Consumed by litigation, 600 lb gorillas founders Chris and Paula White have stopped making ice-cream sandwiches and cookie dough.
My father had a bunch of saying which have stuck with me for years. Whenever something bad would happen he’d say, “Well it could always be worse.” Whenever I talked about something good happening in the future he’d reply, “Don’t count your chickens before they hatch.” And “If it seems too good to be true it probably isn’t.” A couple of incidents in the news recently reminded me of another one of his favorites whenever I talked to him about business that involved another party’s commitment to making something happen: “Get it in writing!”
The big news item, at least to pro football fans like me, was when Josh McDaniels, the long time offensive coordinator for the New England Patriots, seemingly had left the Pats to join the Indianapolis Colts as head coach. By itself this news didn’t surprise anyone as McDaniels had entertained offers for head coaching positions before.The big surprise to everyone, most especially to the Colts was when Josh announced he had changed his mind and would stay with the Patriots! And this happened the day before Chris Ballard, the General Manager of the Colts, had scheduled a public event to announce Josh as their new Head Coach. It turns out that Josh had never signed the contract the Colts had offered to him, so they had no recourse! Chris, next time, get it in writing!
The other incident was in a Boston Globe article by Janelle Ramos the other day, How the partnership between 600 lb Gorillas and Mister Cookie Face crumbled. It’s a rather complicated story about how two founders were victimized by the failure of a much larger supplier to deliver ice cream that met their standards, which would have allowed them to cut costs, aside from the fact that they received except for the fact that they got tons of complaints from customers that the new ice cream was “tasteless,” “watery,” “awful,” and “kind of icky-tasting,”
Turns out that the entrepreneurs had only an oral agreement with the supplier! Long story short, they are now embroiled in a legal battle: Over the last two years since filing suit, the Whites have been consumed by the litigation and have stopped making ice-cream sandwiches and cookie dough.
So there are not one but three morals to this story: one, despite the fact that oral agreements may be binding in some states, get it in writing! Second, don’t rely on a single supplier that is critical to your business! And finally, if you are a little guy be aware that getting into a legal fight with a big guy means you will lose. They have more resources than you do and will tie you up in court while your business withers on the vine. As one of the founder’s lamented:
“These larger businesses really don’t care, and they think they can get away with whatever they’re doing to a little guy like me,” said Chris. “We gave up decent careers and took a chance on something. This is our livelihood, and we need to get it right. We can’t sell a bad product at a premium price.”