I have recently been approached at my current position as a bar manager in a fairly successful small bar open for just over a year, to open a much larger operation as a co-owner elsewhere. The owner of my current bar has approached me about selling me the bar within this last year, as he has much bigger plans, but we have not talked about the fine details as of yet. This new space is about 2,500 sf and could not be in a better situated part of the city. The neighborhood itself is growing at an incredible rate; old buildings being torn down to erect increasingly larger apartment buildings. There is perfect foot traffic and a high number of other restaurants and bars in the area, but none offering what exists in the business plan. 'Kitty-corner' across the street is a pair of restaurants that collectively do an average of $12m gross annually and will be closing down within a couple of years, due to the owners of the land selling to a developer to build more apartments. The build-out is looking to be in the $250k range and the person whom approached me has about $200k liquid, ready to start construction immediately in the new year. The first offer is 15% equity if I personally raise $50k to the table and I am responsible for the creation and design of the full beverage program for two different spaces and the management of daily operations and hiring and management of entire FOH staff. I would probably negotiate for a higher equity percentage as I have been bartending and managing for seven years, have over ten years' experience in the service industry, and would most likely end up being the face of the entire business, but that is not the reason for this post.
This is an incredible opportunity. I believe strongly that with closely paid attention and hard work on all of our parts, this could, and will be a very successful business. Also, being that it is in a rapidly growing neighborhood and we have been promised in the lease agreement options for two ten-year leases, the likelihood of being bought out of our lease in order for the land to be developed is quite high, presenting an investment opportunity as well. The question comes in with my potential main partner. As I mentioned before, he and our other partner, his brother have 80% of the projected budget, liquid, ready to go. But, upon doing some sleuthing, a few questionable things have popped up involving this guy. As I confronted him, he was neither defensive nor angry, but in fact was very candid about his past and even shared further beyond what I asked. He seemed to realize over about the past fifteen years or so that not doing things entirely legitimately was not work the risk although, as a younger man didn't seem to think that way. He mentioned a number of illegal dealings in order to be successful, which has always been very important to him, citing his Eastern European background as an influence. I believe what he says about how he operates now, as he has two restaurants currently open that seem to be doing quite well, and I get a pretty good feeling from him as a person but I am faced with a very difficult question:
Do I overlook this man's checkered past and the fact that he is open about making what I consider to be morally wrong decisions in his youth so I can be a part of a potentially very successful business and investment opportunity? Is it possible to move forward and protect myself in a way that if anything arises out of his past, I am not involved and thus unaffected? I am recently married, and so I have more than just myself to think about.
I appreciate any thoughts on the situation. I've been hearing my family's opinions about it for awhile, but I thought maybe some unbiased input might help me look at the entire scenario a little more objectively.
Thank you for you time in reading this, and any thoughts you might share.