okay welcome to Sauce cast this is the part two of our Saucy
Saga um where things are about to get real juicy yep and uh my name is Porter
this is my brother I'm Ryan we're the Smitty Bros this is the Smitty Bros sauce cast um we just ended with uh a
kind of how we were doing when our I would say our sauce business [ __ ] and
sauce was at its peak while we were there yep and um we were starting to see
some red flags with uh within the core group of people
within the ownership group um and their spouses Y and
so what happened next yeah so
uh yeah picking up from where we left off we as far as our store reach we're
uh Southern California Colorado region Bay Area
region of Whole Foods we are uh working through the details with Costco about
this deal that's it's pretty much done it's just a matter of getting our facility audited and getting some of
these pieces in place to launch with Costco so all this stuff is happening um
as you would hear in our previous podcast is you know we just restructured our production and how we were paying
people and found some red flags there you can go back and listen to it but moving into uh this is kind of where
things started getting um uh red flags became more
apparent and so so just jumping right into it we had launched into the Bay
Area region of uh Whole Foods and we had been supporting that by Porter really
leaving uh his family for two weeks at a time going up there doing demos then
coming back and then needing to go up the next month because our product had a
month shelf life and so we do a shipment go up make sure it all sold and then he
would come back and then we' do another shipment go up and make sure it all sold by doing demos and marketing and all
that and so uh that was getting pretty taxing um
a lot of work especially with young families kids young kids and uh
so what one day I think you were talking to uh star
about your idea which your idea was uh why don't I go up to the Bay Area
and not not just go up on a trip but like why don't I relocate to the Bay Area I'll relocate my family because we
saw the opportunity of the Bay Area as like it was huge it was huge it was just massive opportunity for a product to do
really really well and so he was like I'm in a position where I can relocate
my family um you know you guys have always been a lot more traveling and
mobile and you know up for Adventures so uh you presented that and you
presented uh you know at that time I don't know what it's like now but at
that time the Bay Area uh housing prices were way more than anywhere else in
California by a lot and so um you were like in order for me to go accomplish
this and go up there I need like 500 I think it was 500 bucks was it 500 bucks
a month yeah I need 500 bucks more than what I was getting paid time yeah I mean you can say whatever however you want to
say it is you were making 500 bucks or I need uh you know I need a housing
allowance of 500 bucks more that way you're not taking a major personal hit
on it and so my sister said to me like what do you think of this idea and I'm
like it sounds good to me like let's do it like that was the best option cuz we
were we were trying to figure out how how are we going to make this place work
are we going to hire somebody up there there were other options the other options were to pay uh demo teams within within the
region within the region of stores you know to go do it very expensive not the
same more expensive way more expensive and not the same uh experience that
you're going to get from me the owner of the company yeah uh and the other the other option was to build our own team
of out of of people and um basically they would go do my job which was more
expensive than uh than me just doing it exactly um you know truthfully I would
have had to uh basically live there anyway to train them and make sure and manage them
totally but for me to just go that was the that made the most sense yeah if the
company was looking at three different options one of the three options was the
cheapest and the absolute best as far as the result totally the return on the
investment totally yeah and you know we already had Southern California under our belt Colorado under our belt of
establishing and making successful so anyways I was like let's do it that
sounds great that makes total sense and Then star said well I I think it was
something to the tune of you know I don't like that idea you know I feel
that you know he thinks he's entitled and I didn't at first I was like I don't
even know I have no clue what you're talking about you know I didn't even
know what she meant by that um and you know come to find out that it
was you know she thought you were entitled to more money than her or
something which was weird that it was even a comparison um that thought never entered
my brain you know come you know cuz I'm a one-third owner as well as star is and
that thought never entered my mind it was more like we have a job to do and here's the least expensive way to do it
but this is the first time in [ __ ] and sauce where we um ended up in a position
where it was like okay we have a clear disagreement between the owners and uh for whatever
reason you know i't offered I was I said well if I'm not going to go do it you
know you don't want me to do it you know you could go do it like and you take the extra money sure and I remember I was
talking to both star and Luke and they looked at each other like now should we do that you know like kind of joking I
was like you guys you you can't go do that you haven't done what I've done in
the marketplace I am the best to do this you have to make the sauce Luke and star
you have to you know basically run the back end of this company I'm the sales guy I got to go do this yeah but yeah
yeah so we're in now we're in this position where there's this disagreement
and there was no uh convincing our sister
um otherwise and it seemed like the issues that were arising were more
personal than business because from the business perspective if you're
going you know unemotionally just going what is the best option to get the job
done it was very obvious but this personal and there was no there was no
uh rebuttal or other plan to no there wasn't a better plan no it wasn't a
better plan and but we did offer that like okay you know please come up with a
better plan than this yeah but you know if you don't come up with a better plan than this then this is the best plan
yeah for our growing company yeah exactly and so this was the first time
where like a clear disagreement there wasn't any turning my sister
to uh you know what we thought was the best way to move forward as a company
and it's uh it's because there was more of a personal issue going on that you
know this didn't handle the personal issue and so um it was almost like a
personal issue was getting in the way of the growth of our company yes absolutely
the uh and everyone that is involved affecting everyone that is involved yeah
um everyone has to stay where we're at because someone has a personal issue
correct yeah so this is the situation we found ourselves in and you know uh just thinking of what
makes sense from that company perspective it was like well you know
this is what we need to do this is the best option there weren't any better options
presented and this is the first place or the first time where we're going okay
well how do we move forward as a company when we have a disagreement
and this is where you know operation agreements and you know shareholders
agreements and all those things would have come in handy and the and the you know where I
realized that you know those agreements this was something that I realized cuz
at first you know you think if you're signing an agreement like you're going well I'm signing this but it's
basically me saying I don't trust you so I want you you need to sign this cuz I
don't I don't trust you and what I realize is it's not about trust it's more about communication it's the person
saying I fully understand what scenario we're in and I agree to the scenario and
it's a it has nothing to do with the trust side of it it has to do with communication and so here we are in a
situation none of these agreements in place family and business disagreement how do we move forward and so that's when we
started talking about like well how do we move forward how do we actually resolve this do we are we uh majority
rules or are we unanimous and obviously
our sister said you know we are unanimous we don't make any decisions unless we all agree and you and I were
like I don't know about that yeah like like so basically basically uh you know
if someone has a personal issue or any type of issue for any sort of reason
they could stall the company if we were unanimous and decided that we were unanimous I never thought we were
unanimous that was never communicated to me yeah well we that was something we just never
discussed you know cuz we're this family we're best friends we all want the best
but when that personal thing got in there it got in the way of wanting the
best it got into a realm of a self-preservation something was
threatened so anyways I remember we brought our our dad worked for the
company and um and so we brought our dad into the conversation kind of as a
mediator and I remember I remember this this
meeting we had it was you me star and dad was there and we were we went
through we went through everything and I forget what dad's response was I know it
was very logical Bas I think he said like Star like something about fear like
don't make decisions out of fear or something I think that was brought up in
that meeting I I forget what he said but um in that meeting he
he not that it was about like siding with anybody but he totally understood
like the scenario and was on board with what we were saying and was trying to
snap star out of it yeah and she wasn't snapping out of it and in that meeting
she's texting Luke secretly we have no idea that this is happening now remember
Luke is an employee mhm of the company she's texting him and the
next thing I know is Luke comes in to that meeting clench fists and like
pissed about whatever star told them I don't even know we were ganging up on her oh yeah that's that's yeah we were
which no we were just saying something we were disagreeing with her like all of
us and trying to wake her up out of it yeah yeah no we were loving her and
spending the time with her to help her yeah but anyways no Luke came in and it
was too threatening was there to save her from a her brothers a
hostile you know an hostile mean an environment and
you know he came in and he probably said some things that he regrets saying day he did you know what he he apologized to
me after that um I forget how many days
after that but he was he did apologize I don't know if he apologized for barging in but I think he apologized for the
stuff that he said yeah cuz he said some nasty yeah he said some nasty stuff
emotionally charged things but he did apologize and I've forgiven him yeah um
but anyways so this that whole scenario goes down and then over the next
five months I don't know how many months it was um I think it was less than that
less three months I think it was even less than that really I forget it was a whirlwind but we
we had to get past this personal issue we had to remove it
from the discussion we we had to grow our company yeah and uh but the question
was are we going to be are we going to what are we going to decide cuz uh we
could easily say you know what we're going to decide we're majority rule or we're going to decide we are uh
unanimous decision makers sure and we're going to go with this y or we're going to decide we're majority of rules and
we're going to have a vote and we're going to then proceed with going to San Francisco and building the company move
on um but there was a few meetings that we
had separate from our sister uh with our dad looking for counseling on how
to uh handle this m and our first I
remember our first understanding and we did this actually separate from Dad but we were
like you know what uh unanimous unanimous is something that we
could do and they were and they were gone and they were in Alaska we wanted them to enjoy their
trip and not like drop a huge bomb like we're going yeah I think that the unanimous thing was my idea I was like
you know what cuz I'm you know I'm thinking about what
is you know I'm really thinking about like how can I be the most loving in
this situation and you know just drop all my crap and
we've uncovered something here but how can I how can
I put my put my sister before myself yeah and that was that was really the
thought in like going okay well we'll do we were pointing in unanimous direction
we were we were like we can do unanimous which when I look back and I'm going
like could we have done that yes we could have made that decision and um would it have been the
right decision I believe that what would have
transpired after that uh this is me kind of like you know saying my opinion of
what would have happened but it would have been a
um we would have been a slave to
uh personal issues y theany as as deep as deep as they went
and um and at the same time not only would we have been a slave to personal
issues maybe we could have um you know I would imagine eventually
it would have separated yeah more amicably maybe possibly I don't know
that's a that is a guess but I don't think so but the point of what I'm
saying is there's no escaping the [Music]
of the heart such as bitterness
unforgiveness um hurt um trauma wherever it came from and
wherever the ideas came in lies that that came in those
unhandled will will unhandled and watered those seeds unhandled and
watered will produce their fruit and we would have just been subject to to that
and it would what happened instead was a full
exposing of those things to the light and the
reaction yep you know that uh unfolded their after so yeah um so our dad
advised us our dad advised us to stay majority rules and to not to to majority of rules
can still work you just have you have to just work through the personal issue and then you know
or hold on to it whatever but the but but the company moves on regardless the company moves on so it's you know um not
one is better than the other it's just in this circumstance majority rules was
better for the company um at that point and Dad pointed that out to us and you
know we like yeah yeah that's good that's what we'll do but we still had some concerns for our sister who was
having some issues totally and wanted to solve the these issues before we go into
a a vote and I'm leaving and I'm getting this money to build up San Francisco
yeah like we're moving forward without you yeah with or without you like we wanted to we wanted to move forward with
you yeah and so there was some extra efforts to you know to bring
understanding to the situation and you know I had questions for her I remember in a car ride uh we were all in the car
and I was like Hey do you do you feel like if this company were to flop it
would hit you harder than us and she said yes it would and I
was like you know that's not it should if we if we go down it should impact all
of us the exact same and uh you know either either you can
let go of uh that extra burden that you feel like you have like you can personally like
Let It Go cuz she was on some loans and she was on um credit card or something
yeah um and she was the she was on the lease for the oh the lease for the
building for the building and I was like you know if it's going to come down harder on any one of us we should
reset so that we are in the position that it will not come down harder on on
anyone of us and if that means moving out of our facility and downsizing let's do it let's do it now
because you know it's not going to stop this company we're going to be awesome and huge we just have to reset the
ownership so uh everyone the ownership burden yeah um but that was declined
that was like no we're not going to do that and I was like then how are we going to get rid of this uh extra burden
that you feel or are you just going to always have that extra burden um there
was no solution yeah and uh that was interesting and right
after this is when the rolling pin came
down if you seen our ads you'll see there's a graphic from the first farmers
market of the pis Smith and there's a rolling pin that I assume is my sister's
image holding a rolling pin and about to hit a pie with it except my brother's my head was in the
way of the pie it was foretelling uh no the rolling pin came
down so Ryan left for uh the East Coast yep I went to Maine visit my in-laws yep
and my dad left to go to Alaska there was one there was one moment even before
this where we all sat down we called in to kind of help to kind of help through
this help understanding bring in a third party not parents not anybody involved
in the company we brought in um a guy who's a business coach and has built
companies himself and just for some advice on the thing and you know it was
it was a I don't know if I would call it a good meeting or a bad meeting just the
information was the information like you can set up your company however you want to set it up you can do it majority
rules you can do it unanimous you can do it however you want yeah companies spend
money on you know oh yeah peep on different things and it's okay yeah like
you could buy a house with company money or you could you know my sister was trying to um bring
home the point that it was not ethical for ownership to be paid different
amounts we just could classify it as housing
yeah or like uh you know yeah anyway the out of that
meeting just so silly you know we're sitting there going like okay did that work for you star like that guy's a
business he's an expert he knows what he's talking about
he said we can do whatever we want yeah you know no but the again the issue was
personal it wasn't it wasn't business so anyways that
meeting didn't uh help anything or it didn't go
anywhere from that from that point no um so yeah that then we move into the I'm
in Maine dad's in Alaska to visit family yep to visit family dad went to Alaska
to go fishing I think and go with a friend yep and so I'm
stuck stuck I'm not stuck I'm in I'm in you're holding down the for go
I'm holding down the fort and stars here too in San Diego and I was in the
kitchen in the office and star shows up and actually Liv was in there too Liv is
star's sister-in-law M who was doing some of our accounting yeah
accounting and so it was me star and Liv and star comes up and she says you know what
Porter your Shares are in question and I
said that's an interesting thing to say uh what does what does that mean and she
said well you know your Shares are in question
I was like okay I don't have a question about my shares in the company I own
33.3 33% of this company one3 and I know
Ryan's not questioning you know how many shares I own so you're the only one with
this question um how about we do this and there was a little uh sticky note and I
was like will you please write down how many shares you think I have
and she wouldn't do it she said no I said star if you do
this you will be alone and I was looking at Liv and Liv was like kind of Frozen in her chair
over there and I was like start write this down
write this down right now and you know she's thinking it's a trap of some kind
to be specific about I think so she got you know I think she got scared and she
ran away but she just wanted to say that my shares were in question yep and I looked at Liv and I'm like
Liv what do you think about that she's like it's brutal is the word that she
used brutal and I was like yeah I know and I
was I went into a mode of without getting a lawyer I went into
a mode of finding out the legality of this business for once yeah
finding out uh okay how does this work yeah um and I dove into I asked star for
yeah and we I mean just for clarification we were set up as an es Corp yeah um so shares were
issued and split up and uh reflect on
taxes and we didn't have any any stock certificat I wasn't I wasn't that was the only thing is we weren't issued our
stock certificates yeah um when the es Corp was set up but no but taxes it
reflected on our taxes and all that stuff so I don't know who was holding the stock certificates I have no idea who knows if
they were even made but uh yeah so I go into well I
asked star I was like Star I need Articles of Incorporation CU um I need to
see I need to see anything I've never read them before is that where it says
it is that where it says that I have this much stock or someone's got to tell
me mhm someone in Authority has to tell me how much stock I have in this company which I think I know what it is but so I
started searching um she didn't produce the Articles of Incorporation I actually
have photos of the open drawers where I took photos so that documents I could
see if any folders were missing after I looked at it just to see if anything was
getting pulled out and I have those photos of the file cabinets and I was like oh my God this
is crazy this is crazy and uh you know my wife was like oh boy you might want a
lawyer up on this type of stuff and I'm like lawyers I don't want I don't need a lawyer up I
everything's going to be fine everything's going to be okay we're going to get through this but I just need to find out what's the law so I
dove into the corporate code of California yeah and if you don't have any bylaws in California if you have
nothing set up no partnership agreement no other agreement it defaults
to a majority rules scenario yeah um
where you know we can make the decisions on what is because we are the majority
yes of this company we are actually the authority yeah together we're the authority yes because we're two-thirds
of the ownership yeah but questioning the shares and not producing like an
answer is just a I don't it doesn't compute in my mind that that why you
would go that way to gain control of a situation
it just doesn't register for me makes no sense
no so not if you bought into the company and you invested full full uh yeah and
I've been on our business C cards it says owners Porter Ryan star yeah on the
taxes it's equally divided um you know obviously without producing an answer to
that question um it was just anything anything to get control
sure anyways I called you and I was like
dude there's some wacky stuff happening over here and it might have been the
next day or the day after uh well there's probably another couple phone I actually I think I talked
to Star and I was remember standing in my driveway and I called her on the phone and I was like listen
somebody in Authority is going to have to tell us what to do here and she took
that as I'm going to take her to court and a judge and I was like you know what if it if whoever that Authority is we're
going to get to them eventually because it doesn't seem like any movement is
happen where's the answers yeah um and you know I'm interested because I want this company to keep moving totally
uh around that same time so I was in I was
in I was in Maine and well I had I had a few
interesting conversations with star one of them was before I went to Maine we
were having a conversation and she was like she said she said something like we
just we just shouldn't listen to it was it was a weird way to say it was like we
just shouldn't listen to you know the voices of these lies and I was like I
don't think I was like spiritually mature enough to like fully get what was
being said but she she said that like we just shouldn't listen to the voices of
these lies and like I didn't even know what she was talking about um and then
there was another conversation that I had with her she had called me in Maine
and it was somewhere around the same time and she was like she was like Ryan I'm I'm taking
I'm just going to summarize it here cuz I don't have that phone call recorded but she said um you
diving up the ownership different I'm I'm diving up the
ownership of the company different she said you can have your 33% um because you worked hard and she
said but Porter gets I don't know she said 18 or however the math works out to
where it put her with 51% of the company and I'm like I told her on the phone I
was like um I I was like absolutely not I was like you know it would be one
thing if you actually had the authority to do this
but you do not have the authority to do this you know you do not own the other
66% of the company it's not yours and what you're suggesting is called
stealing and essentially you know she's trying to negotiate uh the hold our shares Ransom
with this move that she's making and try to renegotiate something that she has no
authority to do and I said absolutely not that is stealing MH that is stealing
that's it straight up M and I think that's when we hung up the phone but um
that was the extent of that conversation yeah then not longer after that
she called both of us yeah and got us both on the phone yep and she
said I've changed the locks on the facility yeah you're no longer allowed
to go into the facility um I've taken bitching
sauce um out of the company out of the company I'm making another company
called bitching sauce and I'm claiming intellectual property
on the recipe and I'm taking all of the revenue
all of the revenue all of the accounts and anything that has to do with the sauce mhm and I'm going to
leave the uh the company the [ __ ] and
Inc to you I'm actually going to resign as a um
as a officer of [ __ ] and Inc and she
was going to separate out and go start her own company with her new
sauce well her old sauce I guess in in it was always hers I guess in that train
of thought but yeah I I even asked her I was like uh so what am I to you and she
was like you're just you were just my bre my brother helping me out start a
company that's what you were mhm yeah well I was
uh you know the business cards that say owner and um everything you know no in
the moment it was it was very shocking it was a uh surreal moment
where yeah it was like like Twilight on yeah I remember that you like basically
like prayed for her over the phone and commanded I was casting out Spirits baby
that the time ever done that the devil out of somebody um which you
know it actually she did no more talking during that um that phone call but you
know that is when we found out we were locked outside of our own company and no more money we we were not uh in charge
of our own money anymore someone else was no it was it was what was crazy is
once that happened it was like oh my gosh they you know we were locked out of
the bank account we were locked out of social media I mean I was scrambling to
like cuz I I was in charge of social media did you come back early from Maine at that point I don't know I think you
came back early I think you were supposed to stay a little bit longer but you came back yeah I don't know but I
remember like you know scrambling to
like keep her from taking everything yeah taking you know accounts and stuff
and you know yeah it yeah it was it was a crazy time it was a crazy crazy time
and we you know we didn't know what to do uh is we didn't think family was
capable of doing that type of thing I mean we have young babies we have uh you
know rent payments and car payments and a whole life that is based you know
built on a salary from a company that we're building also it's not just the ownership of this company it's the salary oh yeah and we went from you know
making the more money than we've ever made before to making as little money as you possibly
ever could nothing as little money as we've ever made yeah and with young families and
all that and it was uh it was truly shocking um after that we didn't know
what to do um we we went for customers we we basically
we saw they were going for the money and the control over the facility but we
still had customer relationships and we needed help people knew who we were that's right so we um I know this my
sister doesn't like this part but we went on and did a crowd source which
which it's like a GoFundMe or something was it GoFundMe okay so we went on GoFundMe and we had contacts for uh I
don't know how we shared GoFundMe with every I think we shared it on I think I I might have
had like the access to our social media our company social media posted on there
so but we were able to make a video and be like hey we don't know what's going on yeah
um you know in our minds this was just stolen from us yeah and uh you know we probably
said we were just stolen from on the video and probably we need help and so
if it's if it's money or someone just knows what to do to help us in the
situation of our customers like please help us and
um and then we sat and in your house for 3 weeks just
what are we going to do here we uh a couple attorneys reached out to us we
had some conversations with attorneys nothing was good nothing was yeah nothing was like Landing nothing was
Landing it was all like oh you have a you know you have a percentage chance of winning this if you do this um you know
it'll cost this much I have no money yeah um you know great move for Star to
be like oh they can't do anything they can't they can't take me to court they have no money like no having no money is
a problem and the crowd sourcing wasn't enough enough I think we paid some rent
so we could stay in our homes with that money we raised like two 2,000 bucks but uh no for three weeks we sat
there trying to figure out what to do and then my wife's mom sent us a Bible
verse and it said well basically she she has this
whole letter and this letter is going to be posted uh so you can read read uh all of you
um you know the exact the exact letter will be posted and I don't know where I'm going post it we'll put it somewhere
throw it up in link or something yeah um but it said you know I was in a
situation where I sued I was in a lawsuit with my family
and it is the worst thing ever don't do it and then there's a a Bible verse and
it was talking about like don't sue your brother mhm um and
this is in 1 Corinthians 6 yeah and it talks about you know it being wrong to
take a brother to court and would you rather I'm paraphrasing would you rather do wrong and take your brother or sister
to court or would you rather be wronged and
you know suffer the the defrauding and in that moment we knew
what to do yep um we It also says in that
section uh that you pull together um someone from the church to make a
judgment yep and you know anyone from the church MH uh and so
we saw that as the Victorious path yeah what we'll do do is we will call
in somebody that she'll listen to somebody that she respects yeah and
we'll present our case and it won't go through the court system yeah it'll be done according to ACC in a in a Godly
Manner and what happened next well we presented it to Star we were like hey this is what
we need to do star had a a lawyer write write a letter basically you know
formalizing her resignation and formalizing you know
uh kicking us out of the kitchen or whatever based off of her intellectual
property uh claim mhm and which if you listen to the last podcast you can hear
and understand the origins of [ __ ] and sauce and where it came from and you know who started it and how how we made
it and M brought it to the market but um so anyways the intellectual property
claims and all that stuff she did the the lawyer thing and you know we we had
no regard for that stupid lawyer yeah I'm sorry yeah
no we we made no agreements we made no agreements with that guy and legal
system we presented the uh we presented a mediation to Star and and she denied
MH it and wouldn't do it yep and so that was the moment that we realized you know
it's better well we had already read it's better to be wrong than to do wrong um but now it's like all right we're
about to live this thing it's better to be wrong than to do wrong yeah and so
you know that was 2015 10 years ago when that happened
um I think it was August or September 2015 so um you know that launched us
into this hope of um you know the fruit
of that choice and receiving The Godly fruit that that would bring us and you
know that's kind of the next part of this that is the next part more to come
