Sonora Grill: How Microentrepreneurs Create a Thriving Small Business with Business Law Pro Bono Help

This is the last of a four part series of pro bono client stories that show how business law lawyers have helped people struggling to participate in the market economy obtain economic justice or at least access to economic justice through direct legal services to people and/or or nonprofit organizations of limited means who provide services to individuals of limited means. 

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Over the past four years, a team of business law lawyers from Minneapolis, Minnesota have helped two friends, Alejandro Castillon and Conrado Paredes, start and grow their successful restaurant concept. Today, Sonora Grill operates in two locations and employs more than 40 people. When the friends originally teamed up with their business law pro bono legal team, however, the friends had no money and little more than a business plan and a dream of opening a fast-casual food stall located in the Midtown Global Market in Minneapolis serving a fusion of Spanish and South American cuisine with influences from Alejandro’s and Conrado’s native Sonora, Mexico. Located in a repurposed former Sears store, Minneapolis Midtown Global Market is an internationally themed market with groceries, food and gifts. According to its own literature the Midtown Global Market gives new and emerging entrepreneurs, many of whom are low income and recent immigrants, a prime location and support to build a business and future – for themselves, their families, and their employees at the same time making the surrounding neighborhood safer and healthier.

Much like any other start-up business enterprise, these micro-entrepreneurial friends needed to consider and understand the tax and legal implications of their business enterprise. During the business formation process, pro bono business lawyers worked closely with Alejandro and Conrado on entity selection and formation issues along with joint ownership and tax issues. Recognizing the importance of educating the new entrepreneurs on the legal risks and obligations of business ownership, the pro bono lawyers counseled the pair on the details of limited liability, maintaining corporate formalities, and keeping accurate records. In addition, the pro bono lawyers counseled the pair on all the legal and tax implications of operating a for-profit business that employed people and sold goods and services into the stream of commerce. These issues included sales and use tax; local, state and federal employment law and tax law issues; as well as legal issues related to equipment acquisition and financing. Once the new business enterprise was incorporated, Alejandro and Conradro hit the ground running, with their highly successful Sonora Grill food stall receiving much acclaim for its food as well as its contributions back to the community.

With one successful location operating, Alejandro and Conrado turned their sights to an even more ambitious dream: owning a full-service sit-down restaurant serving upscale food and beverages. They turned back to their one-time pro bono business law lawyers for assistance with the new concept and location. Although opening a second location was a great opportunity, the pro bono business law lawyers counseled the pair on the need to protect themselves and the first location from any liability that could arise out of the operation of the second location. After much discussion and weighing different options, a second entity was formed for the second location.

Because the second location, unlike the first, was to be a full-service sit-down restaurant with a full-service bar, Alejandro and Conrado needed to lease a new space for the restaurant and hire many more employees. Several pro bono real estate lawyers worked closely with Alejandro, Conrado and the landlord to reach agreement on building out the new space, an agreeable rental price, and protecting the new restaurant from any issues with the space. The real estate attorneys, relying on their experience representing a national restaurant chain in complex lease issues, were able to negotiate favorable lease terms with specific provisions for operating a restaurant at the location. After many months of planning and renovations, a second Sonora Grill location opened in 2013. What was once a long-vacant building is now home to a vibrant business that employs more than 40 people and has contributed to the revitalization of the Midtown neighborhood in Minneapolis.

Alejandro and Conrado have enjoyed much success as both business owners and entrepreneurs. Sonora Grill recently won the 2014 Employment Impact Award from the Neighborhood Development Center, a community and economic development organization based in Minneapolis, recognizing the job-creation efforts of the business and its owners. Both Sonora Grill locations have received high praise from customers, critics, and the local media. Fredrikson attorneys continue to work with Alejandro and Conrado on Sonora Grill day-to-day legal issues and hope to be part of their next endeavor on a billable basis.

Tom Archbold, a corporate and commercial law lawyer, worked closely with Alejandro and Conrado. “It has been very rewarding for me as a business lawyer to work with Alejandro and Conrado as they initially started their Sonora Grill restaurant and then again when they expanded to a second, larger location,” Mr. Archbold said. “Alejandro and Conrado have a great concept, an entrepreneurial spirit, and they have worked very hard to develop their business. I’m very proud to have been a part of the process.” Business law attorneys work on complex transactional matters every day, but for many none are more rewarding than helping their pro bono clients achieve their dreams, build businesses, and achieve sustaining economic and personal success.

Levi Smith is a corporate attorney at Fredrikson & Byron, P.A. and a 2014 graduate from the University of Michigan Law School.

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