The Buck Stops Here: Keep Your Friends Close and Your Enemies Closer

ENEMIES
When former Mr. Universe and president/CEO of Labrada Nutrition Lee Labrada found out that a small New York based business was using a name that he had trademarked for one of his product brands, CarbWatchers, his initial reaction was to send a cease-and-desist letter. He had, after all, maintained ownership of the name CarbWatchers for over three years for some of his reduced-carb nutritional products and foods. Meanwhile, Jennifer Muroff, a former VP of marketing for Weight Watchers International, had cofounded CarbWatchers Weight Loss Centers in New York in 2002. In early 2004, they set up a meeting that was set to be a litigious battle.

FRIENDS?
Upon meeting, the two entrepreneurs discovered there was more potential in working together than there was in a lawsuit. Realizing that the marketplace demanded a comprehensive nutritional program, they picked up on an untapped market for the CarbWatchers brand name, one that included not only education and counseling, which Muroff could provide, but also an array of products — vitamins, supplements and food products — from Labrada. Furthermore, Labrada’s Houston-based nutritional product line had established national and international distribution in 1996, the year the company was founded, and Muroff was interested in growing her business nationally. The two companies decided to form a strategic alliance.
“Right away in our initial conversations, we realized that there were synergies in teaming up,” says Muroff. “If we had just focused on the business conflict instead of thinking ahead to the next step, we never would have found a workable solution.”

GETTING CLOSER
Today, Muroff is in the midst of franchising and has plans to expand the CarbWatchers clinics all over the country, all of which will carry a variety of Labrada products. Labrada Nutrition provides Web and marketing support for the CarbWatchers clinics, and the two businesses are working together to develop reduced-carb recipes using CarbWatchers products.

Labrada’s advice to other small businesses is to look for positive outcomes when faced with a conflict. A seeming adversity could turn into a great business opportunity. “Sometimes when you think something is a dead end, you can think it through and seek the positive in the situation,” says Labrada. “It’s not always immediately apparent how to turn a potential negative into an incredible positive, but as an entrepreneur, you are in the business of finding solutions to challenges.”

See the results at http://www.carbwatchers.net/ and www.labrada.com.