How do I make sure I get the recipes when I buy a food brand?
Ask for the formulas, specification sheets and ingredient supplier specifications as named items in the purchase agreement, and have them delivered in writing before closing. In packaged food they are often split between the founder, a co-packer and suppliers, so find out who holds each piece first.
In a restaurant, the recipe may live in a chef’s head and a binder. A packaged-food brand is different. The formulation is usually a controlled document, and pieces of it can be held in several places. A buyer who finds this out after closing can own a name and a label without being able to make the product.
Work out who holds what
Ask the seller where the full formulation sits. It might be the founder, a food scientist who consulted, the co-packer’s batch sheets, or an ingredient supplier’s blend. Ask whether anyone besides the seller can make the product from the documents alone. A formula held only by the co-packer is a dependency you should know about now.
Ask for the full set of documents
Beyond the formula, ask for specification sheets for the finished product, ingredient and packaging specifications, allergen information, process steps, and any lab or shelf-life testing. Ask for the labels and their approval history too. Together they let someone else reproduce the product, and a new co-packer will ask for them.
Put it in the agreement
Have your lawyer list the formulas and specifications as assets you are buying, with a delivery date and a promise that the seller keeps no copies for competing use. Ask whether anyone who helped develop the product, such as a contractor, assigned their rights to the brand. A lawyer can also advise on confidentiality terms for the co-packer.
- The master formulation and any versions in use.
- Supplier names and specifications for each ingredient.
- Written confirmation from the co-packer of what it holds.
- Agreements with anyone who helped develop the product.
For the restaurant version of this question, see do recipes come with a restaurant when you buy it.
Related reading
15 pages on the same subject, grouped by topic.
Buying
- GuideBuying a food and beverage DTC brand in Canada
- GuideBuying a wholesale bakery or commissary kitchen in Canada
- Expert answerWhat should I check before buying a home-based bakery?
- Expert answerWhat should I do in the first months after buying a restaurant?
- GuideBuying a catering business in Canada
- Expert answerHow do I find a sauce company for sale?
- Expert answerAm I buying a sauce brand or a sauce manufacturer?
- Expert answerWhat should I check in a co-packer’s customer contracts before buying it?
- Expert answerWhat am I buying when I buy a co-packing business?
Due diligence
Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canadian Intellectual Property OfficeGovernmentTrade secrets
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Canadian Food Inspection AgencyGovernmentPreventive controls and preventive control plans: Requirements for food businesses in Canada
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