An Update On "splitting Profits 50-50"

Business By M3m3m3 Updated 5 Jan 2016 , 9:00am by Pastrybaglady

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M3m3m3 Posted 4 Jan 2016 , 8:27pm
post #1 of 6

So my original post stated there is a small cafe in my community struggling to make a go of it. It has been open about 7 months. The building itself is rather funky as its a converted old storage shed.

I think the reason the business isn't doing better is for several reasons- first and foremost, the food isn't that great. Secondly, the proprietor doesn't have much of a head for business. Thirdly, the lady is having to make improvements and work with poorly maintained equipment. And lastly, she has no marketing.

She had said I could use the kitchen, buy my own ingredients and then sell my goodies in her cafe. We will split the profits 50-50. At this time, I don't really need her kitchen to make goodies as I am baking under the cottage laws.

SHE is renting the place from someone else. We will call her SOE  for short. SOE placed an order from me for a party- I made three varieties of brownies for her which she loved (of course!) She wants me to rent the kitchen directly from her and then wholesale to cafe owner. This is a much better deal for me but again- I don't need to rent the place at this time because 1) the volume isn't that large and 2) I'm working under the cottage laws. This is pretty straight forward a deal....

But wait- there's more!

SOE would like to see me make a few doughnuts to draw in business during breakfast hours.How in the word does that play into anything??? Should I pay both proprietor AND SOE for kitchen use? Separate cash registers and employees?

Good golly! Yikes!

Im game for doing the breakfast crowd but I think it should be a totally separate entity from the other two things- 1) wholesale baked items and 2) renting kitchen in off hours. I suppose I could rent kitchen to make the doughnuts and then vacate premises prior to cafe owner getting there.....she could purchase the doughnuts and pastrties and we could split the cost of signage and freebies to the local churches.

What say you?

5 replies
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costumeczar Posted 5 Jan 2016 , 1:20am
post #2 of 6

I'm confused...Is the owner of the building running a business out of the space too? If she isn't, why would she have any say in you doing anything to sell out of there? This whole thing sounds very incestuous and confused. I'd stay in my own kitchen, bake under cottage laws and wholesale to the two of them if they just want your baked good. Where does rent even come into this?

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craftybanana2 Posted 5 Jan 2016 , 3:39am
post #3 of 6

Also, double check that you can sell doughnuts under your cottage law, some states don't allow (WA) it and others like my state (FL) are pretty laid back. I'm not in business, but it does smells fishy.

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johnson6ofus Posted 5 Jan 2016 , 4:06am
post #4 of 6

Seems like they want you to rent something you don't need and an expense that doesn't yield much benefit. IE. I don't need a snowblower, so why would I rent one from you?

The price of a product you make, is the price you charge. Rent/ space etc is not a factor IMHO. 

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Magda_MI Posted 5 Jan 2016 , 6:09am
post #5 of 6

Like others, I don't see where the benefit is to you of renting space you don't need.  Sounds more like they want to get money  from you for rent, and/or a bigger discount on baked goods or a share of your profits.  I don't see where any of this helps you.

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Pastrybaglady Posted 5 Jan 2016 , 9:00am
post #6 of 6

No, just no!  Sounds like the only one benefitting from this weird relationship would be SOE.  

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