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How much should you charge for recipe development?

chef doh dough

Question:

I have recently been asked by a popular musician who wants to add to his brand to come up with a recipe for a frozen pizza product. I'm trying to get an idea of what to charge. I see a lot of sites suggesting $25-$50 an hour for recipe development, but that seems pretty light for something that might blast off financially. I'm curious how different the pay structure is, being that it's not a restaurant but rather a soon-to-be heavily marketed product.

– Hopeton, Chef-Owner, Culinary Arts & Excellence, Atlanta

Answer:

One of the things I constantly stress with my students is that the opportunities for chefs go far beyond what you normally see. Developing food products for foodservice or retail is an avenue where many chefs find financial reward. The Research Chefs Association (disclosure: I’m a member) is an organization of chefs who do this kind of work, and their members will have advice on specific rates and agreement structures.

You are right to question the prevailing internet wisdom on this. While $25-$50 per hour seems like a generous pay rate, especially if you can bill for research, shopping, planning, etc., it is tiny when compared to the potential revenue a project like this may bring in if successful. Of course, the flip side is there are many hurdles to successful food product development—and many good frozen pizzas on the market—so yours may never hit store shelves.

One way to think about your pricing is to take a lesson from the leadership gurus who talk about transactional versus transformational leadership. (And yes, let’s apply leadership theory to frozen pizza.) A transactional relationship would mean a direct exchange: You spend two days working on a great pizza recipe at $50 an hour. Your client transacts with you to buy your recipe and compensate you for your time: $800. Not bad for two days work, and if both parties are happy, it’s not really a problem. A transformative relationship reframes this interaction to say you have some specialized knowledge accumulated through years of study, travel, practice and tasting, as well as some artistic/culinary creativity. All of those qualities inform your two days of work to produce a product that would not have been possible for anyone else to do in quite the same way. That takes it from an $800 project to a bigger one. Artists understand this. While it may take them a week to make a painting, they want to sell it based on the value of how the art transforms the experience for its owner rather than a precise calculation of how long it took to make. So my first piece of advice is to try to frame this recipe development as transformative.

In general, I’ve seen two types of agreements for work like this (including our own):

  1. Work for hire. Here, you agree on a price for a recipe that will be the full property of your client. It will hopefully be a transformative project for your client (and you), and your client can market it as they see fit. The advantage to you is you get paid whether or not the product is successful. The disadvantage is if your client becomes a huge multinational chain based on your recipe, you’ve already gotten paid.
  2. Royalty. Here, a client will pay something up front to cover your costs and time (like that hourly rate), but if the project is successful, you will earn a percentage of revenue for a certain time period. The advantage is that if the project hits it big, you are along for the ride; the disadvantage is it is less guaranteed money than the work for hire.

 

As always, when you get to this level of detail, get an attorney to advise you on protecting your intellectual property and review the agreements.

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