Wednesday, December 19, 2012

More Business Wisdom (And Being Right) From Chef Gordon Ramsay

Somewhere in my past blogs or articles I’ve sung the praises of a TV show both on Fox and BBC America called Kitchen Nightmares with Chef Gordon Ramsay. Well he’s come through again, this time focusing on the rather questionable business practice of suing your way to wealth and riches, or attempting to. Kitchen Nightmares (KN for short) is a reality show that presents the viewers with dysfunctional restaurants where the owners have asked Chef Ramsay to come in for several days to help turn the situation around. As I’ve said before, it could teach many other business owners a thing or two. Complicated menus, poorly managed kitchens, lousy service and marketing skills can translate into trying to do too much (and badly), improper inventory control, and lousy service and marketing in other businesses too. Ramsay’s solutions are often very transferrable to any other business. The other night featured a restaurant in Baltimore called Café Hon. “Hon” is apparently a local expression used by and for middle aged Maryland women as a term of pseudo-endearment I guess…something similar to “darlin’” in Texas or “love” in the UK. Somewhere along the line it seems the owner got to talking to a legal firm about copywriting the term “hon” and the effects were disastrous for her restaurant. One might wonder how the sleazy legal firm profited on this, but that issue wasn’t covered. Other businesses using the expression in their ad campaigns or marketing were sent “cease and desist” letters. Their outrage over being told not to use a word that certainly pre-dated the restaurant itself spilled over to their customers. In effect, a boycott of sorts was on. Remember Donald Trump’s attempt to commandeer the phrase “You’re Fired” a few years ago? Just because it was a catch-phrase of his TV show The Apprentice, does anyone other than himself think he had any right to it? And that he’s entitled to compensation for it? Wonder if this has anything to do with his somewhat spotty public image in recent years… America has a lawyer for every 50 citizens or something like that. Whatever the figure, it far outpaces the rest of the world…and I do hope this is something the rest of the world avoids copying. The nature of our litigious society has been one of the many major reasons it has become more difficult to do business in what was once the largest, freest market in the world. Having a Congress and Government Bureaucracy made up overwhelmingly of lawyers and legal grads doesn’t help. How does this affect the independent sales rep? Well, it’s something you have to be aware of at all times. When you pick up a new line ask the vendor if all his/her legal “I”s are dotted and “t”s are crossed. Form an LLC for yourself so that you don’t become the subject of a lawsuit targeting you personally. On the other hand, what to do about protecting your own interests? We can’t go into too much detail here because situations will change in each case. But if it could be boiled down to the essence, I’d say here is the rule of thumb: If you genuinely created a product or intellectually unique ‘thing’, get it protected. If you are working with a lawyer to try to find something you can take over the “rights” to and just sit back and make money by suing people or settling out of court, then you are not a businessman. You are a slug who’s not worthy of the name and title of being a businessman. Making money selling your goods or services, is the right thing to do. And come Judgment Day something tells me “right” will be favored over “legal”. It’ll be seen below that Café Hon learned that “right” wound up being better for their business than “legal”. In one of the industries I serve, there is a major manufacturer who’s taken the “lawsuits to riches” route. This company tried to sue half their respective industry a few years ago, claiming copyright infringement pertaining to the appearance of other products in the industry. The decision came down that since the founder of the company did not take the time to copyright this aspect some decades ago, they had no case. The rest of the industry breathed a sigh of relief. But there is still one part of the products this company makes that ARE protected. And that enables their legal team to work full time looking for things like art, t-shirts, posters, figurines, etc. where they can threaten and bully those companies or individuals trying to use such art or design. The art need not even have the familiar company logo anywhere to be found—the product can be identified and claimed as theirs if one small part of the item in question matches their design. Think of the familiar Coke bottle logo shape and you get the idea. One result of this is the discontinuation of several products in a line that I sold into a chain of 100 stores. My vendor could have altered their design a little bit to comply. I offered to get them in touch with the attorney that successfully defended the industry-at-large against this corporation, but they just did not want the hassle. This decision meant less work for workers, fewer products for consumers, fewer profits for the retailer…and less sales for the sales force, me included. Hopefully with a generation raised on the internet, the whole idea of open source design will be more conducive for future competition and economic growth. The monster that they must counter is the trend toward companies, and more scary, legal firms, buying up patent rights just so they can quash anyone who comes along with a better idea—even if the products don’t look or act anything like each other! In most of these situations, the company or legal firm had nothing to do with building or creating the product to which they have legal title…indeed, they usually have no intention of ever doing so! This development is perfectly legal—it’s something the legal profession thought up after all. But that doesn’t make it right. Back to Café Hon and their story on KN: The owner, alongside Gordon Ramsay, appeared on local radio in Baltimore to apologize, to drop all suits, and to promise not to pursue any other suits by relinquishing her claim to the word/phrase “Hon”. The restaurant started to rebound and hopefully all will end happily ever after. It’s only lawyers who get work issuing “cease and desist” letters to manufacturers and budding entrepreneurs. Their work, while sometimes just and worthy, is instead becoming increasingly a barrier to an economy that cannot take much more blows. And, it takes work wealth away from others who can build on it. Lawyers don’t build or create wealth. They confiscate and retard it. I’m sure Café Hon would now rather have their customers go home on full stomachs while their cash registers are full, than be proud of a claim to some phrase legally all their own. There’s something right about full stomachs and full cash registers, don’t you think?