Business Law

Restaurants have come and g whiz over the stratums. For each one that goes out of line of reasoning, an early(a) one takes over its place. Why do so many eaterys fail within the first year? No other industry faces this type of statistics. One of my favorites in Austin, TX had recently shut it doors. I was heart-broken. I frequently eat there at least 3 times a week before relocating to Houston. The food is good and service was everlastingly exceptional. I had been hearing rumors that they were facing Federal tax lien, rearwards rent and legal issues. The establishment was always busy. I was unexpended to why they were unable to pay for their taxes and rent, thus forming the basis for my investigation. by and by numerous attempts, I was able to contact the owners for an interview. I detect that most restaurants that fail as a result of a number of factors.
Although the economy has a made turn about and his restaurant had made a come back from earlier years, he was constrained to take out short-term juicy interest loan to stay afloat during rough times. in all of his short-term high interest loans matured at once, patch his business only increased steadily. Therefore, any profit generated from the business was taken over by creditors, back rent and the federal government.




IRS had frozen his assets in an attempt to collect the balance. The bank was forced to submit all of his sales to the IRS. As a result, the restaurant had no more cash flow for operating and forced to shut it doors. Cash flow is vital to a restaurant. He did not have enough cash to cover magnanimous expenses, such as food orders, payroll and all the other bills that come with a restaurant. His monthly rent alone was $8,000 for 2500 straightforward feet and with rent increases 3% annually. When his checking account starts running into the red, he started to look into liquidation.
The former owner agreed that the location itself was also a contributing factor to shutting his doors. The location was situated in nice...If you want to get a full essay, order it on our website: Ordercustompaper.com



If you want to get a full essay, wisit our page: write my paper