Restaurant Law Blog

Monday, January 15, 2018

Announcement & Special Offer


Dear Clients, Colleagues and Friends:

I have the great pleasure of announcing that as of January 1, 2018, the DiPasquale Law Group has joined with Kimberly A. Summers of Summers and Schneider, P.C.  This newly formed hospitality law firm, DiPasquale & Summers, LLP, will be a true combination of equals, bringing together attorneys recognized for their corporate and regulatory expertise, as well as their sophisticated litigation and transactional practices. 

The practice will remain dedicated to providing full service support and advice to business and restaurant owners in every stage of the hospitality industry.
Read more . . .


Monday, January 15, 2018

Crowdfunding; Multiple Investors and Commercial Real Estate Lease Issues


The concept of investing using an internet crowdfunding model is a fairly recent development and commercial leases often are behind the curve.  A business owner planning to raise capital through an online equity crowdfunding platform would be prudent to pay close attention to restrictions that are often contained in the assignment provision of its commercial lease agreement.  Generally, clauses governing a tenant’s right to assign or sublet are some of the most detailed, complex and extensively negotiated provisions of a commercial lease, partly due to the fact that a tenant’s covenant that it will not assign its lease cannot be implied.  Landlords who want to maintain control over the identity of their commercial tenant, are therefore expected to include within the lease explicit language restricting those types of transfers which cannot be performed without first obtaining landlord’s written consent. Additionally, because New York courts disfavor assignment prohibitions, viewing them as a restraint on alienation, clauses intended to restrict lease transfers must be clear and precise in order to pass judicial scrutiny.
Read more . . .


Sunday, January 14, 2018

Crowdfunding; Multiple Investors and New York State Liquor Authority Disclosure Issues


Crowdfunding is becoming an increasingly popular way for business owners to gain the financial backing they need to turn their concepts into realities. In recent years, websites like kickstarter.com have helped thousands of entrepreneurs obtain access to the funds they needed to get their projects off the ground. With the internet age upon us, the ability to reach people, and beg them for a few dollars, is easier than ever. However, would-be restaurateurs have not been as successful as other small business owners seeking financial backing in these arenas.
Read more . . .


Tuesday, February 7, 2017

Why Lawyers Kill Commercial Real Estate Deals and How to Spot a Bad Deal in Advance

Free Seminar:  Why Lawyers Kill Commercial Real Estate Deals and How to Spot a Bad Deal in Advance
When:  Wednesday, March 15, 2017 from 5:30pm – 7:00pm
Where:  NYC Small Business Solutions, 110 William Street, New York, NY (7th Floor Boardroom)
Seminar Description: Are you tired of spending countless hours showing a property and negotiating a deal, only to have lawyers get involved and kill the transaction?  How can this be avoided?  This seminar is designed to assist commercial real estate brokers identify problematic deal terms before their time is wasted.  The seminar will focus on:

  • Is your ‘non-binding’ letter of intent actually binding?
  • How to properly structure a letter of intent for various transactions (e.g. sale, lease, investment)
  • Identifying hidden lease expenses (i.e.

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Wednesday, August 17, 2016

You may be the owner of an illegal and accidental franchise and not even know it.

Beware:  If you own more than one restaurant which operates under the same name, you may have created an illegal and unintended franchise.

This sounds crazy, but it is actually very common and the consequences of creating an unintended franchise are substantial, serious, and include the possibility of both personal and criminal liability.  Many well-intentioned operators have tried to avoid the franchise tag by referring to their business relationships and partnerships as a “license,” or a “capital investment,” but the label placed on a relationship has little bearing on whether or not the relationship constitutes a franchise.

Would the same operators have pursued a different path if they had known that their mistake could result in the rescission of every one of their business transactions and the filing of criminal charges against them? It is a felony to sell a franchise without complying with both State and Federal law, and the respective agencies have the power to shut down your restaurants, freeze your bank accounts, order restitution, prevent an operator from opening new locations, impose huge penalties, award attorney’ fees to all injured parties, and rescind every one of the offender’s agreements under claim of fraud.  And, to top it off, claiming that they relied on the advice of their attorney will not help since franchise statutes impose strict liability, meaning that an owner’s intent or knowledge of the law (or lack thereof) is irrelevant.



Read more . . .


Thursday, August 11, 2016

Free Seminars: Legal Considerations when opening a bar or restaurant. Restaurant Management Boot Camp 2.0

When:   

Downtown Location:  September 13, 2016 from 5:30 p.m. to 8:30 p.m.
Uptown Location:  September 28, 2016 from 5:30 p.m. to 7:30 p.m.

Where:  

Downtown Location: 79 John St., 2nd Fl, New York, NY 10038
Uptown Location:  361 West 125th St., 2nd Fl, New York, NY 10027

Seminar Description:  An insider look at tips, tricks, and best practices to start your first restaurant in NYC, presented by Restaurant Attorney James D. DiPasquale.  To start and run a successful restaurant you must understand many different legal considerations which make operating in New York City, particularly unique. Whether you are a new or existing restaurant owner, this special follow-up to the Restaurant Management Boot Camp class will help you gain a deeper understanding of all of the basic requirements to get your business up and running.

-Forming a Corporation or Limited Liability Company (pros/cons of each)

-Partnership Considerations (The legalities of dealing with your business partners and investors)

-Finding  your restaurant space (Buying an existing restaurant vs. straight lease)

-Negotiating your Restaurant’s lease

-Applying for a Liquor License

-General discussion on permits needed (food service/cabaret/sidewalk café, etc.)

To Register:

For the Downtown seminar:  click HERE or paste the following link into your web browser: https://www.eventbrite.com/e/restaurant-management-bootcamp-20-lower-manhattan-91316-registration-27080444338

For the Uptown seminar, click HERE or paste the following link into your web browser: https://www.eventbrite.com/e/restaurant-management-bootcamp-20-upper-manhattan-92816-registration-26354368626?aff=ebapi


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Wednesday, August 26, 2015

State Liquor Authority Battles Albany Wine Retailer Over Out-of-State Shipping Restrictions

Can the State Liquor Authority regulate the retail sale of wine?

The State Liquor Authority (SLA) is the agency responsible for issuing liquor licenses, regulating alcohol sales, and doling out punishments to bars and restaurants caught violating the various regulations surrounding the industry. However, many are beginning to consider whether the SLA has actually gone too far within the context of retail wine and beer sales – particularly with regard to the out-of-state shipment of orders from local wineries and microbrews.

In one ongoing battle, upstate New York’s Empire Wines has sought an answer to this very question, and is engaging in ongoing litigation to help clarify the breadth of powers the SLA may use against New York-based companies engaged in the out-of-state sale of wine, beer and liquor. So far, the SLA has imposed several citations against Empire Wines, based primarily on the premise that the states to which it is shipping alcohol have their own prohibitions against the interstate shipment of alcohol. In other words, Empire Wines is exporting wines to states from which wine export is prohibited.

In its defense, Empire Wines has pointed out the blatant fact that it is not breaking any laws in the state of New York by shipping wines to places that do not allow their own businesses to engage in similar practices. In essence, Empire Wines asserts that the SLA’s charge of “improper conduct” is, in and of itself, an improper exercise of power by the agency and should be stopped through legislation.

Earlier this year, a bill that would put a stop to the SLA’s enforcement powers over perceived violations of laws in other states – especially when no other state has made a finding of guilt against a New York-based retailer-- passed both houses of the New York State legislature with broad support.

This bill is awaiting Governor Cuomo's signature. The governor has publicly voiced his support of New York’s growing winery and microbrew industry.

If you are facing a difficulties regarding SLA regulations and would like to discuss your options with an experienced liquor license attorney, please contact DiPasquale Law Group, serving the greater New York City metropolitan area, at 646.383.4607.


Monday, August 24, 2015

Restaurant Owners' Options When Diners are Unable to Pay

Is it true that a restaurant owner can make diners pay off their tab by washing dishes?

Unlike many other industries, payment for food service generally works on the “honor system,” meaning patrons are generally not expected to pay until the end of the meal. While this arrangement works the vast majority of the time, there have been incidents in nearly every New York restaurant where a diner has faced the embarrassing situation of being unable to foot the bill. In this scenario, what are a restaurant owner’s legal options to ensure repayment?

Forcing diners to wash dishes in exchange for their meal, though a prevalent old wives’ tale, is likely a labor violation and should be avoided as a settlement tactic. First of all, washing dishes can be a dangerous job, and a restaurant owner could be liable in the event a diner is injured while performing the task. Secondly, there are more civil ways to handle the situation that work to avoid added embarrassment and humiliation for the patron.

If the patron is a regular guest, chances are he or she will be able to come back later to settle the bill. Nonetheless, the restauranteur should ask for identification, such as a drivers’ license in order to record the patron’s name and address. Private business owners are well within their rights to refuse service to a patron who owes money to the house. For this reason, front staff should always be informed of any remaining unpaid bills.

Another way of dealing with this situation is to send an invoice to the individual for the unpaid bill, leaving an option for the diner to include a tip for the server that particular evening. According to several New York City restaurant owners, this option works most of the time and is likely the best possible solution to an uncomfortable, but not uncommon, problem.

If you have any questions about legal compliance for your New York City restaurant establishment, whether about customer relations or other relevant matters, please do not hesitate to contact the DiPasquale Law Group, where you will receive our attention and knowledgeable advice. We can be reached at 646.383.4607.


Monday, August 10, 2015

UPDATE - Popular NYC Brunch Location Loses Its Liquor License

What are some scenarios that could give rise to a suspension or revocation of a liquor license in New York? 

Restaurants, bars and nightclubs expecting to sell alcohol in New York must also be prepared for the bevy of rules and regulations that apply to these establishments – or risk losing out big time.

Take, for instance, the Flatiron District’s Pranna Restaurant, which will undoubtedly face closure following a final ruling by the State Liquor Authority revoking its right to sell alcohol on the premises. Pranna’s ‘Bottomless Brunch’ feature had become such a nuisance in the neighborhood, near-constant complaints were being submitted to the SLA’s Compliance Board. Most notably, residents recalled tales of brunchers urinating on sidewalks, vomiting, engaging in loud and obnoxious monologues and essentially wreaking havoc during an otherwise conservative time of day.



Read more . . .


Thursday, July 30, 2015

Luxury NYC Eatery Facing Labor Law Violations Over Gratuity Faux Pas

I was charged a 20% ‘service fee’ for a private dining event in New York City. Is this type of fee permissible under New York law? 

Beginning in July, 2013, the New York Attorney General’s Office began to examine the operating structure of the luxury restaurant Per Se, located on Columbus Avenue, New York, New York. According to the factual allegations, the restaurant was attaching a significant “service fee” to the final bill for private dining services amounting to 20% of the entire check. On the service agreement, the service fee was not explicitly described, and most patrons believed it to be a fee included to ensure proper gratuity was paid to the wait staff scheduled to work the event. In reality, however, the 20% fee – which was presumably sizable considering the $310.00-per-plate prix fixe menu – was used for daily operational costs of the restaurant, and was in no way paid to the wait staff for any private event scheduled by the restaurant.


Read more . . .


Friday, July 10, 2015

Obama Care - Are Restaurants Now Required to Provide and Pay for Their Employees’ Health Insurance?

I have been getting many calls from clients asking whether their restaurant (or restaurant group) needs to provide (and pay for) health insurance for their employees.  Unfortunately, the answer is not a simple one.

Beginning this year, companies with 50 full-time equivalent employees (“FTE”) must provide health insurance to at-least 70% of their employees.  In 2016, at-least 95% of all employees must be covered starting in 2016.  If your initial reaction was “I don’t have 50 full-time employees” don’t get too comfortable just yet.  Lets look at the facts:



Read more . . .


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