How do I check a taproom’s recipe records and batch logs before buying?
Ask to see the recipe sheets and a run of batch logs, and check whether they match. Good records show the same ingredients, steps and results from batch to batch, with notes on problems. Gaps, missing dates or recipes that live only in the brewer’s head are the warning signs.
Request the written recipes for every beer on the list, including seasonal and one-off brews. Then compare them with the batch logs. Do the logs record ingredients, temperatures, timing and quality checks? Does what was brewed line up with the recipe? Differences are not always a problem, but you should know why they happen.
Look at what the logs say about problems. Records of off batches, dumped beer or changed recipes show how the brewer responds. A log with no failures at all may be incomplete. Ask whether the brewer is staying, because the recipes may depend on that person’s judgement more than the paperwork shows.
Cross-check the logs with the books. Volumes brewed should roughly fit the sales and ingredient purchases in the financial statements. If the numbers do not tie, ask why. Your accountant can help you read the two together. Finally, settle ownership. Ask who created the recipes and whether the brewer has any claim to them. The purchase agreement should list what you receive, and your lawyer can tell you how to make sure the recipes transfer cleanly. Keep copies of the sheets you review, so that you can compare them with what you receive at closing.
Key takeaways
- Compare the recipe sheets with the batch logs and ask about any differences.
- Check that volumes brewed fit the purchases and sales in the financial statements.
- Confirm who owns each recipe and whether the brewer is staying.
Related reading
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Canadian Intellectual Property OfficeGovernmentTrade secrets
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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