Big Profits and Big Losses
Let's say you want to start a chain of restaurants in Florida using NBA star Dwyane Wade’s name as the name your restaurant, and at times, Wade will make personal appearances at the restaurant. Sounds like a great idea for a start-up restaurant to generate a lot of business, especially, considering the fact that for two years straight Dwyane Wade’s jersey has been number one in sales of all NBA players.
We all get ideas at times that we think are sure to generate big profits, unfortunately in the business world we know those great ideas can sometimes end up only generating big losses. That appears to be the case with two investors, Richard von Houtman and Mark Rodberg, who entered into a contract to start D Wade’s Place, a sports themed restaurant bearing the name of its superstar endorser. Both investors are now involved in a lawsuit filed against Wade. In return, Wade has filed a counterclaim against von Houtman and Rodberg and a libel lawsuit against von Houtman seeking $100 million in damages. Currently, the case is in mediation to see if it can be settled.
Oftentimes, persons entering business partnerships plan for splitting profits and job responsibilities but, fail to plan for what happens if the business results in losses. If your thinking about entering a business partnership, make sure you develop a plan that takes into account potential adverse results to the business and partnership. If you have questions regarding the potential risks you should take into consideration, send me an e-mail.
