The Impact of Divorce on Your Restaurant BusinessBy DADvocacy™ | March 26, 2018
Perhaps more than any other kind of business, restaurant owners put all of themselves into to their businesses. However, when it comes to divorce, a restaurant is not the same as other assets that will need to be divided between you and your spouse. Not only does divorce take an emotional toll on the restaurant owner, it can also have a severe impact on the business. To make matters worse, the attorney’s fees for the disposition of a restaurant can exceed the value of the restaurant itself.
There are two primary risks that restaurant owners face during a divorce:
- Accusations of unreported cash income
- Accusations of code violations that put patrons at risk
These can be some of the worst accusations you face from your spouse. If you own a restaurant and are getting divorced, don’t expect that a judge will stop or correct your vindictive spouse. Sometimes, the judge can be your biggest obstacle in a divorce. Judges will likely make a restaurant owner disclose extensive confidential information about the finances and operations of their businesses so that its value and the owner’s true income can be determined. Financial disclosure requirements can be intrusive and incredibly burdensome. In some situations, a judge can decide that neither spouse should be trusted to run the restaurant, and will instead appoint a paid receiver to oversee operations.
Restaurant owners who are engaged to be married should hire a lawyer to draft a prenuptial agreement that protects the restaurant’s future growth, valuation, division, ownership, and control. Restaurant owners who are already married can create a postnuptial agreement to establish similar protections.
Prenuptial and postnuptial agreements should include the following:
- Confidentiality clauses to protect recipes and formulas
- Damage clauses specifying the amount the owner will receive if their spouse attacks the restaurant on social media
- Clauses to account for any “sweat equity” for unpaid work the non-owner spouse performed
- Non-compete clauses specifying the geographic area where the non-owner spouse cannot open a competing restaurant
If you own a restaurant and are getting divorced, you should immediately consult with a divorce attorney who has handled high value divorces before.
At the DADvocacy™ Law Firm, we can create a prenuptial or postnuptial agreement for you that will meet the unique needs of your restaurant. Our team of lawyers understands how difficult it can be to deal with divorce while also running a business. That is why we strive to do all that we can to protect your business and all the hard work you have put into it.
Contact our Miami team of father’s rights attorneys to schedule your case consultation today.