Many restaurant disputes boil down to one question: “Who gets to decide?”

Is it the chef? The money partner? The majority owner? The answer should be in your governance structure — not in the middle of a heated argument.

Manager-Managed vs Member-Managed LLCs

For LLCs, you must decide:

• Member-managed: All members have authority to bind the company unless limited.
• Manager-managed: One or more managers run day-to-day, and members act more like shareholders.

Most NYC restaurant groups choose manager-managed structures, so operations aren’t subject to constant owner votes.

Board or Management Committee Structures

For larger restaurants or groups:

• You may appoint a board of managers or a management committee.
• This group approves budgets, big hires, and strategic decisions, while leaving daily operations to the GM and chef.
  
  

Define:

• How many members sit on the board
• How they’re appointed and removed
• What actions require their approval
  
  

Day-to-Day Decisions vs Major Decisions

Clarify the difference between:

• Operational decisions: menu changes, staffing, marketing campaigns, vendor selections.
• Major decisions: signing or renewing leases, new locations, mortgages, large contracts, changes to capital structure.

Managers handle day-to-day decisions. Major decisions typically require owner or investor approval, sometimes by a supermajority.

Voting Rights: Percentage, Class, and Vetoes

Voting rules should be explicit:

• Do all owners vote strictly in proportion to their percentage interests?
• Do certain classes of interests (e.g., investor units) have special veto rights?
• Are some decisions reserved to a specific owner (e.g., only the chef can approve major menu/brand changes)?

This is where you prevent a money partner from quietly taking over creative control — or an operator from committing investors to major obligations without consent.

Deadlock and Tie-Breakers

For 50/50 deals or evenly split boards, you must plan for deadlock:

• Mediation, then binding arbitration on specific issues.
• A rotating “tie-breaker” right for certain decisions.
• A outside, disinterested third-party who is pre-selected and agreed to.
• A buy-sell provision that can be triggered if deadlock persists.

Deadlock without a resolution mechanism is a recipe for paralysis and litigation.

Information Flow and Accountability

Governance only works if owners and managers see the same picture:

• Regular financial reporting (monthly or quarterly).
• Annual budgets approved in advance; mid-year re-forecasts as needed.
• Clear consequences if the managing partner ignores reporting obligations (loss of authority, removal rights).

Transparency is the backbone of healthy governance.

Conclusion

Control in a restaurant should never be a guessing game. By defining governance structures and voting rules up front, NYC restaurant owners can keep everyone in their lane, maintain accountability, and avoid fights that take focus away from running a great business.