Selling the Business with Social Mission Attached

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There was nothing to model this after. I didn't even know that it was called a licensing agreement when I was first explaining what I wanted to do to retired businessman Jerry Gorde, who is a friend of mine through the Social Venture Network. I said I would "lease the name" to them as if I were leasing the property. He said, "No—that's called licensing. You need a licensing lawyer."

Jerry offered to help me with the sale. There were three pieces to it: the lease, because I owned the real estate; the sale of the corporate assets; and the licensing agreement. Jerry did the financial part of it. He knew a licensing lawyer, Lara Pearson, who was also a member of the Social Venture Network. She did the licensing document. And I wrote the social contract myself, since that was the heart and soul of my work. It took about two months to get it all done. Jerry contributed his work as my financial consultant, and I made a $5,000 contribution to a charity of his choice. The fee for the licensing lawyer was $8,245. There were also fees for the lawyer who dealt with the asset sale agreement and lease, but they would be similar for any type of sale. The work that Jerry did as my friend was partly on licensing and partly on the other two agreements. He was my advocate. I'm not sure what it would have cost for a paid adviser, but perhaps that's not what everyone would need if they had a good lawyer and accountant and better dealmaking skills than I have.

The Problem With Just Getting Bigger

Another thing that motivated me to have a social contract was the sale of many responsible companies to multinationals. Unilever's (UN) acquisition of Ben & Jerry's in 2000 was very traumatic for me, because I looked up to that company as the leader in the responsible business movement. I knew that the founders, Jerry and Ben, did not want to sell it—it was a forced takeover. They were very concerned about maintaining their values. But it's not just Ben & Jerry's. I could see that the businesses in our movement—evidenced by Stonyfield's Danone (DANOY) partnership in 2003, Odwalla's acquisition by Coca-Cola (KO) in 2001, The Body Shop's acquisition by L'Oreal (LRLCY) in 2006—the leading companies in the socially responsible movement were continuing to use the old paradigm of success—which is continual growth. You just keep growing bigger and bigger and bigger, and then you sell to someone bigger. So rather than creating a more equitable economy, our movement was concentrating wealth and power—just like the traditional economy. So when Ben & Jerry's was sold, that was my wake-up call about what was wrong with our movement: We just keep growing bigger, and then we're sold.

At the same time, I was becoming aware of the finite planet, our environmental crisis; that businesses growing bigger and bigger was literally killing the earth, and eventually the economy and civilization, if we didn't do something about it. That sale became a big turning point in my life. It was a motivator to start BALLE and start changing the paradigm about growing bigger and instead spread the small-is-beautiful world view.

I know that it was a heartbreak for Ben to lose control of his company and Anita to lose control of hers. People who really use their companies as vehicles for social change, such as Ben and Anita—it didn't end the way they wanted it to end because they lost control of their companies. When I lost control of my company by selling it, I wanted to figure out a way I could maintain the values.

But when it comes down to it, there's no way to completely do that. The White Dog will never be the same as it was when I was running it, because it was so much me. So there's only so far you can go. I think I've done as good a job as I can to maintain the values, but I'm not pretending that everything I was able to do there is going to be able to stay in place.

—as told to Nick Leiber

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