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MenuHave a fitness training company which has built quite a reputation due to name clients. I would like to branch off and allow people to use the name...
Have a fitness training company which has built quite a reputation due to name clients. I would like to branch off and allow people I know to use the brand and market as being affiliated with us. In return they would pay a monthly fee. What do I need to do legally? What needs to be done to protect myself and the company? Would I be able to do this with just a contract agreement and a waiver that their clients would sign protecting us? What about tax implications? Could this just be counted as ordinary income?
Answers
Hi,
What you're contemplating is a licensing model. It's like 'franchise lite.'
There are several questions you need to answer for yourself before you go recruiting any licensees.
For example, are there any business systems that will come with the franchise in addition to the brand name? How will you control the systems and guarantee the client experience?
The more 'controlling' your agreement is, the more you may be deemed to be selling a franchise which introduces complicated compliance requirements.
I've helped many others work out licensing schemes before. Arrange a call if you'd like to chat.
Also, you should read Franchise Warnings. Available from Amazon.
David Barnett
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How to license with a revenue-based model?
Hello - I work as an in-house transactional attorney for a US-based website with 20 million monthly unique visitors around the world, and I've worked on several licensing and ad-rep deals for several countries in Europe, South America, Australia, etc. There are several ways to protect yourself, but at the end of the day you have to trust your partner that you they will want to be honest so you can continue doing business together. That said, you should give yourself an audit right. Not sure what the software is and if it directly correlates to sales, but if so see if you can track yourself or use a third party's tracking software so you can compare numbers with theirs. Also consider including in the agreement a dispute clause, something to the effect that if you dispute their report for a quarter they will have x days to provide you with sufficient evidence to reconcile the dispute to your satisfaction - if not, you can terminate the agreement. Another way to protect yourself would be to ask for a minimum guarantee, but depending on the deal that may be difficult to work in. As far as working internationally, I think the hardest part there is ensuring collections and that you are paid in US dollars. Stand strong on keeping venue and choice of law in the jurisdiction in which you reside, not in theirs. If you'd like to schedule a call to further discuss, I'm happy to chat, let me know! Best, JeffJR
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If I get a virtual address for my company and I work from home; will I still be eligible for tax credit on my home office?
yes. As long as your main place of work is your home/office.JF
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How to better track managed service contract renewals?
Hey there, I trust that your CRM is robust enough to trigger some workflows and automated steps. I would recommend you have an automated series of reminders to both your customer AND their respective relationship manager that fire as the client approaches their end of contract. To your internal staff, getting notified that a customer is opening/clicking on resources included in their reminder emails would be recommended, or if a client has NOT taken any action, to notify more than one member of your staff to ensure that these folks are not falling between the cracks. Additionally, monitoring and being notified of actions of the client, such as visiting your FAQ page or pricing page on your website provides helpful context for your sales team when reaching out. Again, I think it is just as important to nurture the client as they approach this date, they should really be able to see the value of working with you and make the decision to continue their partnership with you regardless of the contract. I'd love to help you more with this, let's set up a call if you have specific questions. All the best, -ShaunSN
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