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Who owns your restaurant’s recipes?

This post is by SmartBlog on Restaurants and Restaurant SmartBrief contributor Janet Forgrieve.

Two Vietnamese banh mi sandwich shops in New York made news early this year, when the New York Post revealed that a worker had left his job at Hanco’s to launch Henry’s, almost an exact replica of his former employer’s shop. The story made news again this month, when it was featured on NPR’s “This American Life,” which detailed how the new shop had copied the original, right down to the font and color choices on the menu.

The case is an extreme example of what can happen when restaurant owners don’t protect the creations of their kitchens, says restaurant consultant Brandon O’Dell.  Large chains zealously protect their intellectual property and pursue copycats aiming to profit from their concepts, names and products. But independent operators don’t have the same resources.

When a software engineer at Microsoft invents a new program on company time, the rules of ownership are clear — the company owns the rights to the invention. Ditto when an executive chef or culinary team at Domino’s creates and perfects the new recipe that’s going to help the chain reinvent itself. But when a chef working for an independent eatery gets innovative in his employer’s kitchen, who owns the fruits of his labor?

In an earlier case, chef/owner Rebecca Charles of New York’s Pearl Oyster Bar sued a former employee, saying his new eatery copied many elements of Pearl, down to Charles’ signature Caesar Salad. It looked for a time like Charles’ lawsuit might set a legal precedent when it comes to recipe ownership, but the parties reached a confidential settlement last year without going to court.

“I’m not sure [the question of recipe ownership] has ever been decided in a court,” O’Dell says. “That’s why I think it’s extra important to create an agreement, so there is no question. In my opinion, a chef has the right to take along any recipes he created, but also think a chef has an obligation to leave recipes with an employer.”

Small eateries can get proactive with noncompete agreements and comprehensive employment contracts that spell out recipe ownership and what rights the chef who created the dish has to the formula when he or she leaves the restaurant’s employ, O’Dell says. In addition to setting down the issue of recipe ownership, requiring chefs to surrender all intellectual property when they leave and keeping recipes in a book that stays in the kitchen allow an eatery to go on serving the food their guests expect. Combined, the moves may mean the difference between staying afloat and going under when a chef leaves, O’Dell says.

Restaurant owners can also go a long way toward keeping their businesses thriving after a chef leaves by creating a collaborative atmosphere that’s conducive to staff development and instituting systems “where the chef is constantly developing and training the people under him,” O’Dell says.

“Most good chefs do that anyway. Rather than worrying about giving away secrets, they see themselves as teachers. When they leave, they want to leave that restaurant with a system they put in place and people who can carry on. Ideally, when a great chef leaves a restaurant, they have a great sous chef who can move up and take over the kitchen.”

Has your eatery experienced the loss of a chef? How did you carry on?

malerapaso via iStock