The Fresh Loaf

News & Information for Amateur Bakers and Artisan Bread Enthusiasts

Sharing bakery

Gmes's picture
Gmes

Sharing bakery

Hello everyone,

My name is Alex and I'm a cottage food operator in California. I bake sourdough rye bread.

I want to expand my business and found a bakery where I can start baking.

With the owner we discussed two options:

1)

Get my own license and start baking there. The owner has to prepare some documents for that and pay some taxes.

2)

I can start working on owner's licence. All that I need to do it's just add the Bakery's name on my label.

E.G

Bakery "Alex Rye"

Baked in the Smith's bakery.

The second option looks much easier to start for me and for the owner. But we didn't know about it in details. 

What are drawbacks of this option? I only know about insurance that the bakery owner is responsible for my product too.

Portus's picture
Portus

... there is a fine balance between the cost benefits of sharing premises and the risks of sharing “intellectual property”, for the want of a better description. 

 

The former are obvious, whereas the latter are less conspicuous:  potential for treading on toes regards recipes, “passing off” of end products as the other’s (even if innocently perpetrated by customers), professional jealousies, confusion about ownership of raw product, trade mark encroachment, being seen as “embedded” in the landlord’s business, etc.

 

I am sure all these issues have been considered by you, so best ensure the detail is entrenched in a detailed, written agreement, remembering Goldwyn’s (attributed) aphorism that a verbal contract is not worth the paper it’s written on.  Oh, and always include a decent arbitration clause for the cost-efficient resolution of any conflicts!


gerhard's picture
gerhard

I have had people approach me in the past that wanted to use our facility to produce their own product, I have never accepted any of these proposals.  I figure one of the parties will feel they are being short changed, and then if machinery breaks down who's at fault, who is responsible for the cost.  I see it as not being sustainable for any period of time and if you start as friends you probably won't end as friends.

Gerhard

gerhard's picture
gerhard

I have had people approach me in the past that wanted to use our facility to produce their own product, I have never accepted any of these proposals.  I figure one of us will feel they are being short changed, and then if machinery breaks down who's at fault, who is responsible for the cost.  I see it as not being sustainable for any period of time and if you start as friends you probably won't end as friends.

Gerhard