Pennsylvania’s own Lehigh Valley’s Pinnacle Ridge Winery made the cover of this month’s Vineyard & Winery Management Magazine. Noted for its critical acclaim and loyal following, Pinnacle Ridge Winery is highlighted as a model for success for which others can follow. For more information on Pennsylvania’s own, read here: Pinnacle Ridge Winery
Do you already own your own wine or hospitality business and now want to merge your business expertise with those of another? Have you contemplated a new business venture with another business
person that you think offers promise for you both?
Perhaps you’ve identified a potential business partner whose business combined with yours makes practical sense while bringing a new and different business synergy. Maybe you and your new found partner have sketched out a few ideas of what role each of you intends to play in your newly planned business venture.
Conceptually, you may have wisely given consideration to formally executing a written Partnership Agreement. But before proceeding too quickly, you may want to consider another option. Ask yourself, is a Partnership Agreement really what you need?
Maintaining your own business autonomy while still collaborating with your new business partner can be achieved with a different choice. You may want to consider creating a different kind of business marriage by executing a Consulting Agreement.
Let’s say for example, that you’re a wine sommelier. You offer wine knowledge and expertise to a wide range of hospitality and wine business clients for a fee. Your new potential business partner wants to open a new food and wine bar, but lacks your knowledge and expertise of the wine industry. Combined the two of you decide your backgrounds are complimentary and together you can maximize your business opportunities.
However, you may not want to create a business relationship wherein together you share in the profits and losses of the newly conceived food and wine bar. Yet, you want to lend your expertise to the business, get compensated for those efforts, but still maintain your own separate autonomy for your own existing business. In this instance, executing a Consulting Agreement may be the right choice for this kind of business relationship.
Executing a Consulting Agreement allows you to define your terms in advance while assuring the other person that you will provide services to them in a professional manner. In these type of agreements, the responsibilities of the Consultant are defined in writing, identifying the expected work to be performed, anticipated compensation and payment schedules, start and end dates of the work, termination and dispute resolutions for the planned business arrangement.
The Consulting Agreement can set forth whether the Consultant will work exclusively for a single client and in what markets or territories. The Consulting Agreement is also a good vehicle to use to determine whether you and the other party can have a happy business marriage without the financial investment risks that often comes with forming a partnership.
So, when that next proposal for a business marriage with another presents itself, consider whether your winery, wine, event planning or hospitality based business really needs a Partner or a Consultant.
Unfortunately Chile’s wine industry has not escaped the devastating effects of this week’s earthquake. As pointed out in today’s Wine Spectator, millions of liters have been lost resulting in huge damages to the industry. For more information read: Powerful Earthquake Rocks Chilean Wine Industry.
Recently I took an unforeseen hiatus from posting to this blog to tend to the needs of my oldest child
who was recently injured this January in an automobile accident at the hands of a drunk driver. Like most of the mothers of MADD, I too experienced the anguish that comes with that dreadful night in the emergency room, waiting 40 minutes for a simple word from physicians in what felt like a lifetime of silence as to whether my child was to live or die, while the drunk driver walked away with little more than a scratch.
It’s horrible to be in a position wherein despite the fact my daughter suffered a brain hemorrhage, short term memory loss, a fractured skull, broken nose, broken ribs, loss of teeth, and deep facial lacerations, I was relieved to hear the words “she’s on a ventilator, but is expected live”. Two surgeries later, our family is blessed to have her home and recuperating. While her total healing process is expected to take 12-18 months, there are huge economic and emotional losses to recover from as well.
After having lived through this dreadful experience, spending many nights at her hospital bedside and wondering what words of comfort to offer her children who looked to me for words of hope, I am compelled now to post for the benefit of my winery, restaurant, and hospitality business readers how you may protect your business and life’s work from the risks and hazards that come from dealing with visibly intoxicated persons who senselessly create liability for your business. If you do not want to be in a position of having to “lawyer up”, let’s now visit what is important for you to know.
The Dram Shop Law in Pennsylvania makes it unlawful to serve liquor, malt, or brewed beverages to “any person visibly intoxicated”. Dram Shop is third party liability law which makes it possible for 2nd and 3rd parties to sue any person for a death, injury, or property damage. Establishments licensed to sell and serve alcohol are commonly referred to as “dram shops”. These establishments or “dram shops” are liable to third parties for damages inflicted by customers of the establishment, if the customer was sold, furnished or given liquor by the establishment when the customer was visibly intoxicated when served. Selling alcohol to a minor, selling to a visibly intoxicated person, selling alcohol after hours, or selling without a liquor license is unlawful in Pennsylvania. This Dram Shop statute is designed to protect the public at large as well as the person who consumes the alcohol.
If you’re a winery owner on a wine trail for example, and a VIP or “visibly intoxicated person” comes to your winery as well as several other wineries on the trail, and is involved in an automobile accident resulting in an injury to a third party, you and your business are now in the “hot seat”. The same is true if you are a restaurant or bar owner serving bar-hopping patrons who later leave in a drunken state, and kill themselves and or others. Because your establishment can be held liable for injuries it is in your best interest to be diligent in ensuring that intoxicated persons are not served more alcohol. In order for liability to attach, you must have actual knowledge or notice of a customer’s condition before liability is imposed. Thus its important to have your servers trained in alcohol awareness and to teach your staff the obvious signs of intoxication such as staggering, slurring words, loud speech, drinking too fast, etc. and even the more subtle signs that the untrained eye might not see. This kind of evidence helps to dispel the implication that a patron was served while visibly intoxicated.
The Pennsylvania Liquor Control Board created the Responsible Alcohol Management Program (RAMP) to help liquor licensees and their employees to serve alcohol responsibly. Ramp offers advice to restaurants, winery owners, hotels, clubs, distributors and special permit occasion holders to learn to avoid unnecessary liability and to detect signs of impairment and intoxication.
So as to avoid having your winery or hospitality business “lawyer up” in the face of such dreadful outcomes at the hands of intoxicated persons, protect your business and your life’s work by being vigilant in the sale of alcohol and the persons you hold accountable for seeing that your patrons drinking responsibly.
This week I had the pleasure of being invited by Dominic Strohlein, owner of Big Creek Winery to be the guest speaker to the membership of Pennsylvania’s Lehigh Valley Wine 
Trail Association. It was a wonderful time starting the new year in their company as they hosted their first of many membership meetings held annually throughout the year.
We used our time together having a very healthy exchange discussing Pennsylvania’s Dram Shop Law. We discussed issues of premise liability and its impact on winery and vineyard owners. In Pennsylvania, the laws that govern servers of alcohol, if violated can result in very costly lawsuits. Thus, the manner in which each winery owner can best protect themselves in various environments including the tasting room, wine festivals, wine events, tour group events and commercial carriers can be very complex waters to navigate. Too, we considered how managing potential risks and hazards can be minimized with proper training and knowledge in order to avoid unlawful acts of alcohol service to “minors” or “any person visibly intoxicated”.
The Lehigh Valley Wine Trail Association is home to nine family owned vineyards and wineries located in eastern Pennsylvania. Designated an American Viticultural Area (AVA) in 2008, Lehigh Valley is Pennsylvania’s fasting growing wine region in the state.
The Lehigh Valley Winemakers include:
Amore Vineyards & Winery
Franklin Hills Vineyard
Sorrenti’s Cherry Valley Vineyards
Big Creek Vineyard and Winery
Galen Glen Vineyard and Winery
Blue Mountain Vineyards & Cellars, Ltd.
Pinnacle Ridge
Clover Hills Vineyards & Winery
Vynecrest Vineyards & Winery
I found the Lehigh Valley Wine Trail Association membership to be very proactive in their efforts to keep abreast of new trends and changes in the law so as to conduct their winery and vineyard operations as responsible licensees in their community.
Pennsylvania is home to 11 wine trails throughout the state. This year, as your wine trail association gathers to meet and exchange ideas, you too may want to start your year anew considering how best to protect your winery operations as responsible licensees in your community.
As you usher in your new year and embark upon your Pennsylvania wine country travels, perhaps you’ll head out to eastern Pennsylvania and check out the wineries on the Lehigh Valley Wine Trail. I’m certain you’ll have a wonderful wine experience.
Thank you again Lehigh Valley Wine Trail Association for the opportunity to meet and speak with you.
Happy New Year to you all!
As a graduate of Windows of the World Wine School, how excited I was to see that my friend and teacher Kevin Zraly was on the “Early Show” this morning offering tips on champagne. I couldn’t let 2009 go out without sharing this episode with all my friends, legal eagles, followers and fellow bloggers. Season’s Greetings to each of you and have a wonderful prosperous Happy New Year!! Enjoy!!
Watch CBS News Videos Online
This fall while on the Bucks County Wine Trail one of my fond memories of the Buckingham Valley Vineyards was the opportunity I had to experience a tasting of an oak aged dry Chambourcin wine. This delightful grape is readily becoming known as “Pennsylvania’s Zinfandel”. This versatile hybrid grape is known to hold up very well in Pennsylvania’s cooler wetter climate. Its a deep colored wine with full aromatic flavors that I plan to pair with my meal festivities this holiday. You too may want to grab yourself an “East Coast Red”. For more information about this grape that is widely becoming known as “Pennsylvania’s Zinfandel”, I enjoyed reading the Times-Tribune.com’s article: Is Breakout Grape Chambourcin Pennsylvania’s Red?
You’ve likely heard the saying “a rose by any other name is still a rose”. Well in a way that can be true in the
business world as well. Especially if you are considering giving your business a “fictitious” name.
Before establishing your winery, wine or hospitality based business, you will want to consider what name to use when forming your new Corporation or Limited Liability Company. While many business owners choose to operate their business under the name they put in their state filed Articles of Incorporation, you may choose for marketing purposes to operate your corporate entity under a name that’s different from the formal name listed in your Articles of Incorporation. Perhaps you have a catchy name in mind for marketing purposes. Or your own name is too long or not savvy enough for purposes of building your brand. If so, consider a “fictitious business name”.
For example, your may be planning to operate a wine event planning business under the name “John Rose Wine Events, LLC and subsequently plan to do business under that name. Alternatively, some business owners like to operate their corporations under a name that’s different from their individual name or formal legal entity name identified in their Articles of Incorporation. This is what is known as a “fictitious business name” or “dba” doing business as name.
For marketing purposes you may prefer to identify your business as “My Wine Sommelier”. Thus, you might alternatively establish your business name as “John Rose Wine Events, LLC, dba My Wine Sommelier.” You could then market your business as “My Wine Sommelier”.
In order to do so, most states require your corporate entity to file a “fictitious” or “assumed” business name and pay a fee. This legal filing allows creditors, customers, and vendors to know that your business operates under a “fictitious name” yet they are still able to identify you as the business owner. In order to protect your chosen name and establish exclusivity, you may consider registering your chosen name as a trademark.
So now, can a rose by any other name still be a rose? Well yes it can. Consider a “fictitious business” or “dba” name and you too could be the next “My Wine Sommelier”.
Do you dream of opening your own winery, vineyard, restaurant, bed and breakfast, catering, wine-based or hospitality business? If so, it is important for you to choose the correct legal structure that’s right for your business.
In this series on forming your business entity, we previously considered the “Sole Proprietorship” , “Partnership” and “Corporation” as business entities. Knowing and understanding how each of these legal structures work enables you to carefully decide what legal structure is right for your dream business. In today’s post, we will consider forming the “Limited Liability Corporation”.
Limited Liability Corporation
The Limited Liability Corporation or LLC is a hybrid flexible form of business entity often recommended for a new winery, wine based, or hospitality business. How LLC’s are treated for federal and state tax purposes typically depend on the entity’s classification as either partnership or corporation. The properly structured LLC offers the combined benefit of both the liability protection of a Corporation and the favorable tax treatment of a Partnership. The owners of a LLC can report business income, losses, credits and deductions on their individual income tax return. Thus, the business entity itself does not pay income tax. This can be a tax savings where the owners rates are lower than the corporate income tax rate. Because there is no entity level tax, the LLC owners avoid the double taxation on monies that are distributed to its owners that often occurs with a C-Corporation.
A LLC owner is provided limited liability for its debts and obligations. Much like the Corporation, the LLC owner is generally limited with respect to tort liability. Each member is allowed to manage and control the business without risking loss of the member’s limited liability.
Forming a LLC involves filing Articles of Incorporation with the Corporation Bureau of the Pennsylvania Department of State. A formal written Operating Agreement is recommended which sets forth the LLC’s corporate governance provisions, including but not limited to, voting rights, shares, profit distributions, management structure, ownership and buyout schemes.
As discussed in the earlier posts of this series, different business structures provide different risks, protections, and ease of administration. What wine or hospitality business are you creating?
Pennsylvania’s wine and grape industry continues to be a major contributor to the economic strength of the State. The results of the latest update of the MKF Research Study, an independent study commissioned by the Pennsylvania Winery Association indicates increased growth in the industry during the two year period between 2005-2007. Pennsylvania’s rank in wine production moved from eighth to seventh place among wine producing states in the United States. For more information read: Wine and Grapes Enrich Pennsylvania’s Economy.
