Hello everyone.
I have a great friend who does decorative cakes. We met through facebook, we had both started our businesses around the same time and met in person shortly thereafter, a great friendship bloomed and we now hang out a lot, share business advice, etc.
She does decorative cakes, and I do decorative cake balls and cupcske bouquets. We had both agreed to not cause any friction, that we would not offer anything the other offered. (ie, I dont do decorative cakes ((i dont know how to anyway)) and she doesnt offer cake pops.
Well, she is about to open up shop in a local mall, she is very good and I see her getting lots of business. Her shop will be 2 floors, the cake shop on the bottom, and a coffee area with a childrens section and 'make your own cupcake bar'.
She has asked me in the past if I would be willing to go into business with her, and I always say no because I dont want to risk the friendship. I am a high believer in not mixing work with friendship.

Well, she called me a while back ago after coming home from a business owners meeting, and said a woman who owns a 10cake stores here has been bragging that soon she will be offering cake pops, and is training her staff with books how to make them. I am the only provider of cake pops in my area.
the forum thing is messing up, I will continue in a part 2...

I am the only cake pop maker i my area, and i work from home. A lot of people know who I am, but of course im not as well known as a shop.
anyway, my friend begged me to let her display my items in her shop. she says she wants nothing from me, no rent, no percentage. I told her in the situation I am in (financial, personal, kids, etc) that im not in a position where i can commit to something like that/ She said she expects nothing on a regular basis. She assured me my items will be for display only, with a sign under them and my business cards saying 'to order this call xxxxxxxxx'. She said if I want, I can have some of them displayed in her fridge for sale and I get 80% and she gets 20%. (for example).
She said if there is a week or even 2 weeks I am not able to provide anything for the shop, its no big deal. Just when I am able to make some, tell her, and she will put them in the fridge with my little sign.
So basically, free advertising. she told me to make my own banner to go next to her banner for store opening. I have done that and added to my banner "now available exclusively in xxxxxx shop to try".
I know this is all extremely generous of her, and a once in a lifetime oppertunity. me being able to tell people my things are displayed in a high end mall will be great, and people walking by the shop will see my banner, my work, and more business for me, without all the hassle of owning a shop. She says we dont have to do this forever, just for a few months to get my name out there, and longer if it works out with some sort of contract/rent.

She says she wants to do this because there is something about being "the first". she was genuinely upset for me that I have been making these cake pops for 2 years, and now they will be being offered in another shop claiming to be the first. Since her shop will be opening before the other womans, she wants me to display my pops in her shop, so that I can be the "first" official cake pop provider in a store. That the first is always more memorable than others who pop out with a product copying someone elses.

although I trust her and all, and have agreed to do it, (got banner made for opening- freed up custom orders for that time frame to focus on display) I am still hesitant just for the friendship. Does anyone have any advice how to go about this the correct way? so that neither one of us feels resentful towards the other for any reason? (for example, what if my items sell more than hers, or what if my sign gets taken down by someone and people think its her product)

Am I over thinking things? I'm just worried. I understand that my unique item will help bring people into her store, but she really doesnt need my item, shes the best in town. but this is also the kind of advertizing people pay thousands for and im getting for free.

I am extremely grateful to her, but at the same time, dont want the friendship to somehow dwindle because of this.

Sorry this is so long.
advice please?

Well, you know the first quest we're going to ask, right?

Are you legal? Do you have to be in your city? Because if you need a license, the Health Department/Dept of Ag inspectors ARE going to see your banner and your products at her store when she has her regular inspections.

That's EXACTLY how I got caught without the proper license. (I had a license, but not the right one. And the right one required a remodel of my kitchen. I had 6 weeks to get it done, so it was basically a "throw money at this problem to fix it scenario".)

Also, around here selling to a shop can (depending on how your particular inspector interprets the rules) require a different level of licensing.

And if you're getting into any kind of retail, you must have insurance for your own peace of mind, and to protect your resources.

in addition to what leah said you show draw up a contract for the arrangement she is proposing with an agreement to review it in a couple of months. Make sure it clearly outlines everything.

the dreaded double post

thank you-
yes it is all legal, licenced, ready to go. nothing to worry about legal-wise.

I wouldn't worry about this too much from the risking your friendship perspective...selling your products wholesale in a friend's retail shop is a far cry from going into business with them. The worst that could happen is that your product won't sell, so your friend wouldn't be out too much.

thank you very much everyone for your input! I will go through all of this with her. I love CC!

Just to reiterate what Leah said for others in a similar situation- in our county, I can legally sell direct to consumer (as long as I stay in good standing jumping through the hoops) but am not allowed to put product in a store. tOtally different license needed.

I sell dessert cakes out of my sister's party store. A couple of things to consider....

- if the pops don't sell, how who is in charge of disposing of them
- all items MUST be properly labeled and priced
- you can have all the banners w/your phone number you want, but ppl will still expect the business owner to have all the details about your pops
- when she advertises, will she also be promoting your pops? "Shop w/pops" Do you have to pay her for that?
- what about messages? Again ppl, will expect the owner to know all the details - they will leave messages with her for you to call them.
- additional storage for display, misc. items. You may not think you need it, but do you really want to lug cards, photo albums, misc display pieces back and forth all the time.

You need to consider all of this. When I did my contract, I dealt with my BIL. It's much easier to talk straight business with him because emotions don't get involved. When dealing with this you HAVE to separate the personal relationship and the business relationship.

wow ccr, thank you so much for your input. definately something I will consider and bring up with my friend. Does your sister charge you to display your items?

I am planning to tie off each pop that will be sold from her store (most will be just small foam balls decorated for orders) with a cello baggie and a ribbon with my business card attached.

I never thought of people expecting her staff to have the answers, will discuss that with her.

Thank you very much.

I pay rent each month for my 4' refridgerated case, a dummy display shelf and storage shelf in the back.

Customers expecting the staff to know the answers is big. You both want peaple to continue to come. People don't want to come in and then have to call someone else for details - ppl are lazy. My sister and BIL have learned the starting prices for me and basic info. From there they refer them to me.

From what you have said here this sounds like a win-win situation for you both. Please let us know how it goes!

I think only you can know how strong your friendship is....but if you do have a true friendship, then I'm sure it will work out. Of course at one time or other one of you will get on the other's nerves but in a true friendship it will be brief, and it will be pushed away and forgotten.

Good luck!

I just want to say she sounds like a great friend and I hope it all works out for you both

Why don't you just sell a certain number each week (when you can if she is alright with the loose situation) to her on a wholesale basis. They would still be packaged by you with your label so people would know they were made by you but your friend would just pay you for your work and she is responsible if they don't sell. This whole 80-20% thing is fraught with all kinds of problems. Plus if people see a dummy cake pop, they want it now, they don't want to have to leave the store and then call you and place an order for later. Most are impulse buys with these things so the real cake pop should be in the store to buy.
Also if you do it that way, check with your state, mine required a wholesale license and certain labeling on package but it was not a big deal. Good luck