Protecting Trade Secrets in the Restaurant Industry

It seems like more and more restaurants are built around “celebrity” chefs. Not just household names like Emeril Lagasse or Wolfgang Puck, but other lesser known, yet acclaimed chefs who through marketing efforts become as visible as the restaurants themselves. Chefs’ increased name recognition can drive traffic, but  this comes with a risk: When such a chef departs the restaurant, it can be a challenge to convince patrons that the dining experience will remain the same. While not immediately obvious, restaurant owners can proactively use trade-secrets concepts and laws to address problems surrounding a celebrity chef’s departure.

A very recent example here in Miami shows how. A restaurant group called 50 Eggs Inc. has developed several popular and critically acclaimed restaurants in the Miami area. Relatively recently, 50 Eggs opened Khong River House, which serves authentic Thai cuisine. Leading up to the restaurant’s opening, much of the press coverage focused on the head chef, affectionately known as “Chef Bee. ” Khong River House experienced both commercial and critical success very quickly, including being named as a semifinalist for Best New Restaurant in 2013 by the James Beard Foundation.

This weekend, 50 Eggs and Chef Bee parted ways, as explained in this article. In response to some local media coverage, 50 Eggs’ founder and CEO, John Kunkel, issued a statement that included the following sentence:

While Chef Bee handled interviews about the culinary program on behalf of Khong, our recipes are proprietary and belong to the restaurant and our family of chefs at Khong.

Essentially, Kunkel is saying that even though Chef Bee is gone, the food will remain the same, since the restaurant will still be using the identical recipes. It sounds like 50 Eggs’ contracts vest the ownership of all Khong River House’s recipes with the company, not with the chef. All restaurants should be doing the same thing.

While recipes can be trade secrets, restaurants are not always focused on taking steps to keep them secret, as required by the Uniform Trade Secrets Act. Instead, restaurant owners should have the chefs who created the recipes sign agreements making clear that any IP rights associated with the recipes belong to the restaurant, not the chef. And employees with access to the recipes should sign nondisclosure agreements. With these contracts in place, restaurant owners do not need to rely on the Trade Secrets Act, but can instead simply enforce the contracts.

Then, when a celebrity chef departs, the owner can issue a statement similar to the one used by John Kunkel, which hopefully reassures diners that their favorite meals will remain the same.

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  1. Pingback: Restaurant Noncompete Lawsuit, Part I | Protecting Trade Secrets

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