How do I review a small food processor’s recipes and who knows them?
Ask to see the written recipes and process steps, then watch a batch made from them. Find out who actually knows each recipe, who holds the supplier details and whether anyone besides the owner can make the product the same way each time.
Start with the paper. Are the recipes written at all, and are they complete, with quantities, order of steps, timings and temperatures? Compare the written version with what the cook or operator actually does. If they differ, the real recipe is in someone’s habits, and you need to know whose.
Watch a full batch being made. Taste the result against an earlier sample if you can. Ask how the shop keeps results consistent when ingredients vary from one delivery to the next. Ask which recipes carry the most sales and who could make them if the owner were away tomorrow.
Then look at protection and ownership. Who developed each recipe? Did an employee, a co-packing customer or a former partner help? Ask your lawyer how confidentiality and ownership of recipes should be dealt with in a sale. Check which staff know the secret parts and whether they have signed anything about keeping them private. Plan how to keep key staff after the handover, since losing the person who knows the recipe can matter as much as losing the recipe itself. Also ask about allergens and ingredient substitutions, since recipes change quietly over time. A recipe that has drifted from the written version is a sign the paperwork is not kept current.
Key takeaways
- Compare written recipes with what is really done on the floor.
- Find out who can make each top product without the owner.
- Ask your lawyer about ownership and confidentiality of recipes.
Related reading
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Selling
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentHow to reduce employee turnover
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