Some years ago, our firm had an employee who was labeled as the MARKETING Manager. Also, the Sales Manager. Obviously, a very IMPORTANT position. YOUNG and ENERGETIC! SINGLE! A real GO-GETTER!! As you might expect, HE got engaged, then married to a NICE GAL. Intelligent. A good businesswoman, too.

Not a bad situation for him. OUR PROBLEM?? His new wife was 3 HOURS away! How can we keep THIS valuable employee? WE had NO BUSINESS in the CITY where he needed to live with his new wife. He wanted to stay in the business and we certainly desired his continued employment with us.

ACTUALLY, he had gone to SCHOOL and LIVED in the city before. An obvious benefit to him and to us. He would have FRIENDS who could be PRIME prospects to become clients/customers. We LICENSED him to do BUSINESS…be HIS OWN BOSS! He was the OWNER of the business. It would give us an introduction into a NEW MARKET. A NEW BEGINNING…. with OUR BLESSING.

We were pleased as punch. EVERYTHING was off to a wonderful beginning. The business came in and grew QUICKLY. He was the PRESIDENT and brought in the business. We gave him BACK-OFFICE support…materials; payroll; billing, etc. We had a LEGAL agreement to provide services on a FEE basis. A good deal for BOTH of us. Our fee was FAR below industry norms. Even then, we REDUCED our fees further when he had difficulty with expenses.

According to industry standards, we had set our LICENSE FEES at a discount in the very beginning. A CONTRACT was WRITTEN and SIGNED! We wanted our former employee to succeed in his new business. It was not our intention to saddle him with unreasonable expenses.

Our Generosity Backfires…

We REDUCED the LICENSE fee WITHOUT changing our AGREEMENT. It seemed like a very generous act on our part. We saw no reason to bother with re-writing the contract. We were giving him a bigger slice of the pie with no strings attached. Not a good idea!

It was a TOUGH lesson for us to learn. We had to PAY THOUSANDS of extra dollars on a BUY BACK formula when we purchased the business from our licensee. In effect we had changed the contract by our action which caused the formula to change on our buy-back agreement.

BUSINESS TIP: NEVER do anything without YOUR attorney (legal advisor). It seemed so SIMPLE. Kindhearted. FAIR! Legal issues are LEGION. DON’T try to be your own advisor. AVOID TROUBLE WITH GOOD COUNSEL.