Compensation for brewing beer for a local bar

So I've recently talked to a few people about brewing beer for a local bar, and they would like me to brew my IPA and Heffe recipes for them and private label the beer. My deal is, I want to be fairly compensated for my efforts and potential success. I would also like to retain my recipes, unless of course a solid deal is agreed upon.

So I was wondering if any of you out there have experience with this and what you suggest?

So far I have thought of the following options;

-Hourly Rate
-Percentage of sales
-Buy kegs from me (not optimal)

Is this a brewpub and you would brew on their system? if your just selling them your homebrew in kegs it aint legal without licences and all that stuff

If you believe in your recipes, which I am sure you do, then percentage of sale is the way to go. Also, you should have a contract drawn up for it, so you don't get screwed later, and maybe a "recipe" buyout clause, where they can buy the recipe from you, so you have an "out" if you want.

Orlando

I doubt you could sell the kegs legally without jumping through a lot of Federal hoops.

This isn't a Brewery, but a bar that sells commercial beers? Where are you going to brew the beer? What are the distributor laws in your state. What does OSHA have to say?

bbullock said:

So I've recently talked to a few people about brewing beer for a local bar, and they would like me to brew my IPA and Heffe recipes for them and private label the beer. My deal is, I want to be fairly compensated for my efforts and potential success. I would also like to retain my recipes, unless of course a solid deal is agreed upon.

So I was wondering if any of you out there have experience with this and what you suggest?

So far I have thought of the following options;

-Hourly Rate
-Percentage of sales
-Buy kegs from me (not optimal)

Click to expand...

you would have to become a licensed brewery.

so, whatever it takes to do that

The most beneficial way for YOU to go about this would be for them to become a licensed brewery, and then hire you to brew some batches, therefore allowing you to skip all the licensing procedures because they will do it for you and you will just be an "employee". But, if they are just a bar, with no license to produce, then this is illegal, period, no way around it.

Airborneguy said:

The most beneficial way for YOU to go about this would be for them to become a licensed brewery, and then hire you to brew some batches, therefore allowing you to skip all the licensing procedures because they will do it for you and you will just be an "employee". But, if they are just a bar, with no license to produce, then this is illegal, period, no way around it.

Click to expand...

This for sure. This is only going to be profitable for you if you don't have to jump through all the hoops of getting a license etc. If they are already licensed to brew beer then great, brew for them an an employee if they are not licensed make them go through the time and expense of becoming a licensed brewery.
As an employee you could still write your contract as a hourly wage + % of sales of beer you brew clause. If it were me I'd brew it for them once or twice and then try and get them to buy the recipe from me outright or as a percentage of sales, that way you're earning a continual cash flow without having to work contiually, the chances of them going for this setup are likely slim however.

Also make sure the contract is very clear on the ownership of the recipe a "buyout clause" is a good idea. Keep in mind that under Intellectual Property law anything created by an employee during employment becomes property of the employer unless specified otherwise. So if during your "brewing employment" you scale the recipe or need to alter it for their equipment or change ingredients that new recipe will likely become the property of the brewery and not remain your property unless you specify in your contract any new recipes you create are your property.

Ultimately make sure you trust the people you're working with if you share your recipe and then they take it and screw you over there's very little you can do about it.

And don't get all caught up in YOUR RECIPE. It's not like you have any copyright rights to it or anything and even if you did, they could add on more hop flower or reduce the mash temp by .5 degrees and it wouldn't be 'yours' anymore anyway. It's not really something you can protect without keeping it to yourself.

Legally, there is alot more to selling beer to a bar.

Take MI for example. If you pulled your own micro licence, you need to get it from the state as well as federal authority. Local city or township jurisdiction will need to aprove the licence. Next, local health department will get involved and make sure everything is legit. Brewing in you home kitchen or garage...no way. Not to mention, in order to distribute, you have to first sell to a distributer. So brewing 5, 10 even 50 gal at a time is a waste. Minimum 15bbl to make it worth while. $$$$$$$$$$$$

I know distributing laws very from state to state, but everything else is probly spot on.

Furthermore, if your pulling your own licence, you'ld be better off opening a tap house. Draft craft beer is becoming more and more popular and profitable. (brewing large scale 8-15bbl)

IMO, get some good info at the state level before selling to the bar.