This famous perfume entrepreneur sold her name to Estée Lauder. It's her only regret

Ms Jo Malone CBE became a millionaire aft selling her namesake perfume marque successful 1999, and decades aboriginal has lone 1 regret: ne'er being capable to usage her sanction again.

Malone founded fragrance marque Jo Malone London successful 1990 and sold it to the Estée Lauder Companies 9 years aboriginal — on with the rights to usage her sanction successful immoderate business.

"I don't look backmost and deliberation to myself: 'If I'd waited different 5 years, I could person made treble the amount,'" the 62-year-old British entrepreneur said connected an occurrence of CNBC's "Executive Decisions" podcast with Steve Sedgwick.

But she added: "I deliberation the 1 happening I regret — and they [Estée Lauder] whitethorn not person bought the institution [without it] — is the usage of my name. That's a struggle, adjacent today."

Under British law, erstwhile you merchantability a concern built connected your name, you usually merchantability the goodwill and the close to usage that name, Simon Barker, spouse and intelligence spot caput astatine Freeths instrumentality firm, told CNBC Make It.

Once you've sold the business, utilizing your sanction for a akin concern could origin user disorder and breach your declaration oregon infringe immoderate trademarks the purchaser present owns.

It could besides magnitude to "passing off" — a British ineligible conception that stops idiosyncratic from misleading the nationalist into reasoning their goods oregon services are connected to different business.

Malone's aboriginal businesses lone usage her archetypal sanction to guarantee they don't interruption her statement with Estée Lauder. These see her luxury fragrance marque Jo Loves and, much recently, her intoxicant marque Jo Vodka.

While the merchantability of her archetypal marque made her wealthy, Malone said sacrificing her sanction was "the hardest thing."

"I don't privation to origin immoderate problems, but I consciousness the instrumentality needs to change, actually, successful this, due to the fact that radical are selling their businesses with their names, and if you're saying you can't usage your sanction for the remainder of your life, that's a lifelong non-compete," she said.

"I deliberation the instrumentality is going to person to look astatine the mode businesses are sold and however that non-compete comes in," she added.

Malone is 1 of a fig of British entrepreneurs who person sold an eponymous marque lone to regret it later.

Fashion decorator Karen Millen sold her concern successful 2004, and agreed not to usage her sanction successful a competing concern globally. She aboriginal challenged the restrictions, but a tribunal ruled that utilizing her sanction would origin user confusion.

Meanwhile, Elizabeth Emanuel, the decorator down Princess Diana's wedding dress, sold her concern — including the rights to usage her sanction — to a institution that aboriginal transferred those rights to caller owners. When she tried to halt them from utilizing "Elizabeth Emanuel," the courts ruled that the merchantability meant the caller owners legally controlled the sanction and trademark.

"Contractual restrictions trump everything," lawyer Barker said. "They spell connected the apical of everything. So if you say: I won't usage my sanction for a competing business, past the caller purchaser tin enforce that covenant against you."

It's a akin communicative crossed the Atlantic. American constitution creator and entrepreneur Bobbi Brown besides sold her namesake cosmetics institution to Estée Lauder successful 1995 and was contractually obliged not to usage her sanction commercially successful a mode that would vie with the brand.

While the U.S. has akin laws preventing entrepreneurs from breaking contractual obligations, it besides has the "right of publicity," which is simply a instrumentality that the U.K. doesn't have.

This "protects against the unauthorized commercialized usage of somebody's name, representation oregon likeness," Barker explained. "Where the quality lies is that you'll astir surely suffer the close to usage your sanction for akin goods oregon services due to the fact that of the contractual restrictions, but the close of publicity mightiness inactive let you to power different uses of your sanction and advertizing oregon endorsements."

Malone advised young entrepreneurs and first-time founders to deliberation doubly earlier selling the rights to their name.

"I would accidental to people, anyone that is looking astatine acquisition, particularly if your sanction is attached to your business, deliberation done each the implications first," Malone said. "Think astir those things, due to the fact that you volition sacrifice things, and you volition person to springiness and yield, and you volition summation thing else, but ne'er bash it solely, conscionable for money."

Barker adds to this that you tin negociate what's successful the declaration earlier selling the business, including possibly changing the name. However, determination are immoderate caveats, arsenic oftentimes, without the archetypal name, the marque doesn't clasp arsenic overmuch worth successful acquisitions.

He said founders should consult advisors and perchance inquire for "watered-down restrictions."

"But of course, it's not ever arsenic elemental arsenic that, due to the fact that idiosyncratic volition beryllium waving galore millions of pounds astatine you," helium added. "And if you say: 'I privation each of this,' they're apt to crook astir and say: 'Well, we're not going to springiness you arsenic overmuch then.'"