price on a recipe

[Dyce51]

As many of you know I was trying to get my sauces commercially bottled and marketed. Thats not going to happen anytime soon. I have a person who I was going to do a "private label" useing my sauces. I will not be able to do so at this time. He has offered to buy all 6 BBQ sauce recipes and 2 Hot sauce recipes so he can produce and sell the sauces. He told me to figure out a price and get back to him....How do you put a price on recipes?....I am considering it but don't know how to price them....

[AlabamaJack]

Sell him the original recipe's for 35K each (a number i picked out the air) and then get 10% royalties on the NET income the sauces bring. JMHO And don't forget to get it in legalese writing.

[Omri]

Calculate theoretical profit (minus expenses) over a long period of time, and reduce percentages for "Hours of work".
Not so sure I'm fully understood, that's one of those time when my English is just not good enough (sorry).

[bentalphanerd]

hard to put a price on such things. I'd be aiming at whatever you think 'they' can afford to pay. Make sure they are also paying for the contract & your lawyer to look over the paperwork.
And yes, the 10% is a must. Royalties are deserved.

[stillmanz]

Don't sell them you'll only regret it....
he'll either make a fortune and that will piss you off... or.... he'll ruin it or cheapen it down and that may well be worse.

I've sent my sauce to a few sauce makers for them to try see what they think etc only to have them rip off the idea.... it pisses you off... but they will never do it like the original same with this person who wants your recipe... I bet with your recipe when this guy makes it for the first time you'll taste it and it won't be quite like you did.
Just my opinion.
Mick

[BBQ-Phil]

I asked Harald from www.pepperworld.de As soon as I get an answer I let you know.

[thehotpepper.com]

Depends on how attached you are to these recipes. Are they family secrets that have been passed on? Did they take you years to perfect? Are they commercial creations that you whipped up, and do you constantly create new recipes?

[Dyce51]

This particular recipe is a recipe that has been passed down....I modified some to my tastes and it seems that most people who have tried keep comming back for more. I also took the original sauce and made a few variations of it with different flavors...like Sweet Apple BBQ, Bourbon BBQ, etc......as far as I know I'm the 3rd generation to have the recipe....as for creating new recipes....I am always messin around in the kitchen so I create new ones all the time...Right now I'm up to 6 different hot sauces (but only 2 of them are perfected IMO)

[AKButch]

I agree with Stillmanz . . . DON'T Sell IT!!! Especially since it's been in the family and handed down through a few generations.

You will find out it won't be the same as when you make it.

[Canuk Pepperhead]

Man id kill to have recepies like those..ya got them...my thoughts are dont sell just keep to enjoy

[LUCKYDOG]

PM me and I will tell ya if I like it first ;)

[AlabamaJack]

I suppose it is just me folks. But if someone offered me 210,000 USD and 10% net roayalties for 6 recipes.....retirement city......

[chiliman]

I'm with Jack! A big part of what we do, especially if you are considering going commercial anyway, is to sell out to the highest (or only) bidder. I wish I had an idea of how much to ask, but I say squeeze as much as you can, get royalties and get it in writing that they cannot diverge from the original recipe you sold them. You are a sauce guy who will be able to get back in the kitchen and start a whole new list of delicious recipe's with the street cred. of already having sold your original six.

I hope someone on the board can help you achieve a price point and CONGRATS!

Chili Man

[stillmanz]

Heres an example, these two sauces were very good sold in Oz in around 2000 to 2003
He (Ashif) sold out to Byron bay chilli co

ASHIFS CHILLI EXPERIENCE -GOLD R4 160ml $7.50 Habanero, mango, cummin and lime juice. Fast acting kick with a quick recovery so you can go back for more.
This is the Byron bay chilli co sauce our bent reviewed ask him about it.

ASHIFS CHILLI EXPERIENCE -RED R3 160ml $7.50 Rich and thick Louisiana Style sauce (I think there is a little peri peri somewhere in this
sauce's family tree). Good heat and complex flavour
this is the cayenne hot sauce Byron bay co win the big firey food awards in the US with.

So Ashif sells and makes a buck one of his sauce is turned into a flop and the other is a international hit.'
regardless no one remembers Ashif, I still think don't sell.

[bentalphanerd]

ASHIFS CHILLI EXPERIENCE -GOLD R4 160ml $7.50 Habanero, mango, cummin and lime juice. Fast acting kick with a quick recovery so you can go back for more.
This is the Byron bay chilli co sauce our bent reviewed ask him about it.

It is worth keeping in mind that they may turn your amazing old recipe into this : http://www.thehotpepper.com/showthread.php?t=2128

[BBQ-Phil]

So,Mr.Pepperworld answerd me Das Problem ist, dass man Rezepte nicht wirklich schützen kann. Darum liegen die Coke-Rezepte auch in einem streng bewachten Tresor!

Bevor Deine Forum-Kumpels ein Rezept an Dritte zur Begutachtung geben, daher unbedingt ein "Non-Disclosure Agreement" (NDA) unterzeichnen lassen, dass unter Anerkenntnis einer Vertragsstrafe Vertraulichkeit bei Weitergabe oder MIssbrauch zusichert.

Gerade neue Rezepte haben leider meist noch keinen richtign Marktwert - erst, wenn die Produkte eingeführt sind, einen (möglichst geschützten!) Namen haben und möglichst auch schon Awards vorzuweisen haben (Scovies z. B.), ergibt sich ein Wert.

Ein US-Kollege behauptete allerdingsmal, er habe sogar ein Pizza-Rezept für US$ 10k vertickert...

I hope you can translate it....

[bentalphanerd]

Bablefish (http://babelfish.altavista.com/) says:

The problem is that one cannot really protect prescriptions. Therefore the Coke prescriptions lie also in a strictly guarded safe deposit! Before your forum buddy to third for investigation gives a prescription, therefore a "Non Disclosure Agreement" (NDA) to absolutely sign it leaves that under acknowledgement of a contractual penalty privacy assures with passing on or abuse. Straight new prescriptions have unfortunately usually still none richtign market value - only, if the products are imported, one (if possible protected!) Names have and Awards to show to as as possible already have (Scovies e.g.), arise a value. A US colleague stated however times, it had even a Pizza prescription for USS 10k vertickert...


*That helps

[bowhunter]

I agree with Stillmanz. Once he take the love and care that you but into it, not the same. But if you are looking for $$$ and not a good sauce the get what you can plus 10% for life, but again the sauce will not be the same
Dan




LET IT BURN

[AlabamaJack]

Bablefish (http://babelfish.altavista.com/)therefore a "Non Disclosure Agreement" (NDA)

I think that is called a PDA here in the states (Proprietary Data Agreement). At least it is in the aerospace field. Both parties agree to it and sign it...legal and binding...that is supposed to insure the information shared between both companies is confidential and protected and can not be shared with 3rd parties unless it is agreed to by both parties signing the PDA

If more information is required on this, let me know thru PM and I will investigate it further through a friend of mine (lawyer) that works in the data transfer control field.

[Omri]

Called 'NDA' here.

[kato]

I met Ashif a few years back and his sauces were great. I didn't like them as much when Byron Bay took them over.His green condiment was to die for. So i would hang onto them and when you get the chance get back to it. I think you'll be much happier.

Mick
Kato's

[BigNugg]

The sad thing is that you cannot copyright a recipe. You could take a bottle of KC Masterpiece off of the shelf, pay a lab to break it down for you and change the amount of pepper by a teaspoon and call it your own. You have to be able to market and promote yourself, your name & your company better than the next guy in order to succeed. Most non disclosure agreements only protect you in the state you are doing business, make sure that the non disclosure agreement is for anywhere & everywhere. Large companies with the money available, have in the past, taken a clients recipe and produced it out of state under another name, because they have the resources to have it on the shelf before you can even cut the check to have it made. It's a cut throat business and I have learned some very valuable lessons the hard way. Hope this helps a bit.......