For more than two hundred years investors have publicly traded stocks and bonds. But those types of investments have their limitations, leading savvy investors to alternative securities for the purpose of generating income, diversifying portfolios, boosting returns, or raising funds for other projects. These alternatives include real estate, stock or membership units in privately-held businesses, private equity, commodities, venture capital, farmland/timberland, mineral rights, tax lien certificates, hedge funds, annuities, art and collectibles, or even wine collections or antique coins. In short, a multitude of investment options are available beyond the floor of the New York Stock Exchange. Why do people invest in alternative securities? Some of the most prevalent reasons include favorable economic conditions, less dependence on typical market fluctuations, leveraging specific knowledge or skills, tax advantages, illiquid investments, higher fees, and market volatility.

Restaurant Shares is engaged in the business of developing, investing in and managing a diversified portfolio of food and beverage businesses, restaurant franchises, joint venture equity investments, and other hospitality related assets that are compelling from a risk-return perspective. We intend to focus particularly on businesses located in the Sun Belt, which is a region that stretches across the Southern and Southwestern portions of the country from Florida to Arizona. These states include Florida, Georgia, South and North Carolina, Texas, New Mexico, Louisiana, and others.

Like all businesses, Restaurant Shares makes money by selling more product than it spends. This requires keeping the prices of our menu offerings high enough to more than cover the cost of goods sold (COGS) and labor costs, which together make up a restaurant business's prime costs, along with rent, utilities, and other restaurant operations related expenses.

We believe in complete transparency and communication with our investors. Restaurant Shares will make announcements and updates to its shareholders either quarterly or bi-annually, depending on the amount of activity. These communications will either be in the form of a newsletter, conference calls, and/or in-person meetings when possible. We consider our investors to be business partners, and as such, we will do our best to provide regular updates to keep our investor community abreast of our business operations.

Restaurant Shares, together with an SEC registered broker-dealer, provides a platform for our restaurant businesses to find potential investors. During the course of our business, we will engage with an SEC registered-broker-dealer and pay placement fees/commissions. We may also incur expenses for specified services, including legal fees, marketing fees, transfer agent fees, accounting, and technology fees. Restaurant Shares will reimburse expenses to its officers for expenses incurred on its behalf.

According to Rule 301(a), intermediaries must conduct due diligence to have a reasonable basis to believe an issuer will comply with the requirements of Section 4A(b) and Regulation Crowdfunding. An issuer must also have established means of keeping accurate records of the holders of securities. The broker-dealers we work with reserve the right to question or request additional materials to establish the reliability of our representations. According to Rule 301(c)(1), broker-dealers bear anti-fraud responsibilities and therefore must conduct background and securities enforcement regulatory history checks on us and our officers, directors, and beneficial owners of 20% or more of the issuer’s outstanding voting equity securities--calculated based on voting power.

Rule 301(c)(2) requires that if a broker-dealer acquires additional information indicating an issuer or its potential offering might have a risk of fraud or lack of investor protection, the broker-dealer must promptly remove said issuer’s offering, cancel it, and return or direct the return of any committed funds.

Issuers and certain other people may be the subject of certain disqualifying events during the last 10 years, in which case Title III may not be used. “Certain other people” includes any predecessor of the issuer; any director, officer, general partner, or manager of the issuer; a person owning 20% or more of the Issuer’s voting power; any promoter associated with the issuer; any person who will be paid for soliciting investors; and any general partner, director, officer, or manager of such a solicitor. “Certain disqualifying events” involves improper actions in the securities business such as the conviction of a felony or misdemeanor in connection with the purchase or sale of any security or the loss of license of a securities broker for misconduct, among other “bad actor” incidents.

All financial statements must be prepared in accordance with the United States government’s “generally accepted accounting principles.” Financial statement reviews must be conducted in accordance with the Statements on Standards for Accounting and Review Services issued by the Accounting and Review Services Committee of the AICPA. Financial statement audits must be conducted in accordance with either auditing standards of the AICPA or standards of the Public Company Accounting Oversight Board.

After one invests in an issuer, we are generally required to file either quarterly or annual reports with the SEC and make them available online. An annual report will typically include:

- Updated financial statements certified by an executive officer (while reviewed or audited financial statements are not required, if reviewed or audited financial statements are available then they must be provided)

- Disclosure and updates about the issuer’s financial condition

Before investing, we must provide investors information on Form 1-A. This information includes information about our company, including the our principals, executive officers, and directors; the principal occupation and employment for the last three years of each director and officer; the names of each person owning 20% or more of the issuer’s voting power; the specific investment’s risk factors, the issuer’s business and business plan; in what ways any proceeds of the offering will be used; the issuer’s ownership and capital structure; how rights exercised by the issuer’s principals can affect investors; compensation paid to broker-dealers for each offering; a description of previous offerings issued by the issuer; whether the issuer has previously failed to file any reports required by law; transactions with officers, directors, and other “insiders;” whether the issuer would be disqualified from offering securities under the “bad actor” rules, if the effective date of those rules were different; the issuer’s financial condition: how over-subscriptions will be handled; where and when annual reports are posted; financial information about the Issuer, and any other necessary information.

Investing in restaurants comes with risks. Prior to making an investment, therefore, carefully consider any risks and whether you are prepared for them. Each investor should consider consulting a professional before investing to understand and assess all the risks involved, including legal, tax, and monetary risks. If you think your level of investment is not worthwhile to hire an advisor, you will be solely responsible for your investment decisions. Investments always carry risks, therefore you are strongly advised to make sure you are able to afford losing your entire investment.

Some risks that come with restaurant investments include, but not limited to:

We are an early-stage company, with a limited operating history. We were organized as a Nevada corporation in October 2019. We have a limited history upon which you can evaluate our business and prospects. Our prospects must be considered in light of the risks encountered by companies in the early stages of development in highly competitive markets, particularly the restaurant franchise market. You should consider the frequency with which early-stage businesses encounter unforeseen expenses, difficulties, complications, delays and other adverse factors. These risks are described in more detail in our offering memorandum or prospectus.

Our future growth depends on our ability to open new restaurants in new markets, which is subject to many unpredictable factors. We may not be able to find new, qualified restaurant or franchise partners as fast as planned. Our ability to open new restaurants is dependent upon a number of factors, many of which are beyond our control, including our ability to:  

- Identify restaurant opportunities suitable for the markets we want to enter;

- Identify available and suitable restaurant sites;

- Compete for restaurant sites;

- Reach acceptable agreements regarding the lease or purchase of locations;

- Obtain or have available the financing required to acquire and operate a restaurant, including construction and opening costs, particularly in competitive markets;

- Respond to unforeseen engineering or environmental problems with leased premises.

- Lack of professional management: many small companies are managed by founders, and while the founder may have strong technical skills and experience, he or she might not be an effective leader with managerial experience or management skills

- Limited products and services: many companies have core products on which they focus. Failing to adapt these products and services to the changing needs of consumers, continual advancement of technology, and intense competition from other companies could cause a company to fail

- Lack of access to capital: Without adequate capital, companies can accumulate debts and eventually fail financially

- Lack of accounting controls: smaller companies typically lack controls that prevent theft, embezzlement, and accounting fraud, leaving them exposed to additional risks

- Lack of technology: many small businesses cannot afford technologies that help them cut costs and make operations more efficient

- Cash flow shortfalls: if a business fails to generate enough money to meet payroll, it might not meet its payment obligations to investors

- Competition: smaller businesses face competition both from big corporations and from other businesses, which can cause a company to be out-competed and thereby fail

- Inability to sell your investment: Shares in our company may not be liquid. Be prepared, therefore, to hold your investment for its full term

- Change in economic conditions: unfavorable economic conditions could hurt an issuer’s business and thereby its investors

- Uninsured losses: a company might have inadequate insurance to guard against risks, whether because it cannot afford insurance or does not know enough about insurance. There are also some risks that are nearly impossible to insure against at a reasonable cost

- Unreliable financial projections: while issuers provide financial projections that reflect what they assume about future financial conditions, it is nearly impossible to have accurate financial projects, especially for startups

- Changes in laws: Changes in laws or regulations could hurt many companies. Companies have little to no control over how new laws will affect their business

For more information regarding the risks, please review the offering memorandum prior to making an investment.

Restaurant Shares offers equity and debt securities. Consider consulting a professional before investing in a security to learn about and assess its specific risks. Here are the securities we offer and their associated risks:

Equity securities: An equity security, such as the common or preferred stock of a company, makes you a joint owner of that company. As an owner, you have the right to share in any profit distributions and also share in the company’s value appreciation. There are, however, some risks involved with holding equity, including but not limited to:

- Loss of your investment: if a company dissolves, you are paid after all the creditors, meaning there may not be any money left to pay investors after debts have been paid. Thus, you can potentially lose your entire investment

- No dividends: an issuer might not plan to issue dividends. Additionally, a business might not generate enough profit to issue dividends

- Subordination to creditors: in the event of bankruptcy, creditors are paid first and can go after a company’s assets until debts are satisfied. As an investor, you are paid last, meaning there might not be any money left to pay you and other investors

- You may not be able to sell the securities: highly illiquid securities may not find any secondary market on which to be sold. Additionally, securities might have other restrictions that prevent you from transferring them to another investor

Debt: debt securities, like promissory notes and bonds, allow you to be paid before equity investors in the event of the company’s bankruptcy. A debt based offering is often term loans. These loans can pay any amount of interest or not pay an interest. Many different structures for debt securities exist. You should therefore strongly consider learning about a particular security’s risks before investing. Some risks associated with debt securities include:

- Repayments and payments are not guaranteed: while you, as a creditor, have payment priority if a company dissolves, a company may simply not have enough money to pay its debts

- No third party credit ratings: credit ratings are designed to help investors gauge the risks of a debt security. Securities on our Portal might not be rated by rating agencies such as Moody’s and Standard & Poor’s, leaving investors with little to no objective measure to judge the company’s creditworthiness

- Interest rate might not adequately compensate your risks: chances are that the interest you will earn does not adequately compensate the level of risk you are taking

- Lack of security: a promissory note may or may not be secured by property, such as an interest in real estate or equity

First, create and verify an account on Restaurant Shares. We may or may not ask for your proof of income to determine your investment limit. You can then browse our investment opportunities and consider which offering(s) to choose for your investment. You should strongly consider consulting a lawyer or professional advisor prior to investing to understand and assess any and all risks that come with a particular offering. You can then choose to invest in your selected offer(s) and pledge a dollar amount to the offer(s). By choosing to invest in an offer, you acknowledge the risks that come with investing in restaurants and are able to afford losing your entire investment should the issuing company file for bankruptcy.

Once your purchase of security is completed, we will send you a confirmation email with details about the offer and your investment; this email will serve as proof of your purchase. We are also required to keep records of investors.

The SEC requires any amendment to an offering be reconfirmed with outstanding investment commitments within 5 business days; if we fail to do so, or you as an investor fail to reconfirm your commitment, your commitment will be considered canceled. We must also file Form A to disclose changes or updates with the SEC.

You can cancel an investment commitment at any time up to 48 hours before the offering deadline. If you make an investment commitment within 48 hours before the offering deadline, you cannot cancel your investment even if you have just made your commitment.

If you successfully cancel your commitment, we will refund the investment amount to you. This refund process can take as many as 14 days.

After buying a security, you may not be able to sell your investment unless a secondary market is established, you are transferring back to the issuer, as part of an offering registered with the SEC, to a family member or trust created for a family member’s benefit, or in connection with death or divorce. “Family member” encompasses spouses, children, stepchildren, grandchildren, parents, stepparents, grandparents, siblings, and in-laws.

If our offering has more investors than needed or we reach our target(s) early, we will prioritize investors with a larger investment amount. While rare, we may choose to reject or cancel your investment.

A third-party credit rating is not required. Investors therefore have little to no objective measures to gauge our company’s creditworthiness. You are strongly advised to conduct due diligence prior to making an investment commitment and to consult with a professional advisor to understand and assess all the risks associated with making a particular investment commitment.

Yes, unless your country’s regulations forbid you from doing so.

It could be a short time, a long time, or never. Investing in restaurant companies through Restaurant Shares involves high amounts of risk. We therefore strongly recommend investors consult with a professional advisor prior to making an investment commitment. You must understand and assess the risks involved with your investment. There is no guarantee any companies in which you invest will make a profit. You might lose your entire investment if a company files for bankruptcy.

A fundraising round may close earlier than its published deadline on the offering. In this case, you will receive a notice of the new deadline at least 5 business days prior to the new deadline. The SEC requires that if we fail to reconfirm investors’ investment commitment within 5 business days of an offering’s changes, the investment commitment is considered canceled.