Please help! Need to know good amount to give to Silent Partner

[jjchris]

I am starting a new restaurant and am not putting up any cash. I have 2 silent partners putting up 40k each, we ahve agreed they get 10% of the profits. The business should pay them back within 4-5 years and double their money within 10 years...

Now for future expansion, They think they should get 10% of the profits for all future untis too without putting up any additional cash to open the new ones....is this fair? They are co-signing the loans with me. Please offer any advice. Thanks

[Lucas_gm]

I think they have invested to profits and lose and if now the things are going well and venture has an expansion oportunity that could be better done with leverage, should participate too.
Never know things could change and maybe some day yuo could need funding again. Always better keep good people around. Try to do a "Win Win" agreement.

greetings
Lucas.-

[itsjustmoney]

Be careful. If your biz fails they will probably just default on the loans. If it succeeds they will want their 10% each. Essentially they will be getting 10% for putting up no real money and while you run the business.