average sales of 40.41 billion U.S. dollars according to Statista. However, due to the Covid-19, global sales of Mcdonald’s have been greatly affected and declining 23.9% of sales as of the second quarter as reported in Mcdonald’s Corporate. Restaurants need to get back to business any day now, or otherwise, all employees, suppliers, and others that are connected directly to the business will go down. That is why there are new contracts have been made to ensure the businesses follow the safety protocols.

Types of Contracts for Restaurants

Running your restaurant business will require you to learn more about your business. There are types of contracts that you will need to consider. These below are a few examples of contracts that might be needed for your restaurant.

Equipment: Running a restaurant will definitely need a set of equipment as it mostly depends on them. Restaurant owners need to reassure the sets of equipment are all set and purchased. However, some larger pieces of equipment are costly that the business still cannot purchase them. Owners will have to depend on a lease or payment plan contract to fully owned the required equipment. Few examples of equipment under this are ovens, commercial refrigeration units, slicers, and industrial dishwashers.Employment: A restaurant employee contract is one of the most common contracts when it comes to business. You need employees obviously to run your business, otherwise, it will be hard for you to work alone especially during rush hours. There are some terms that you want to highlight for your employee to know and agree to that will be written in the contract. Both parties which are the employee and the employer should sign the legal contract to provide proof as you both agreed on the terms. According to Statista, the number of people in the United States employed in the restaurant industry in 2020 reached 11.26 million whereas 2.23 million had been decreased from the previous year. Due to that, there will be a high chance for you to employ more crews for your restaurant. Consider taking advantage of an employment agreement template on our site which will bring great help for you.Cleaning: Your restaurant will also need sanitization for your customers’ satisfaction and health regulations. Cleanliness and orderliness to your restaurant are the most important factor when running a restaurant business. The opposite of that will lead your employees and customers to illness and in a worst-case scenario, your business will go down. However, the most effective solution for that is to keep your restaurant healthy by contracting cleaning services. They will ensure that your tablecloths, aprons, table napkins, uniforms, and such will be laundered. Additionally, they will make sure to keep your restaurant swept, vacuumed, and sanitized, in short, clean. Just make sure to revise your contract according to your needs. Other Suppliers: This contract is also the most important for your restaurant business. Your restaurant needs to have supplies that you will be needing to serve your customers with satisfaction. This includes the goods, drinks, tissues, table napkins, to-go boxes, and more. To keep your inventory stocked, you will need to contact some suppliers and negotiate with them. Suppliers are the ones who will help you deliver the products needed for your restaurant. Each supplier has different products to offer, so make sure to contact more depending on the product. Make sure to list down the products that you want to keep in stock.Franchise: Franchising a business will need a contract the most that imply strict guidelines for operations. Franchise means that the franchisor or the owner of the company will authorize the franchisee to operate another business using the franchisor’s intellectual property, systems, and brand. This will also increase your sales as the franchises will help you gain more. Franchise agreements usually last 10–20 years and after that, the franchise will be renewed. Often the franchise will be automatically renewed for another term unless either party gives notice of non-renewal. The leading food chain restaurant Mcdonald’s has reached 13,837 units in 2019 in the United States as reported in Statista. The number shows that many have made deals to be authorized to operate the franchises of Mcdonald’s. If there is someone who wants a franchise of your business, you should prepare a contract for that.Marketing: A restaurant will not easily gain more customers just by running it unannounced to the public. Bringing in new customers and maintaining existing customers are based on how much effort you promote your business to the public. Contracting advertising services will help you attract more customers to visit your restaurant. Advertising in print media, radios, televisions, and social media will make sure that your business still runs. Although, advertising your business will cost you money. Advertising your business will not only bring more customers to dine in, but it can also bring clients to appoint you to be their caterers for their big or private events. Catering a program can also bring you more opportunities to grow your business. See also our catering contract and event planner contract that you might need someday.

These types of contracts will satisfy your needs for your restaurant business which can also bring satisfaction to your customers. Due to that fact, it will bring you repeated guests, more reservations, private dinings, and investors which will make your business grow more. These few examples of contracts will not only end up here but there are also more of them that exist. If you want to make your own contract, we also provide you a step-by-step guide and tips for you on how to make one.

How to Make a Restaurant Contract?

Making a contract is not as easy as it looks. You still have to make it through the process. There are also things you need to prepare which are your editing tools and such. Editing tools are application software that you can edit or write your documents such as Microsoft Word. Apart from that, you, yourself should also prepare for the negotiation with the other parties. 

Step 1: Discussion of Both Parties

The first thing you need to do is to identify first your purpose or who the other party is. Prepare the things needed for making your contract. Schedule a meeting or an appointment with the other party to discuss the terms and conditions. If the schedule is agreed upon by both parties, make sure to arrive on time. Before starting the meeting, make sure to greet with a handshake. Write down the things you discussed or record them to focus more on interacting with the other party without worrying much about remembering your discussions later on. Depending on the purpose, there are things you need to remember to discuss during the meeting especially for the suppliers which are the schedule, services included, and the payment. After the meeting, greet them goodbye and with a handshake. 

Step 2: Start Writing Them Down

If you record the whole meeting, write the important details discussed at home or let someone do it for you which can be your employee or your secretary if you have any. Bring out your editing tools and start making your contract. You can also download a ready-made template for making it easier for you to make it with ease. The templates contain a set of terms and conditions that you can choose among them which to delete, edit a little, or add some more necessary details that are not yet written. Leave some space for the signature at the end of the contract.

Step 3: Keep It Simple

Designing your contract is not necessary and it can only make it unprofessional. Moreover, some fancy and legalese words are also very unnecessary. It can make your contract vaguer. Keep it simple and professional as it is. Make sure also to organize the terms accordingly. You don’t want the other party to misunderstand what’s written in the contract or it might cause arguments. Highlighting essential words or phrases can also help the readers to understand more clearly. Use bold, italic, or underline to highlight. Changing the font color is very not necessary and unprofessional. There is also a highlighter tool that you can use freely in some editing software applications. 

Step 4: Take One Last Look

Recheck your work on the contract to make sure everything is clear and easy to understand. If there are some errors or mistakes made, make sure to deal with them immediately. If none, then proceed printing copies of them. One copy for each party. Afterward, sign the contract at the signature sections as proof that you agreed with the terms written. If necessary, you can also initial each page to ensure that the signatories have consulted and validated all the pages of the contract. It can also mean to make sure the parties involved in the contract cannot add more pages or modify some parts after signing or initialing the contract. Make the other parties do the same as well. Another thing, make sure that if there are some changes you or the other party wants to make, inform each other and edit the contract immediately. 

Step 5: Update the Contract from Time to Time

Most contracts have their expirations written along with the terms. Make sure to check their period of effectiveness and put it in your calendar if necessary. If it expires, you can opt to renew the contract or provide notice of non-renewal. Renewing the contract means you still want their services to last longer. If you do not need their services anymore, you will need to send them a notice of non-renewal to inform them beforehand. If you found other services that offer better or if you need to cut off some of them due to some reasons, you can opt to terminate the contract of the current one. Apart from that, you can also make adjustments to the number of products for the suppliers to deliver if necessary. Just make sure to send them a notification to keep them posted. 

Importance of a Contract

Contracts are important when there is a two or more parties agreement as it shows proof that all parties agreed on the terms and conditions written on the contract. Contracts are enforceable by law so if one breaks the agreement, the other can file a case to the lawsuit which is not a piece of good news. Moreover, it is also to provide clear statements about each parties’ duties, responsibilities, rights, and benefits. However, the contracts must be legal.


What are the terms and conditions of a restaurant contract?

Terms and conditions of a restaurant contract can be anything that must be agreed upon by the parties involved in the contract. They also act as rules for all parties to follow in which the responsibilities, benefits, and rights are included.

How to make an employment contract for your restaurant business?

Making an employment contract is the same as you are making one for any company or business. You only need to write the terms and conditions for your employee to follow to keep your restaurant in order. The terms must include their specified duties and assignments, commissions, schedule. and responsibilities.

When to use a restaurant private contract form?

A restaurant’s private contract form is often used when there are some private events or private dinings.

What are the 6 elements of a contract?

A contract must be composed of these six essential elements before binding: The offer which is the first step and the promise of one party and the other pays for it; The acceptance is when the other party accepts the offer made by the other; Mutual assent is also known as the “meeting of the minds”, the combination of the offer and acceptance, and the key element of a contract; Consideration is often called the trade or exchange which serves as the payment of the other party; Capacity is the consideration of the ability to understand the terms clearly, and; Legality is the most important one to consider which the contract must strictly follow the legal law. The contract is voided if one party is a minor, a person with a disability, and influenced by drugs. Apart from those, a contract that contains drugs, crime, or theft will also be voided and punishable by law.

Running a restaurant is not as easy as it seems and it will require you more knowledge on how to keep your business going. You will also need to consider a lot of things including making the contracts. That is why we are here to help you to lessen your problems by providing you with the finest ready-made templates that you can use anytime and anywhere. Someday, all your hard work will pay off and there will partnerships that will come to you. Maybe someday, you will be on the top ranking of the food chain industry. Who knows? Listen also to your customers’ feedbacks and advice for you to make your restaurant business grow more and fulfill their satisfaction. There are also other contracts aside from restaurant contracts that you might need such as real estate, schools, and many more.