Last Wednesday’s New York Times Food section included an article titled “Ex-Partners Fight to Separate the Ingredients”. In it, Glenn Collins chronicled the business divorce ending the BLT restaurant empire partnership between Jimmy Haber and Laurent Tourondel. It’s hardly news that business partnerships can be tough and that the restaurant business is nearly always tough. Instead, two aspects of this conflict intrigued me.
First, the article noted that the partners had “signed a standard agreement” regarding proprietary rights to cuisine that Chef Tourondel created for the restaurant. Business lawyers and consultants often tout partnership agreements that spell out the partners’ understanding at the start of the partnership as some sort of ironclad protection against expensive and damaging conflict in the future. Such an agreement is definitely a good idea, if only to force the partners to spend some time thinking through these issues.
Yet, as the article makes clear, plenty of disputes arise over the interpretation of the agreements or clauses in them. Here, one of the business conflicts is over the meaning of that the clause regarding such proprietary rights, with Chef Tourondel claiming that recipes broadly published can hardly be called trade secrets.
The former partners are now in federal court, fighting over many aspects of their former partnership, despite the initial agreement. Even with an agreement that seems to cover all the bases at the beginning, conflicts can arise. Mediation can help.