Partnering with a Microbrewery

[Preston]

Hey all,

A highly regarded local Microbrewery is opening a second location on the other side of town. They want us to be their partner as their owner enjoys our food. This particular brewery has been around for 5+ years and has some nationally award winning beers. They server no food of any kind. Their original taproom is not near any restaurants so many food trucks come and go. This new location that is not an option, a city ordinance prevents food trucks from operating 100FT from a brick and mortar restaurant.

As part of the agreement we would not serve any beer or wine and they wouldn’t serve any food or soda. The brewery is open from 12am -12PM everyday and is usually full of people. The proposed location is a yet to be built strip mall in a heavily undeserved area with high traffic counts.

To be this seems like a home run, should I be worried for any reason? My only concern is whether the developer will do a build out, or we’ll have to come up with the funds somehow.

Another option might be to open a 2nd location not with the brewery and open with beer and wine. But to me, all these hungry people right next door seems too good to pass up!

Thoughts?

Thanks!

 

[Piedad]

I like your alternative better … open a new place with many craft beer (and several wine) offerings (folks like choices), no partners and a place where you make all the creative and business decisions. You’ve said that you would offer no beer or wine and they would offer no food, so it sounds as if there would be two separate and distinct businesses operating under the same roof … in my opinion, this is a recipe for disagreement waiting to happen. I always tell folks that Saint Peter still has an empty seat on each side of him at the Pearly Gates … he’s saving them for the first 2 partners who got along. Bet on yourself, not on 2 businesses under the same roof, with separate agendas and concepts. JMHO

 

[GotRocks]

Partnerships and shared space;
I’m not a fan of those arrangements through personal experience, and the experience of friends of mine who have also tried it.

When I made the mover from only catering to operating as a restaurant, I partnered with a bar. I leased the kitchen. I had product theft issues, I had discrepancies in sales amounts, many other issues too.
A close friend in the industry had an issue where the bar owner was selling gift certificates, and when they’d be redeemed, the monies were not going to the correct places.
Be careful, make sure a POS system is used, hire an attorney to draw up partnership papers with well defined responsibilities of each involved entity, in other words, cover your arse!

 

[Preston]

I should have explained myself a little better. This is a new strip mall, instead of a “Partnership” this is more of two businesses deciding to move next to one another because it would be mutually beneficial to both. We will be in separate buildings right next to each other. We’re not making food for them, they aren’t selling drinks for us. Their other store is packed with people who just drink beer, food trucks show up and provide food to these people. This proposed new location will not allow food trucks, so my hope is that we will get all that business.

Not sure if that changes your opinions, but it sounds like it would be more beneficial for me to open another location with my own beer and wine?

 

[Piedad]

I should have explained myself a little better. This is a new strip mall, instead of a “Partnership” this is more of two businesses deciding to move next to one another because it would be mutually beneficial to both. We will be in separate buildings right next to each other. We’re not making food for them, they aren’t selling drinks for us. Their other store is packed with people who just drink beer, food trucks show up and provide food to these people. This proposed new location will not allow food trucks, so my hope is that we will get all that business.

Not sure if that changes your opinions, but it sounds like it would be more beneficial for me to open another location with my own beer and wine?

Exactly. First, and most important, is the fact that folks simply don’t want to have a beer, pay their tab, leave and then go somewhere else (even if it’s next door) to get something to eat. The opposite is also true. They want to have a beer or glass of wine WITH their meal. So why not give the public what it wants … a nice place to enjoy pizza (or many other alternatives) AND a beer. Moreover, why not also offer them options through a wide variety of craft beers (including even the old standards … some will never give up their Coors Light) and a couple of thoughtfully selected wines, instead of the limited offerings of only one brewer. There is no magical skill associated with including beer and wine on your menu … but it sure is magical how the public will see you as a “value added” joint when you can let them enjoy a complimentary pint with their meal.

 

[Home_Town_Pizza]

I don’t know. If you’re going to have a good relationship with the neighbor, I could see it working very well. I know of several bars in Columbus that have a pizza shop right next door. They have a little hole in the wall between the two. The waitstaff takes the customer’s’ order as they are seated having drinks, then places the order next door. You can get creative on how you want to handle payments, but I think there is a way to figure it out.

I can see this being good for a number of reasons. You have the captive audience that likes to eat while they have a few drinks. But now you don’t have to worry about the liquor laws and all the hassles & expense that comes with it. You also don’t have to deal with the wait staff and dining room space and the hassles that come with them. Basically you get the increased business that comes with a dining room, without the hassle or expense. Plus, it’s a chance to hook people on your product and hopefully get them to order in the future for home. Going the other way, maybe people will come in to order a pizza, then stop over and have a drink next door while they wait for it.

I would just make sure that the business location makes sense on its own as well, and that this relationship doesn’t make or break your success. Make sure that if they go out of business next week, that that isn’t going to drop you to a level that doesn’t make any sense for you to be there. I think it can be great. You won’t get the added revenue from alcohol sales that you would if you did it on your own, but you would also save a ton of overhead and headaches, while still having a great chance at increasing your bottom line.