If you operate or soon plan to operate a startup brewery and are considering where to allocate your limited legal dollars, there are four primary areas where we recommend you focus these financial resources. Failing to do so may, at worst, financially ruin the business or, at best, create an expensive distraction. That result can most likely be avoided if you seek input from a qualified legal professional at the outset.
We often get asked, do I have to trademark my name or my logo? The short answer is no. Should you? Most likely. It is hard to know today what your growth curve will look like three years, five years, or seven years out. If you spend the time, energy, and resources to develop a unique and memorable name, logo, and brand, but fail to trademark it, you run the risk of having to abandon it as you grow. If someone federally registers a similar name or mark in a market that you want to enter, you could face infringement liability should someone already own the same or similar mark or name. Registering your name and mark in the appropriate service categories today is critical to excluding others from using similar names or marks in the future.
Entity Selection and Formation
While you do not need an attorney to help you prepare and file articles of incorporation with the Secretary of State in your home state, you should seek legal counsel to prepare either the shareholder agreement if your brewery is a corporation or the operating agreement if you elect to form your brewery as a limited liability company (LLC). Failing to do so could result in trouble if you need to remove a business partner who is no longer a good fit for the company and ultimately land you in court as you try to unwind your corporate relationship. At that point, a judge or jury, rather that you and your partners, will decide the fate of your business.
Your location can be as much a part of your identity as your name and your brand. Your regular customers will come to know you based on where you are located (in the heart of town, in a unique historic building that you decide to repurpose, or in an industrial warehouse). If you are forced to move two or three years into your operations because you fail to secure renewal options in your lease agreement , you may need to spend precious resources to upfit a new location, relocate your equipment, and re-educate your customers about where to find you.
Employee handbook and training
Focusing on implementing sound employment practices from the outset makes good business sense. Your employees will mind the business when you are away from it or when representing your brand at beer festivals and similar events. Knowing that your staff is well-trained and aware of your expectations for them makes good business sense from the outset. Sound employment practices can also provide you with a defense in certain actions where an employee alleges discrimination or when an employee commits a rogue act. Consult with your lawyer to determine which policies you should include in your handbook.
Hayley Wells is a member of Ward and Smith, P.A.’s Alcoholic Beverage Law (ABL) Practice Group. Ward and Smith is a full-service law firm with more than 90 attorneys and offices in Asheville, Raleigh, Wilmington, Greenville, and New Bern, North Carolina. They represent more than 70 craft breweries, from large national brands to breweries in planning.