Based upon my business, in which I have a concession agreement with a large hotel.
Here are some questions:
-Is there a need to dissolve your current company? If you are INC or better LLC, you can add a DBA name through your state, and continue to operate without changing a thing. No new books, checking accounts, cc machines etc. In fact, moving into a sub-contractor mode, you will be able to streamline your operations, and reduce your overhead, taxes and liability.
-What about alcohol sales? If they do sell it, are you getting a share of that as well? Will you be responsible for carrying the inventory?
- Even as a sub-contractor, you will most likely still need liability insurance. At least to cover yourself, in case of food borne illness claims. Can you afford it, based upon a 30% cut?
- Will you have an exclusive/no-compete agreement? Meaning, can you do jobs off-site, using their inventory, rental inventory and only use their facility to cook in, and will they have the option to bid out jobs, and you stand the chance of not winning the bid? If they are not willing to enter into an exclusive agreement with you, don't walk, RUN from this place.
- You mentioned employment costs. Now, is your 30% cut after food only, and they are covering employment and all the other overhead from their 70%? Or are they going to factor in their expenses, and only offer you a cut of the "real" profit? If it's 30% after food cost only, you have a deal worth exploring.
- Is the staff, facility, kitchen etc... going to make you look good? If it has the strong potential to damage your personal/corporate image, then perhaps it isn't the right fit for you.
- How many and how much in total sales do they have booked for the next 2 to 36 months? Are they willing to show you the contracts, or is it just conversation? How many sales people do they have seeking out contracts/banquets? If you bring in business, will they be willing to flip-flop the percentages?
I have probably 15 or more questions, and I know how hard you are thinking and trying to see all your options. I will wait for a reply, or you can pm me and we can talk more.
Bottom line, in my opinion of course, is why are you looking to move, if you met the guy under the impression of expanding? If you can afford to expand into a new/larger kitchen, or run 2 kitchens, then the sub-contractor deal is great. If you MUST move/dissolve your existing business in order to GET the sub-contractor agreement, I don't personally think it is worth it. Granted, I know nothing more then what you disclosed in your original question.