Restaurant Law Blog

I just came across this list.  “The Top 15 Reasons why Restaurants Fail:

1. Lack of experience, 2. Lack of capital, 3. Poor locations, 4. Inventory, 5. Equipment, 6. Poor credit practices, 7. Personal expenses, 8. Premature expansion, 9. Bad attitude, 10. Too many expenses, 11. Poor collections, 12. Low sales, 13. Inventory mismanagement, 14. Competition, and 15. Crime

I’m not sure that I agree with the list entirely.  Let me start by saying that I am not a restaurant owner.  I am a restaurant attorney.  So, I may be wrong ( and often am)  but many of my clients who have sold their business express different reasons as to why their business failed.  This is what I’ve gathered to be their top reasons why restaurants fail: 

In the field level seating section of Yankee Stadium, spectators are given menus that read:  “A 20% service charge will be added to the listed prices…”  That statement has become the subject of a class action lawsuit filed in Federal Court on May 9, 2011 which alleges that the catering companies that service Yankee Stadium misappropriated employee tips.  The lawsuit contends that the catering companies kept the twenty percent ‘service charge’ on top of the cost for the food and drink.  According to the employees, the ‘service charge’ was actually a gratuity that was owed to the employees.  In support of their claim, employees cited the recent 2008 New York Court of Appeal’s decision in Samiento v. World Yacht Inc., 10 N.Y.3d 70 (2008), which held that charges that are not voluntary payments made by the consumer, may be a “charge purported to be a gratuity within the meaning of the New York Labor Law statute.”  Even the Yankees Can’t Avoid Employee Wage Lawsuits.

On May 25, 2011 members of the State Liquor Authority suspended the liquor license belonging to the Player’s Club, a bar located at 360 West Rout 59 in Nanuet.  The suspension was issued following the discovery of illegal drug sales and prostitution, in addition to a recent history of several violent assaults.  By law, the State Liquor Authority can temporarily suspend a liquor license if it finds that the public health, safety, or welfare is in immediate jeopardy.  The Player Club bar owners have been charged with sixteen separate violations of the ABC Law including: permitting the trafficking of controlled substances, paying employees off the books, employing unregistered bouncers, total lack of supervision, and employing dancers to induce patrons to purchase alcohol at inflated prices.  These new charges come in addition to twelve prior charges that were brought against the club’s owners for lewd and indecent performance, permitting drug trafficking and lack of supervision.  Most Common Liquor License Violations

A little over a month ago, Ashley Phillips was dining at Chili’s in Farmington, New Mexico when she bit into and pierced her tongue on a 2” long sewing needle that was being used by a Chili’s cook to clean his marijuana pipe.  Chili’s employees helped the customer extract the needle but then shockingly, refused to give the customer the needle so that she could have it tested for HIV, Hepatitis or other infections.  The resulting lawsuit was filed in part because the customer was annoyed that it took Chili’s fifty two days before it relented and sent the needle to a laboratory for testing.  For More Information on Restaurant Liability

Ramesh Bhatia, is the 65 year old owner of a Subway and Papa John's Restaurant located in Midtown Manhattan.  According to the New York State Department of Taxation and Finance, Ms. Bhatia admitted to stealing $337,000 in sales tax revenue from 2004 through 2010 and having filed a false New York City corporate tax return in an effort to intentionally defraud the City out of $76,000.  According to District Attorney Cyrus R. Vance, Jr., Bhatia will serve thirty extended weekends in prison and will be liable to repay the City and State the 3.4 million they calculate that he swindled over the past seven years. 

The 2011 Bar & Wine Show will return to the Jacob Javits Center on June 28^th and June 29^th and will have over 300 exhibitors on hand marketing their new spirits, wine, beer, bar supplies, furniture and much more.  According to promoters, the Bar & Wine Show will feature both a cocktail contest and the ‘largest flair bartender competition’ on the planet.  Advanced admission is $40 while admission after June 20^th is $50 and must be paid at the door.  More information can be found at:  http://www.newyorkbarshow.com/index.php?loc=attendee

A Dram Shop Claim in New York City can be devastating to a tavern, bar or restaurant.

New York City restaurant attorneys understand that busy Friday and Saturday nights -- or busy holiday weekends like Memorial Day -- are often what push a small business over the line and into profitability. Responsible waitresses or bartenders do not serve intoxicated patrons. But neither should you be charged with babysitting grown adults.

A judge's ruling gives New York City exclusive rights to the name Tavern on the Green for restaurant services in Manhattan and the outer buroughs. However, the settlement could allow the name to be used by others outside the tri-state region, the Wall Street Journal reports.
 

While fate of the famous Central Park landmark's moniker was settled in bankruptcy court in this case, it illustrates a number of areas of restaurant law in New York for which it can be critical to seek the advice of a Manhattan restaurant attorney.

The Empire State Restaurant and Tavern Association in conjunction with the New York State liquor Authority, is hosting a free alcohol beverage control seminar for restaurants, bars, nightclubs and Tavern owners on Monday, May 16, 2011 at Cove Restaurant in Peekskill, New York.

Jose Torres, owner of Joe’s Place at 20 Valentine Street in Yonkers, New York is was arrested this week for failing to remit more than one half million dollars in sales tax revenue to the City and State.  Allegations have also been made that Mr. Torres failed to report over six million dollars in sales tax revenue over the page five years. 

Mr. Torres was arraigned on the felony charges in the Bronx County Criminal Court.  The charges include Grand Larceny in the 2^ndDegree (Class C Felony); two counts of Criminal Tax Fraud in the 2^ndDegree (Class C Felony); and nineteen counts of Offering a False Instrument for Filing in the 1^stDegree (Class E Felonies). 

A restaurant/landlord dispute in New York City is forcing the closure of the legendary Oak Room, the New York Times reported.

A Manhattan restaurant attorney can help ensure the survival of your business in many ways, but nothing is more basic than making sure that your lease agreement is not a ticking time bomb. Expansion, leasehold improvements, permitted uses, hours of operation, renewal clauses and rent increases are just a few of the considerations when designing or renewing a lease.