Franchise Law and Membership Sites
I've recently seen some IM promotions for membership sites where you pay an initial fee, plus monthly fees, and in return get the right to sell the membership sites and keep the earnings from your signups.
The pricing, content, etc., of the membership sites are controlled by the seller.
The advertising and promotion to generate sales is controlled by the buyer.
This is promoted as the buyer's site, although they have limited control.
Up-front, let me state I'm not a franchise attorney.
But this sure smells like a franchise. It is not being promoted or setup as an affiliate program.
There is also this kicker: the sellers are also promoting the same membership sites to get fees from customer signups. In other words, they're in direct competition with their membership site buyers.
That is almost always a very, very bad idea.
In the physical world this is less of an issue due to territorial restraints, and competition is typically covered in the franchise agreement.
Here, it looks a lot like a seat of the pants, great IM idea on how to make money, that could cost someone just about everything they own.
All it takes is one disgruntled buyer to complain to the FTC. Someone who loses money on the venture.
Bottom line - the franchise rule, and issues of competition with your buyers, are probably, most people on this forum, issues you want to avoid.
If you have the structure of paying monthly fees for the right to promote a product or membership site that is advertised as "your product or membership site" - and you're keeping the profits, you may want the seller to run it by an attorney to get a written opinion letter (don't call me on this one).
The pricing, content, etc., of the membership sites are controlled by the seller.
The advertising and promotion to generate sales is controlled by the buyer.
This is promoted as the buyer's site, although they have limited control.
Up-front, let me state I'm not a franchise attorney.
But this sure smells like a franchise. It is not being promoted or setup as an affiliate program.
There is also this kicker: the sellers are also promoting the same membership sites to get fees from customer signups. In other words, they're in direct competition with their membership site buyers.
That is almost always a very, very bad idea.
In the physical world this is less of an issue due to territorial restraints, and competition is typically covered in the franchise agreement.
Here, it looks a lot like a seat of the pants, great IM idea on how to make money, that could cost someone just about everything they own.
All it takes is one disgruntled buyer to complain to the FTC. Someone who loses money on the venture.
Bottom line - the franchise rule, and issues of competition with your buyers, are probably, most people on this forum, issues you want to avoid.
If you have the structure of paying monthly fees for the right to promote a product or membership site that is advertised as "your product or membership site" - and you're keeping the profits, you may want the seller to run it by an attorney to get a written opinion letter (don't call me on this one).