Tags Posts tagged with "Partnership"

Partnership

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Kogi Taco Bell Truck

IRVINE, CA - The last several years haven’t been good for Taco Bell. There was the E. Coli outbreak in 2006, the salmonella illnesses in 2012 and the accusation that the fast-food chain’s beef is barely beef. (Taco Bell strongly denies this.) So, understandably, the restaurant is gearing up for a total makeover.

Brian Niccol, the president of Irvine-based Taco Bell, announced late last night that he and Roy Choi of Kogi BBQ have agreed on terms of an agreement that would license the use of the Kogi name as well as the recipes from the founder of the gourmet food truck industry.

Starting April 17th, Taco Bell will begin a national rollout of a much-hyped new menu item: the Kogi Short Rib Taco. It’s aptly named, because instead of just your everyday taco, the Kogi Taco has a filling that none of their other products have; Korean style beef short rib.

The Original Kogi BBQ beef short rib taco is housed in warm corn tortillas and carry a perfect mix of Korean BBQ, dressed with a wonderfully fresh cabbage-based slaw. With Choi’s help, Taco Bell has perfected the combination and is ready to unleash it on the country.

The partnership is two years in the making, and many people in the industry are expecting it to be an enormous hit.  Along with the new taco, Taco Bell is attempting something it’s tried and failed in the past: food trucks.

“Roy has shown us how to do it right. He has shown the systems we need to have in place to bring Taco Bell food trucks to every region of the county.” Niccol stated.

The Taco Bell food trucks will be hitting the streets with the Kogi BBQ Taco on April 17th in the following cities:

  • Austin
  • Boston
  • Chicago
  • Dallas
  • Los Angeles
  • Miami
  • Minneapolis
  • Philadelphia
  • Portland
  • San Francisco

Considering the sweeping changes the 5,600-unit chain is undertaking, it will also soon roll out a new slogan. Say goodbye to “Think outside the bun” and welcome in “Live Mas.” Mas is Spanish for “more,” and it evokes the rather popular “Yo quiero Taco Bell” that the fast-food chain successfully used along with their recognizable talking Chihuahua. It’s a move to make customers think of Taco Bell as a lifestyle choice rather than just a place to pick up a cheap taco. Taco Bell is hoping that the new slogan, as well as its series of bold moves, will translate into customers visiting and spending mas as well.

UPDATE: Please read our April Fool’s Day Recap

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Break Up Your Food Truck Partnership

Much like a marriage, a food truck business partnership may start out with the best of intentions, but constant disagreements or financial woes can bring even the strongest partnership to its knees. Sometimes it’s best to cut your losses and part ways, even if it hurts your livelihood.

Here are the top five ways to tell it’s time to break up your food truck partnership:

Consistent Stalemates

If no decisions can ever be made because you and your partner can’t agree on anything, then what are you left with? When no decisions get made, a food truck business won’t have any new revenue streams and turns quickly stagnant.

In a good partnership, both parties should understand what happens if a stalemate occurs. Either an outside party has a vote, or one partner’s decision trumps another. When this doesn’t happen, it’s time to think about moving on.

No Communications

In many food truck partnerships there is a natural division of labor where one partner may be better at cooking, while one person is better at the books. Unfortunately, this may lead to a situation where neither partner understands the other’s role and the waters get muddied.

If your partner is not willing to sit down with you and go over the books, then you have a serious problem. When partners start communicating exclusively by text or email it’s a major red flag that the lines of communication have broken down.

Most mobile food businesses didn’t start over text, they were probably hashed out in a bar or over a meal, and you’ve got to keep that up.

If you don’t want to get face to face with your partner long enough for a weekly meeting, it’s a definite sign that things aren’t going to work, he says.

Staff Pits Partner Against Partner

When the food truck’s employees have begun running the show, using the partners to get their own way, it’s time to throw in the towel. It means neither partner is truly connected to the business anymore.

If an employee wants a day off and gets a ‘no’ from one partner, then they’ll go to another partner and that partner will grant it because the two aren’t in sync, then the entire business takes a hit because there aren’t enough people working.

This could be a sign that one or both partners are checked out, or perhaps that one partner feels like they can make any decision they want without consulting the other.

One Partner Isn’t Pulling Their Weight

One of the biggest red flags is when you seem to be working 80 hours a week, and for the life of you, you can’t figure out what your partner does all day.

Any situation where one partner bears the brunt of the workload regularly or commits more time to the business, there will more than likely be resentment and bitterness over the inequality in involvement.

From a business perspective, unresolved issues between business partners creates friction, wastes time and impedes progress.

In many cases, one partner may find the other continues to fail at delivering promised results and then one partner will hit their breaking point and that’s the end of it.

Values No Longer Align

Having the same vision for a mobile food business is crucial to the success of any partnership, when the partner’s visions move in completely different directions, it is time for change.

Opposites attract not just in relationships but in business as well and that can be good and bad.

People get into mobile food industry partnerships because each brings to the table a talent that is different and can complement the other, but what is often overlooked is alignment of values. When your values are out of sync, then it’s time to go your separate ways.

If you and your co-founder don’t see eye to eye on financial obligations – spending, investing, funding, and so on – this is where you see a fundamental partnership disconnect. If you and your food truck partner consistently struggle to come to a mutual decision and handle disagreements respectfully, your relationship may not be destined to last.

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forming a food truck llc

Are you planning to open a food truck business in the future? After you have developed your concept and menu, you will need to start thinking about spending money to get your mobile food business on the road. To do this, you will need a bank account and a way to protect yourself and your family from the liabilities involved in running a business.

To complete these items on your to-do list, the next step in your culinary adventure must be creating a legal entity. You have a number of options, but the most common in the food truck industry is the limited liability company (LLC).

Forming an LLC is not as hard as most people think. Here are the steps you need to take to make your food truck LLC a legal reality.

  • Choose an available business name that complies with your state’s LLC rules.
  • File formal paperwork, usually called articles of organization, and pay the filing fee.
  • Create an LLC operating agreement, which sets out the rights and responsibilities of the LLC members.
  • Publish a notice of your intent to form an LLC (required in only a few states).
  • Obtain licenses and permits that may be required for your business.

All of the paperwork and procedural steps to start a limited liability company in your state can be done online using a number of different options such as LegalZoom.com .

Choosing a Name for Your Food Truck LLC

The name of your LLC must comply with the rules of your state’s LLC division. (Typically, this office is combined with the corporations division within the secretary of state’s office.) While requirements differ from state to state, generally:

  • cannot be the same as the name of another LLC on file with the LLC office
  • must end with an LLC designator, such as “Limited Liability Company” or “Limited Company,” or an abbreviation of one of these phrases (such as “LLC,” “L.L.C.,” or “Ltd. Liability Co.”), and
  • cannot include certain words prohibited by the state, such as Bank, Insurance, Corporation or City (state rules differ on which words are prohibited).

Your state’s LLC office can tell you how to find out whether your proposed name is available for your use. Often, for a small fee, you can reserve your LLC name for a short period of time until you file your articles of organization.

Besides following your state’s LLC naming rules, you must make sure your name won’t violate another company’s trademark.

Check out Trademarking Your Food Truck for information on trademark law and general advice on picking a successful food truck business name.

Once you’ve found a legal and available name, you don’t usually need to register it with your state. When you file your articles of organization, your business name will be automatically registered.

Filing Articles of Organization

After settling on a name, you must prepare and file “articles of organization” with your state’s LLC filing office. While most states use the term “articles of organization” to refer to the basic document required to create an LLC, some states call it a “certificate of formation” or “certificate of organization.”

Filing Fees

One disadvantage of forming an LLC instead of a partnership or a sole proprietorship is that you’ll have to pay a filing fee when you submit your articles of organization. This can range from $100 – $1,000.

Required Information

Articles of organization are short, simple documents. In fact, you can usually prepare your own in just a few minutes by filling in the blanks and checking the boxes on a form provided by your state’s filing office. Typically, you must provide only your LLC’s name, its address, and sometimes the names of all of the owners — called members. Generally, all of the LLC owners may prepare and sign the articles, or they can appoint just one person to do so.

Registered Agent

You will probably also be required to list the name and address of a person — usually one of the LLC members — who will act as your LLC’s “registered agent,” or “agent for service of process.” Your agent is the person designated to receive legal papers in any future lawsuit involving your LLC.

Creating an LLC Operating Agreement

Even though operating agreements need not be filed with the LLC filing office and are rarely required by state law, it is essential that you create one. In an LLC operating agreement, you set out rules for the ownership and operation of the business (much like a partnership agreement or corporate bylaws). A typical operating agreement includes:

  • members’ percentage interests in the business
  • members’ rights and responsibilities
  • members’ voting power
  • how profits and losses will be allocated
  • how the LLC will be managed
  • rules for holding meetings and taking votes, and
  • “buy-sell” provisions, which determine what happens if a member wants to sell his or her interest, dies, or becomes disabled.

Publication Requirements

In a few states, you must take an additional step to make your company official: You must publish a simple notice in a local newspaper, stating that you intend to form an LLC. You are required to publish the notice several times over a period of weeks and then submit an “affidavit of publication” to the LLC filing office. Your local newspaper should be able to help you with this filing.

Licenses and Permits

After you’ve completed the steps described above, your LLC is official. But before you open your service door for business, you need to obtain the licenses and permits that all new businesses must have to operate. These may include a business license (sometimes also referred to as a “tax registration certificate”), a federal employer identification number, a sellers’ permit, or a zoning permit.

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tip of the day

For a food truck business that is formed as a partnership learning how to nurture these business relationships is critical to the businesses growth.

You need to be committed to these relationships so doubt doesn’t creep in. Make sure everyone is clear on timelines, expectations, deliverables, communication preferences, collaboration methods and other issues before you even move forward.

Don’t over promise and under-deliver; that can be a sure way to undermine a partnership. Show attention to detail, even down to spell-checking documents. You want your food truck organization to build a good reputation, so demonstrate your professionalism in all aspects of the partnership.

These relationships depend on trust and commitment, so there’s no place for apathy. Watch out for self-delusion and keep your eyes open; it’s easy to pretend everything’s going well when it’s not. Be up front about everything, even problems and mistakes. Integrity and honest communication will go a long way toward helping your alliances work.

 

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food truck partnership

As you begin planning your mobile food business, you will have a lot of decisions to make. One of the most important decisions is centered on its business structure and whether or not you should take on any partners and if so, how many. These partners will be others who invest, assume the risks, and take profit in the business together with you. It is a decision that you must make early on as funding your food truck is one of the first steps to getting started.

Food Truck Partnership Advantages

You will find that there are many advantages to taking on partners. You will have to endure a much lower upfront cost than if you would open on your own. Even if you take out some loans, you will not have the bulk of the debt on your shoulders. You can establish how much each person contributes and what their ownership stake will be. You will also not have to make all the decisions on your own or take all the risks by yourself. Your partners will assume part of those roles as well.

Food Truck Partnership Disadvantages

Even though there are advantages to taking on partners, there will be disadvantages as well. Though you may have dreamed of opening a food truck for some time, you will not have full control over it. The partners will have a say in the operations that have to get done and decisions that have to be made. It will be necessary to work together even though everyone has different personalities and preferences. It is important that all partners should be kept happy. Of course you also will not see the full profits. They will be split according to the initial agreement.

Only you can determine if having partners is the right decision for your food truck business. If you opt to form a partnership it is important that you find the right partners. Just remember that not everyone will make a good business partner, even friends and family may not work out. This is a business arrangement and the people you choose to work with should be those that you can rely on in business.

Things To Consider

  • Take the time to choose carefully. Do not let close friends or family ties make you select someone that would not work well in mobile business. The people you select should understand business, be willing to work as you establish yourselves and have the ability to help with funding.
  • Only select people that you fully trust. You will be placing a lot of personal and professional risks on the line when you open your business. You do not want to do that if you cannot fully trust the people you choose to work with. You should make sure that they will be honest, fair and trustworthy.
  • To assure that everyone understands the agreement, set up a contract stating how everyone will contribute and what their ownership rights will be. This is something that should be established early on. You certainly don’t want to be surprised later on with having to dish out more money than you expected.
  • Ensure that your goals are the same. You may have different ideas about how to reach the goals so you want to work them out first. However, you should all have the same goals and visions in mind for business matters.

 

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