Business contract and franchise question
Hello,
Nice site I hope I can get an answer! I'll try to keep it simple.
My partner and I have a website that offers a product for consumers to purchase. I want to branch off and offer business opportunity's to people by offering them the same website I use for my business, but with their own domain name and promotional items. Every site is linked back to a nerve center where all transactions are handled. The site owner does nothing but promote. This allows a business owner to offer an additional service/product without equipment or employees. My deal with the newly established re-sellers would be a percentage of the net profit.
How do I do this legally?
Thanks!
Additional information
Thanks for the reply Dana and Pamela,
I want to take the path of least resistance, but do it right. I like the Independent Contractor Agreement idea. I didn't mean to say franchise.
Thanks
Attorney answers (3)
Dana Howard Shultz
Reputation Level 15
Answered over 2 years ago.
Business Attorney in Oakland, CA.
Your plan raises many issues, none of which can be addressed fully here - for example:
- Do you and your "partner" have an existing business entity, such as a corporation or LLC?
- Does that entity own all of the rights to your existing website?
- You used the term "franchise". Is that an approach you really want to take? (It involves regulatory hurdles that may not be necessary.)
- If you do a profit split with resellers, you must make sure that your contracts are structured such that your company and the resellers do not end up creating unintended partnerships (please see the link below).
You should retain legal counsel who is familiar with commercial and Internet law.
Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.
2 people marked this answer as good
Pamela Koslyn
Reputation Level 20
Answered over 2 years ago.
Business Attorney in Los Angeles, CA.
Your business plan is very contract-dependent, and certainly it's possible to have affiliate marketing relationships with re-sellers where your business acts as a hub, but it doesn't sound like you really want a franchise.
Avvo isn't suited to breaking down a complex business plan like yours. so you definitely need to retain a lawyer to structure this business. There are a lot of considerations, such as:
what kind of entity your business should operate as;
what rights you and your respective partner have;
how your intellectual property - trademark(s, business name, domain name(s), are registered and protected;
what kind of website disclosures and discaimers you need;
what kind of liability insurance you need, etc. etc.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
2 people marked this answer as good
Lynne D Shelton
Reputation Level 9
Answered over 2 years ago.
Franchise Lawyer in Cedar Park, TX.
I agree with my colleagues; however another important aspect to remember is that you will probably want to stay away from a business opportunity setup if possible as well. Business Opportunity's are like Franchise systems in the regards that there are many states that require registration and some states also require approval, such as California, prior to selling the business opportunity.
What you have described does not sould like a franchise; however, it could be setup to be one if you wanted it to Brand your name on all the stores online.
Good luck. Let us know if we can help.
2 people marked this answer as good
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