The importance of contracts, in a #nutshell

I look back to 2006, when my twin sister and I had just launched a fresh-not-frozen burrito company. We had a manufacturing partner (co-packer) in Connecticut where we made and packaged our specialty products - crab, shrimp, and veggie burritos. The manufacturer was run by one of our cousin's best friends, and we had a handshake deal. We would make the burritos, teach the crew how to make them once we perfected the production recipe, and sell them to grocery stores, delis, and other customers to heat and serve. We would get paid per case sold. It was a simple business, and one that was moderately successful. We had scored sales to Everybody's (a grocery chain), numerous delis, and our products were the #2 best selling item on their sister-restaurant's menu. Our products were more than good, they were the best. Small batches of lovingly crafted seafood burrito goodness. In the fall/early winter of that year, we had a huge breakthrough. Stew Leonard's (if you're from CT, you know) was willing to BUY our products. STEW LEONARD'S! To say we were ecstatic would be an understatement. We were jumping for joy. We had also jumped for joy when we heard the news about Everybody's, don't get me wrong, but Stew Leonard's has HUGE traffic and has one of the highest profits per-square-foot in the industry. This was life-changing.

Yet our joy was short-lived. You see, the owners of the manufacturing company decided to cut us out of the deal. They said it was their product now, and there was nothing we could do about it. And they were right. We didn't have a contract. We were young, reckless, excited, and inexperienced. In an instant, we had lost everything. The burritos remained in the deli case of Stew Leonard's for some time, but after a while, I stopped checking. I couldn't stomach having my heart ripped out over and over again.

GET A CONTRACT. Protect your dreams. Get every detail of the agreement in writing. I can't stress that enough.

James