What percentage of the profit to give to new partner in a restaurant setting? -

My uncle has a restaurant that needs money for an expansion. He already put in $250,000 and his friend is willing to loan him $50,000 but wants 20% of all future profit?Is his friend asking too much? What percentage is fair to give to his friend for future profits?

No way is that a fair offer. He came to that number because $50K is 20% of the $300K total invested for the expansion. What isn t being considered is the time and energy spent to get the restaurant going to the point of needing to expand. I would say something more like 20% until 50K is paid and then continue paying 20% for 3 or 5 years. But all future profit forever is to much. And he isn t a partner he is an investor . The difference is your uncle still makes all the decisions. Bringing a partner on means someone trying to help make decisions and that really complicates things.

Fair offer.9 out of 10 new resturants fail within 5 years. He is taking a big risk.

I don t think so. Especially his share of the capital is also 20%.