Young entrepreneurs have a Hell of a time dealing with HELL

It appears that it’s not only former franchisees who have encountered difficulties dealing with HELL Pizza, two Wellington based entrepreneurs have now come forward alleging that the pizza company used their idea without informing them.

In early 2010 Rafi Stone and Jon Markowitz approached HELL with a product that they had branded as the Misfortune Cookie. The Misfortune Cookie is a fairly simple concept; it is a sweet cookie containing a sinister and misfortunate message intended to bring humour to any experience. HELL was so impressed by the concept that they invited the pair back to deliver a formal presentation on its viability and potential.

On May 20 2010 the Misfortune Cookie idea was formally presented to HELL. Mr Stone and Mr Markowitz presented the concept to founder of HELL Pizza Callum Davies who expressed interest. He told Mr Stone and Mr Markowitz that he was commercially interested in the product and he assured them that he would be in touch.

On July 9 Mr Davies contacted the pair via email, he stated that the name and gimmick of the misfortune cookie was a “good HELL fit”, he also noted that HELL would be "a first to market". Callum however was only willing to enter a partnership if the product could be baked in the existing HELL pizza ovens.

HELL’s requirement created a problem as the company would only use a product that they could bake fresh on demand, and it became apparent that the oven temperatures could not be adjusted for the purpose of baking only cookies. HELL asked Mr Stone and Mr Markowitz to explore solutions.

According to Mr Davies people approach HELL with ideas all the time, some workable, some not. Rafi and Jon approached us some time ago with the idea of messages baked on ordinary cookies called ‘Misfortune Cookies’. Their plan was to make money by supplying the dough to HELL.

After substantial energy and money had been expended by Mr Stone and Mr Markowitz on developing baking technology in order to fix the problem, the pair were advised by food scientists that HELL’s requirements would be difficult to meet – it was simply not possible to bake the cookies in HELL ovens without altering the temperature.

Mr Stone and Mr Markowitz offered a variety of alternative solutions, but the pizza franchisor didn’t consider them appropriate. All dealings between Mr Stone, Mr Markowitz and HELL came to an end on August 2 2010.

Mr Davies; “We were impressed by the idea Rafi and Jon presented, but once it was found to be unworkable we let it go – there are many concepts that die at this stage, and we are accustomed to it.”

Although the dealings were terminated, Mr Stone and Mr Markowitz were left comforted by Mr Davies email which was sent on 2 August 2010 in which Mr Davies wrote: "I cannot see this working for HELL, if anything changes I will let you know".

After HELL had ended dealings with Mr Stone and Mr Markowitz the pair decided to pursue other channels through which they could distribute their concept. However, they were soon forced to abandon the whole project when in August 2011 HELL released their take on the Misfortune Cookie nation wide. Mr Stone has recounted that he first became aware of the release when he saw a poster promoting the product in the window of a HELL outlet.

When Mr Stone and Mr Markowitz emailed Mr Davies on September 8 2011 to question him about the release of the Misfortune Cookie, Mr Davies replied: "Our Auckland based agency pitched this idea to us without any input from us... Great minds aye!".

In relation to this matter Mr Davies has stated; “Barnes Catmur presented a different product that coincidentally was called ‘Misfortune Cookies’ as one of a number of ideas we commissioned from them in early 2011. They had no contact with or knowledge of Mr Stone or Mr Markowitz, and HELL saw no cause to mention them.”

Mr Davies; “Unfortunately Rafi and Jon are not willing to accept that ideas with some similar elements can be arrived at independently, as in this case. While BC&F's idea was called ‘Misfortune Cookies’ too, the product itself is quite different – it is modelled on the traditional Chinese fortune cookie with a paper message inside, not a regular cookie/biscuit with a baked-on message.”

Without so much as contacting Mr Stone or Mr Markowitz, HELL entered dealings with BC&F for the production and distribution of the new cookies. Mr Stone and Mr Markowitz do not allege that HELL acted illegally, but they believe that HELL owed them at least a moral duty to discuss the continuing development of the name and the gimmick that they had originally proposed to HELL in good faith.

Mr Stone and Mr Markowitz are young entrepreneurs, they have been surprised by the willingness of HELL Pizza to pursue the development of their concept without letting them know. Even if BC&F did chance upon the same idea as Mr Stone and Mr Markowitz HELL should have informed them. For Rafi Stone, the most shocking part of the whole ordeal was seeing the product marketed in the window of HELL, that shock could have easily been avoided with a quick call or e-mail.

George McLellan is a law student and is currently completing Professionals with IPLS, he has a particular interest in public and administrative law and New Zealand politics. He can be contacted by e-mailing george@scoop.co.nz.

This story can be republished with the expressed permission the author – requests can be made to george@scoop.co.nz. In the event that anyone or any organisation would like to republish this story or any aspect of this story please attribute the author and Scoop Media.

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