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Should the GM be able to sell the restaurant?

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Discussion Starter · #1 ·
Some friends and I have been discussing this, and I want to get some more opinions on this scenario. Please keep the discussion civil, and On Topic. Here is the scenario, I apologize if it seems a bit long:

A young man, 19 or 20 years old, is given a restaurant by a friend/ partner that has been running the place for about 6-8 months. The restaurant has been very successful, and has a general manager and team of assistant managers that have been running the place quite well. The new owner has a burgeoning career at another business, so he allows the restaurant to be run by the GM and AMs, offering his opinion when asked on important matters, as well as coming in on a regular basis to consort with customers, help out the wait staff when needed, etc.

The formula for the restaurant works so well, that after a year or so, it is pretty much running on cruise control. The owner allows the GM free reign to do things to improve the restaurant, enter contracts with suppliers, and even take in advertising money for ads placed throughout the restaurant and in the menu for goods and services that the customers may find interesting.

This continues on for a couple more years, everything running fine, the owner coming in and asking the GM if he needs anything (financial support or otherwise), enjoying the food, and maintaining relations with all the regular customers. But, the owner's presence gradually decreases to the point that a lot of the regular customers, many of whom started coming to the restaurant well after the original owner gave it to his friend, have the false impression that the GM is also the true owner of the restaurant.

Does the GM, who has been given pretty much full reign over the restaurant, including having every contract with the suppliers and utility companies in his own name, have the right to sell the restaurant to someone else, without consulting with the owner, and without giving the owner any of the proceeds?

Discuss.
 

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Just a reminder...
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No. He runs the restaurant, he does not own it. Just because you run the day to day operations of a business does not make you the legal owner.
 

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Morgan
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No. He runs the restaurant, he does not own it. Just because you run the day to day operations of a business does not make you the legal owner.
That's what I was thinking too.
 

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Discussion Starter · #4 ·
I added a poll, so those who don't necessarily want to post can still respond.
 

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Discussion Starter · #8 ·
Just to clarify my scenario, the GM holds all contracts in his name - there is nothing that legally ties the owner to the restaurant since he trusted his friend the GM to run the restaurant. I want to make sure that that distinction is made.

I personally don't think it makes a difference from an ethical standpoint, but wanted to distinguish the ethics/ morality from the law, which is something different.
 

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Morgan
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Whose name is on the lease/deed? Whose name is on the business license? If those are in the GM's name than he is the owner, if not, it's not his to sell.
 

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Discussion Starter · #10 ·
The lease is in the GM's name, as is the contract with the phone company, all utilities, etc. Because this was a small startup in a unique locality, there is no business license requirement, and therefore no business license exists.
 

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Celica No More
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Well...from a legal standpoint the GM IS the owner of the restaurant it seems.

It's not that anything the GM is doing is unethical (he isn't hurting anyone or damaging) but as a friend I think he should let the owner know of his intentions. Since the owner was the one who gave him the opportunity to run the restaurant.
 

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booooost
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Well, if EVERYTHING is in the GMs name, then the person who started the business can't techinically be the "owner" considering there's nothing in his name at all, seems he would just be the founder. So if that's the case, then yes the GM can sell it if he wants since it's techinically and legally his. If the "owner" wanted to try and take it to court or whatever I don't see how he would win considering nothing is in his name at all. From the sounds of it, it's the GMs store now, not the founder.

My vote is yes.
 

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HOOOO!
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Although the GM is legally the owner because everything being in his name ethically he should not be selling the business without consulting the owner.
 

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What was original agreement for operations and who produced financial endowment to establish business? What % of profit is the owner collecting?
 

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:rofl:
 

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no longer fenixracer?
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I find it hard to believe that someone one owns the place and just signs everything over to the manager without any kind of legal documentation.
Exactly.

Who "owns" a company but doesn't have his name on any of the papers. Unless of course he is just a silent partner or fronted some upstart money to get the business running. If that's the case (he fronted x amount of the upstart money and had the initial agreement to be a silent partner) then he's just that... a silent partner.
 
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