Autumn Witt Boyd works with influencers to help them protect their members and avoid costly legal mistakes while scaling their businesses.
I talk with Autumn and Chantee Hallett about the legal side of memberships. We talk about most of the legal things that you’re probably not thinking about, but really should be thinking about, when it comes to having a membership in your business.
Autumn Witt Boyd is the founder of the AWB Firm. Autumn graduated in the top 10% of her class from Vanderbilt University Law School. She spent the first ten years of her career battling over copyrights and business issues in courtrooms across the U.S. Autumn started AWB in 2015 to help entrepreneurs scale and protect their businesses.
Chanteé Hallett is an attorney at the AWB Firm. She has a passion for intellectual property matters and helping creatives protect their brands and rights. Chanteé graduated from Charlotte School of Law in North Carolina with her Juris Doctorate.
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Contracts. You need a contract. A lot of people create memberships, and they’re not thinking that they need to have terms documented for members to read. Even though a lot of them don’t read it, it’s really to protect your business.
You definitely need a contract in place all the time.
I think that’s where we can start.
What’s up, my friends? Rick here. Welcome back to the podcast. Thank you, as always, for tuning in today. Super appreciate you for coming to hang out with me and tune into a topic today that is frankly not the most fun topic to be thinking about when it comes to your online business. But we’re going to make it fun today.
We’re gonna be talking about the legal side of memberships. Specifically, we are going to go through most—because I don’t know if there’s other things that you might be thinking about. I’m sure there are—but we’re gonna be talking about most of the legal things that you’re likely not thinking about, that you really need to think about when it comes to having a membership in your business.
Now, if you are just starting a membership, if you’re adding a membership onto your already successful online course or online coaching program, or whatever it might be, this is a must-listen-to episode, because you’re in a perfect place to start with everything we talk about here today.
If you already have an existing membership, also going to be super important for you to be taking action on it, considering what we’re talking about here today.
Joining me to share their expertise is Autumn Witt Boyd, and Chanteé Hallett. Autumn is the founder and lead attorney of the AWB Firm. And Chanteé is an attorney at the AWB Firm. They specialize in online businesses, specifically course creators and coaches.
They’re here to share their expertise in a very fun way. We have a lot of fun today talking about the legal side of memberships.
Now, if you are an online course creator or you’re an online coach, and I’m assuming that you are by listening to this podcast here, and you are more mature in your business, meaning you are already successful in your business—you’re doing at least seven to eight K per month in revenue from your online business, and you are looking to scale.
If you’re looking for more profit, more impact with less hustle (that is so key), and you aren’t really sure what to be doing. You’re not really sure what next steps to be taking. You’re likely overwhelmed in the business, working way too many hours, looking to build a team, et cetera, looking to improve your systems and processes, your sales and marketing, and your mindset.
Then I want to invite you to check out and apply. It’s application only, for my Accelerator coaching program. This is one-on-one coaching, group coaching, and a mastermind experience all wrapped up into the Accelerator.
So, if you want to learn more and apply, go to RickMulready.com/accelerator.
Alright, are you ready to talk about legal side of memberships? Let’s do it. Let’s go hang out with Autumn and Chanteé.
Autumn and Chanteé, can we make “legal,” fun today? Is this possible?
Thanks for having us.
Welcome to the show. I’m so glad to, to have both of you here. we’re going to be chatting all things legal specifically when it comes to memberships, we had a, a pre-call if you will, a few weeks ago, and I didn’t really know where we were going to go from this.
I didn’t know like how many topics can we talk about within the, you know, the theme, if you will, of talking about legal things, when it comes to membership. And I feel like we almost had to like stop after a while because we’re like, whoa, this could be like a three hour episode. So I’m really excited to dive in because a lot we co we uncovered a lot of things that, I knew I wouldn’t normally think about when it comes to.
Thinking about the membership or the legal side of memberships. And so before we dive into that, let’s have the, both of you introduce yourselves and let us know, how specifically you work with it from a legal perspective work within the online business space. Autumn, do you want to start?
Sure. So my name is Autumn Witt Boyd.
I’ve known Rick for a bit and you were on my podcast a while ago, Rick. I founded a small law firm, a boutique law firm, that we refer to as the AWB Firm for my initials, about six years ago. And we have grown to now four attorneys and support team, and we work exclusively with online businesses.
So mostly coaches, course creators and definitely a lot of memberships as well. my background I’m a copyright and trademark lawyer, but we do a lot of contracts and helping people with their corporate set up. we now have two employment attorneys and I’ll toss it to Chanteé to give her background.
My name is I’m from New York. I started working with the AWB from now over a year, which is crazy, cause it’s time went by so fast. I’ve been learning, a bunch of things and been focusing on drafting contracts and helping entrepreneurs in the online realm now for over a year. and I’ve been exposed to a lot of different topics that we’ll be discussing today that I think is going to be really beneficial, for those tuning in.
Awesome. when, when we, as online business owners, when it comes to legal, I guess it’s kind of like. Any type of legal or insurance, we don’t normally think about it until we actually need it. And so that’s really, I want to go through that sort of lens today, if you will, when it comes to memberships and start, start talking about like, what are the things that like, what’s one thing that if we are creating a membership or maybe we have a membership already, what is something that we’re not, we’re likely not thinking about that we should be.
And I know this is a many different topics here, but we’ll start with one and then we’ll go from.
I’ll start contracts. You need a contract. I think a lot of people create memberships and they’re not, thinking that they need to have, terms in like terms documented. Right. for members to actually read, even though a lot of them don’t read it, it’s really to protect your business.
You definitely need a contract in place all the time. I think that’s where we can start. That’s a good start.
So when you say contract, are we talking like the terms and conditions on a, on an order form? What specifically, what, what kind of contract specifically we talk,
Right. So when, for example, if a member, since you have a membership, when your members actually want to enroll in your program, Yeah.
Terms and conditions of use, right? That’s going to lay out the entire program, the services that your members should expect to receive from you, your refund policy, your termination of policy, everything should be laid out in this agreement. So that before your actual members enroll in your program, they’re given the opportunity to read these terms and then agree to these terms, which essentially signifies that they understand what they’re signing up for and what they’re getting themselves into before actually participating in the program.
Gotcha. Now, when it comes to a termination policy, I assume that you’re referring to, if the membership owner.
It sounds terrible terminates for one of their members. Is that we’re talking about here?
Yes. And it actually goes both ways, right? Like if I was a member, if I didn’t want to participate anymore, there should be clear terms that lets me know how I go about removing myself from the program. And then what that looks like, right?
Like what results from me, giving you a notice that I no longer want to participate. Do I still have to pay? even if, even though I’m not no longer participate in the program, do I still have to make payments towards the program should be terms laying out every step of the way. So things are, clear and transparent
To the member.
What about that flip side? If I’m the membership owner and I basically want to kick somebody out for any variety of reasons, why do I need, why do I need that sort of clause? If you will, within a terms and conditions or contract. Right.
It’s really to cover you because as of late, what we’ve been seeing, are a lot of our clients, previous clients wanting to, ask for refunds and they’re asking for refunds, even though they completed a program, they’re asking for refunds because there’s no clear terms in the policy.
I mean, not the policy, but in the agreement, letting it be known how they can actually remove themselves from the program. it’s really just to protect you the business owner. hopefully that makes it
Even more deeper into that. Okay. So let’s come back to that because that’s really, really important.
And that I thank you for clearing that up because now you, as soon as you said that Shontay, I was like, oh, okay, got it. If they violate our terms or whatever, and which we’ll talk more about, and we’re like, you know what, you’re out. And let’s just say, they’ve paid for the year up front. That’s what we’re talking about here.
What, like what governs that if you will or what that entails, right? Correct. Gotcha. Okay. Now with this said, from a terms and condition standpoint, on an order form, the million dollar question, and there’s been so much confused and confusion around it, I I’ve been super confused around it for years.
There’s a checkbox, right? Normally it’s a checkbox that says I have read the terms and conditions. The terms and conditions are linked. If somebody checked checks the box, is this legally binding? Yes, this is the greatest. I think we should just stop you right here. Okay. So, all right. So it’s, it is legally binding.
Federal law, Rick, that I’m not going to go into, but they basically says something that is, he signed and. Counts. As long as like Shontay said, they have the opportunity to read it. So like you mentioned, you want to have it either linked or in a scroll box or some way that they can, you know, we don’t want them agreeing to something they’ve never looked at.
But yeah, as long as they can re they have a chance to review it and then they do something affirmative. So we don’t want that check box. Like pre-checked, they have to take some action or they have to click a button or do something that says, you know, by doing this, I agree.
And is there a specific you just mentioned, is there a specific language that we should be using in next to that checkbox there by clicking this box?
I agree to the terms and conditions, the terms and conditions are linked. Yeah.
It’s, there’s no magic language. You just want it to be clear and it can be in plain English, just like you said, we’re big fans of making things easy to
Understand and, and not allowing them, if you will, to finish the checkout process without that box being checked.
Yeah. All right now with a
Membership, you know, if you were doing, like, if you had a 10 person mastermind or something where someone may be wanting to negotiate some of the terms, even then I might not negotiate, but you can see like, or a one-on-one engagement. you know, you might give them the chance to go back and forth with a membership.
You’ve got a lot more people you do not want, you know, Sarah has these terms and bill has these terms. You want everybody, we, you know, everybody who’s in there agreed to the same thing.
Gotcha. Okay. Are there anything else that, are there any other things that should be included in that, in the terms of the conditions in the contract?
So we mentioned lay out the program, the services that are being offered in the program, the refund policy, termination policy,
Yeah, something we’ve been dealing with a lot is, with a membership often there’ll be some sort of community aspect, whether it’s a Facebook group or a slack channel, or, you know, it could be even boxer, whatever.
But having some kind of guidelines in your terms and conditions about how we expect people to behave in those channels. and that will largely depend on kind of your values and what you care about as the business owner. but if, you know, let’s say you have, a DEI lens that you are really wanting to, make sure that people are respecting differences.
You would, you could put that in there and you can also include language. We’ve been mentioning termination, that if people misbehave, you know, that was grounds for termination probably without refund and that you’ll remove them from the group again, just like Chanteé said, we want to be really clear and transparent on the front end.
If you’re coming into this space, this is what we expected.
And when you, and so when we’re, I’m so glad you’re bringing it up because that, that provides clarity also before, from what we were talking about before now, are we talking about listing out our values within the contract or is it more so just like coming up with what those guidelines are based on the values it’s
Usually, yeah, it could be both.
Sometime, you know, these, these terms and conditions can get really long. So it, you know, sometimes we want to be a little more succinct. and often you’ll have a, you might have rules posted in your community as well. So sometimes we will, and those can change over time. As you know, things come up that you may not have expected that, oh, we need to address this.
So sometimes we’ll just say like, we may post guidelines or rules in the community. And by signing this agreement, you’re agreeing you’re going to be bound by those as well. It’s almost like you’re incorporating the other, the other guidelines there and that can, that can cut a little of that space
Gotcha. And so if we, if we, if the community aspect of the membership is in a Facebook group, for example, and somebody puts the guidelines in the group as does it have to be in a certain format in order for it to comply, if you will, can it just be a simple Facebook post or does that to be a PDF or.
Yeah, no, the good news here is you’re pretty flexible.
So you want it somewhere easy to find, you know, pinned posts, like you mentioned, you know, when it’s somewhere buried. and now you can do so much with Facebook. You can require people to check, you know, that I agree before you let them in the group. And there’s lots of ways to do that.
Yeah. So let’s talk about that for a second, because you know, when, if we’re using a Facebook group and I think a lot of people are, we’re recording this the third ish week of October right now in 2021.
And there’s a lot of people questioning whether they should be building their communities inside of Facebook. And I’m one of those people. I mean, what two weeks ago, when were from, when we’re recording this Facebook and Instagram, one down for several hours, are there other, legal things, if you will, that we should be considering if we are using a Facebook group, as far as the community aspect of a member.
Yeah. I mean, I think like you mentioned, you’re relying on a third-party platform, but you know, we have clients who have their communities on mighty networks. Like I mentioned a slack channel, some of them have, you know, they have them built into their own websites. I mean, anything can go down you’re, you know, you’re relying on technology.
But with Facebook, like with MIT network, you’re a little more in control because you’re paying for that. You’re, you know, the business owner is like a subscriber. so you’re receiving a service. Facebook can change the rules and they can and do, so if you’re, you know, you’re in their playground and, The flip side of that is, I don’t know what you’ve seen.
Rick. We have some clients who have really large Facebook groups who have tried to move them off and found that engagement went way down because you’re trying to teach somebody to go to a different place that they’re not just, you know, scrolling and kind of frequenting for other things. So there’s pros and cons to any
Jessica to say that there’s definitely pros and cons to it.
It makes it very easy for people to jump into the group because most people are on Facebook on a daily basis. there’s the con of it that, you know, if it’s a, if it’s a big membership, for example, if it’s a big community, you know, the, the business owners posts might not be seen because of the algorithm for what have you, which is not, which is not a good thing.
I would say legally just quickly, you’ve also got to remember, you’ve got to abide by the Facebook terms of service. So there may be some things you can’t post about in a Facebook group that may get blocked or filtered or. especially if you are, you know, maybe have a political topic or maybe, you know, I have a client who’s a boudoir photographer and like has had a lot of trouble navigating what she can and can’t post on Facebook.
Cause it’s more, you know, sometimes seen as a more sensitive topic. So
Yeah, there’s so much. what about, well, let’s just, let’s, I’ll throw it back to you all. What, what is something else that we’re likely not thinking about? So we have the contract, we have the, you know, the behavioral expectations, if you will, from within the community, what’s something else we’re not thinking about.
I would love to hear Chanteé talk a little bit about like protecting the name of your membership, what that can look like.
So, as of late, a lot of our clients have been, discussing, protecting their actual name of their members. I’m trying to think. There’s so many things you could do. whether that be trademarking, trademarking, your membership name, and then having, I mean, I’m piggybacking off what you guys just discussed with Facebook, right?
So there’s a lot of groups on Facebook that have similar names. and then just again, piggybacking off of protecting, your membership names, you want to think about, your brands and then, just the many different ways you want to utilize your name. But I think the main thing is to protect it the main way you want to protect it is by trademarking the name.
So what if we have, what if we have the same name as other people? Like, so for example, my accelerator program, I’ve, it’s been named accelerator for several years now and it’s like, everywhere you look the seventies using exit, I’m not saying like, oh, because of me. Everywhere you look it’s accelerator accelerator.
And so if I didn’t have so much quote-unquote brand recognition of the program, I would absolutely change the name, but I’m not going to, but what, what if we run into that sort of situation?
Yeah. Don’t you have a there’s other words in it though. Aren’t there. It’s not just the accelerator.
Just call it, you know, it’s our accelerator coaching program.
Yeah. Yeah. So when you think a, and this is great, if you’re a newer membership or maybe if you’re starting something new to think about as you’re choosing a name, there’s kind of a spectrum, sorry, this is not a visual Podcast, but imagine like a ruler or a rainbow. On one end is really protectable trademarks.
So those are things that are like all these weird app names, that are made up words. So those are your most protectable trademarks. And then on the other end are just common words, like clock or glasses or whatever. So in the middle is where most of our things are. but as you’re naming things, if you can choose something that is not super common, you’ll be more likely to be able to protect it and less likely that someone else has already using it or that lots of people just start using it because it’s kind of a common kind of catch phrase.
Tom’s, don’t use accelerator. It’s 187. People are already using that.
Yeah. I mean, the rule in trademark law is if you have something that is distinctive, that the just identifies your business, the, and you’re the first one to use it, then you have all the rights and you can stop other people. Now it’s expensive and time consuming to do that.
But you have that, right. if you’re choosing a more common name, it’s just like, whack-a-mole, it’s really hard. It’s hard to make sure you were the first and it’s hard to then shut down other people. I mean, we have a client I’m not going to mention their name, but I think Sean Day, this is what she was thinking about.
That has kind of a, some common words in their name. And we’ve been trying to shut down some Facebook groups and it is it’s literal whack-a-mole and we were just sending out cease and desist letters
So, but on the flip side of that, you know, there’s like we said, there’s pros and cons to everything.
You know, using descriptive words makes it really easy for people to know what you’re selling and what you’re teaching about or what you’re, you know, the topic of your membership. So gotcha. Online business. I don’t know that, you know, trademark rights are the, be all end
All, so that brings up a good point.
And this is, can we talk about this for a second? Just in relation to our overall online business, you know, we’ll, we’ll sort of put memberships, if you will, to the side, just for one second, how important is it to trademark the name? That we are using in our business, whether it’s a course, whether it’s a podcast, a YouTube channel, whatever it is, how important is that?
It really depends on how important it is to you. If I’m being, if you were to see someone utilizing your name, how upset would you be? Right. how would that affect your business and the revenue in your business? Like these are things that you have to consider, like, how do I want to utilize the name? Do I want to just use it?
For course, do I plan on creating a book? Do I want to make, like, think of all the ways in which you may want to utilize your name or your brand name. and I think that would help determine how important it is to protect. it shouldn’t situations, you know, we have some clients that are just like, you know, I don’t really mind, you know, if I was to see Autumn using this, I wouldn’t be upset if Autumn was to create a course using this name, I wouldn’t be upset, but then we have other clients that would be extremely upset because the plans they have with their brand name.
So, I think you should start there in determining whether you should move forward and spend the money in the time, like Autumn mentioned in protecting your brand name.
Yeah. Following on what Chanteé said, it’s we like to think about this as kind of a proportional. We think of most legal things as proportional.
So if you’re a newer business, you’re making, you know, $50,000 in annual revenue, a trademark is not really even something. I think you should worry about if you’ve got a million dollar membership and you’re wanting to grow it to 10 and you’ve got competitors nipping at your heels and copycats, like that’s a different discussion.
Yeah, cause I was, I was on apple podcasts, literally. Actually this came up last night, I was on apple podcast looking for something and I happened to see a Podcast name and it was the exact same name of another show with one additional word at the end, like everything was the same. And I was like, how is that?
Like, how is that happening? You know? yeah. Anyway,
So you can have trademark infringement, but it’s on the business to actually enforce their rights. Like there’s no overlord on apple podcast checking to make sure
So legal overlord.
Sometimes we wish there was make our jobs
Easier. So, so what about, so speak.
So within the realm of trademarking stuff and protecting what we’ve created, what about the content that we are creating within a membership? How is, is that protectable? Is that a word? And if so, how do we, how do we go about.
Yeah. So this is, this is my personal favorite. Rick, I’m a copyright lawyer by training.
So yes, most, most of the content in your membership is going to be protected by copyright. And, and I should get my disclaimer, nothing Chanteé and I are saying is legal advice. This is just information. but where are us lawyers? So in the United States, as soon as you create a video or a blog post or a worksheet, or any of the content that we typically see in memberships, if it’s out of your brain and like into a computer file, a PDF or a video, it is protected by copyright.
So you have that kind of basic level automatically. Okay. The downside is you cannot file a lawsuit until it’s registered with the U S copyright. Yeah. So that means if it’s something you really care about. And we think of this proportionally, just like the trademarks, cause it’s expensive to enforce your copyrights, just like it is for trademarks.
But if you do think that you’re, you’re at risk of having someone copy you and you might have to enforce those rights, we do encourage our clients to register their copyrights with the copyright office.
Now, I don’t remember if it was you Autumn or Chanteé when we spoke earlier, you brought up a specific example in this sense, obviously we weren’t talking about a specific, you know, naming a client, but like, do you remember what that was?
The example from protecting, protecting a piece of content? It was a digital planner. Oh yes. You remember that? Can you, can you, can you just cause digital planners and also physical planners or, you know, they have been all the rage now for a few years now and they continue to be, so what was that story that you share with me?
We have a client with a very successful membership, very large lots of members. And she has a, digital planner that she also sells as a physical item. that’s only available in her membership to her members. You cannot buy it in the marketplace. And we found someone had put it on Etsy, a digital planner, and they’d made like a couple little changes, but it was basically her exact planner.
And so we were able to, we have registered that copyright because it’s a big part of her business. And so we sent a cease and desist letter and happily, it was taken down. It was resolved very quickly. That is not always the case, but this was one where it was like the, it wasn’t like somebody took some concepts and made their own, like, not everything is protectable by copyright.
Like you can’t, you can’t copyright a calendar. but there were some pretty specific concepts in there
That it changed the font of like the page
Number. The font was not even changed. Like the colors were, this
Was like, they like added some digital stickers to it, but it was the
Exact, so, so would the, in that case there would, the digital planner have to be is a cop.
I always get. All right. Let’s, here’s a good, very quick time to difference between copyright and trademark. I always get them mixed up.
Is, this is just source indicator. So the first thing you think about is your actual brand. So like for example, like I think of when I think of Nike, I think of the check, just do it, the, the M from McDonald’s you already know when you drive by the golden arches, so they don’t necessarily have to be symbols, for logos rather.
They can be just, they could be names that represent your business. that is your brand. Whereas we copyright, like Autumn mentioned, these are like anything written down. So like anything, any idea put in a tangible form. So like a book, music, right? Like when you write music, anything tangible that you write down, just think of copyright.
Gotcha. And then you have like written ideas.
So what would that digital planner be example of copyright? Yes.
Okay. So maybe like the name could be a trademark. It can
Rush to get like they can overlap. So that’s another thing I think we’ll struggle with. They can overlap.
So if the membership is trademarked, does that mean all the content in there is protected underneath that?
No brand name.
Okay. Okay. So in this, in this example that you’re just mentioning the digital planner would need to be copyrighted
Into everything that’s inside
It. Gotcha. Okay. Okay. what’s the cost of somebody. You know? Well, before I ask that question, cause I know people listening right now are saying, okay, all well and good, but how like what’s the process for doing this?
And like, what’s it going to cost? Obviously there’s a DIY, you know, route that somebody can go. And then there’s obviously somebody that can, you know, come hire your firm to do it for them. What are we talking here? As far as if somebody wants to do it themselves, what does that process look like? How long does it take?
How much the costs, that sort of thing.
Yeah. So it’s two very different processes. So copyright registration, I’m actually not mad at anybody who wants to. Do a DIY, the system is pretty straightforward. It’s an online firstname.lastname@example.org filing fee. Right now, I think is around $75 per work. And then like an online course would be a work or like all this stuff in your membership could be a work, as long as you’re selling it, like in one package.
So you can bundle a lot of stuff together or like a book would be at work. that process is pretty quick. It’s a form. Some of it’s a little confusing, but if you mess up, it’s not that big a deal. they’re pretty forgiving. And that PR right now it’s slow because everything’s, you know, working from home.
And, so that takes like six to nine months to actually get your certificate. But there’s not a lot of back and forth. It’s like you filed the form and then you just wait. Trademarks on the other hand, it is almost what I would call adversarial. Like it’s the trademark offices job to deny you kind of claw and fight well.
So it’s, it’s just a different purpose. So copyright, we want to encourage people to create lots of creative stuff. So it’s, the incentives are different with trademark. The government is giving you kind of a monopoly on that brand. You can stop other people from using it. So they want to be very careful with who they give that monopoly to.
They want to, they want to make sure it’s not too similar to something else that they already gave them anomaly to. and as you can imagine, like the. The more brands are registered, you know, there’s fewer and fewer words available. So they will search the database and try and make sure that you’re not too close to somebody else selling similar stuff.
And then, so that process, it used to be about a year and now it’s about a year and a half. yeah. And there’s typically a fair amount of back and forth with the us patent and trademark office attorneys, trying to convince them to get you through and sometimes other. Companies can try and stop you.
Like there’s it, it is a complicated process. It is not one that I recommend people. DIY,
I’m just going to say, so what I’m hearing is don’t do this
Yourself. And so that’s why when we talk about, you know, what’s worth protecting it’s, it’s expensive. Even if you’re DIY it, the filing fees started, I think 2 75, 4, and they go up considerably from there, depending on what you’re trying to protect.
Your legal fees are going to be probably a couple thousand dollars. If you’re working with someone who knows what they’re doing, if you’re using legal zoom, it’s not going to be that much, but you get what you pay for.
Yeah. So you just want to, we always want to make sure that our clients are going to get an ROI on, you know, cause it’s time and money.
Gotcha. Okay. it’s so interesting. Like the stuff’s fascinating to me again, because we don’t normally think about this stuff right. Until unfortunately it’s too late for a lot of people and then something comes up. now I want to go back to, some of the things that we want, want to make sure that we’re including in actually, before we do that, speaking of, of content within a membership, we, what about if we have a guest, if we bring a guest quote, unquote expert into our membership to do a special presentation, or, and I want to talk about, I want to talk about live events also.
And so I don’t know if this is different, but if we bring in a guest expert, whether it’s virtual to do a training or to maybe come to a retreat or something like that, to do a presentation from the contents perspective, Where do we fall? Like, what’s the legal aspect of that? Or is there one I would assume there is,
It really depends not to sound like a lawyer, but it does depend,
It really depends on how you want to, draft your terms. Right. So if you wanted to hire a guest expert to come in, you would discuss with the guest expert, how you would utilize their presentation. Right. how available would you make it? Like after the presentation is over, like one of our clients, when I didn’t want to make a presentation available after it was, wide, you get placed terms in your agreement that mentioned that, if you want to make it available for, for a certain amount of days after the presentation, you can do that.
There are situations where the expert may actually want to give you all of the rights and, in, in the presentation and let you utilize me any which way you want to moving forward. so again, it really does depend on how you would like to use the content, that the expert actually presents at the presentation
Should be in a contract.
People are not
Doing, I think, I think maybe that might, we might name that this episode, like, like that, you know, memberships, it should be in the contract. so wait, so why would somebody, I’m just curious because you know, this came up for us recently and just kind of leave it at that, but why would, I’m just curious, why would somebody.
Not want to, so let’s just say, I go do a presentation for somebody whose membership, which I just did two weeks ago, just as an example, did it live that recording goes into their members area, which I have zero problem with. Why would somebody have a problem with like, oh, it’s only, you can only use this live and not recorded in the members area.
Right. really money. That’s one of the reasons, right? Like you’re thinking of all the ways in which you as cause you’re a walking brand, like how can I make money off of this presentation and all of these other ways, not just in a membership, but how can I then make it available to the public to make more money.
So there just may be other ways in which you may want to utilize that presentation. So that then.
Like if I want to sell it somewhere else and your members have access to it, it’s not as scarce. Right.
Okay. Okay. And, and that also brings up and I would assume that it’s the exact same thing. So one of our accelerator members has this big membership and one way they sell it is they do a virtual summit.
And, you know, it’s just this amazing experience in that specific niche. And then they offer the membership, on the back end of that summit, if they bring in guest experts here to deliver during the, summit. And let’s just say that pers you know, people who attend the summit, turn into customers of the membership afterwards, I’m assuming that we’d want to make sure that this is all, whatever the.
You know, whatever is agreed upon is outlined in the contract for the, the virtual summit. Okay. and
I know a lot of people are probably listening and thinking like, ah, contracts, but it really is just. Forcing you to think about and talk about how, like, how you want things to go and on the front end, rather than on the back end, where we had, maybe you had expectation a and the other person had expectation B and you were not seeing eye to eye, but you didn’t realize you weren’t seeing eye to eye until you have a mess.
You’re talking about that out, I’m like, I’m going to get super meta after this episode, go by. I think I did actually purchase your Podcast agreements. I’m going to use your own agreement for the, both of you for this episode here. Happy to sign it because you know, everything that’s in there. okay.
What else in the contract? I’m just looking here. so we talked about clarity on refund policy. What about chargebacks? Is that something that. We would want to put it in the contract. I actually, I have no idea. I know I have a note of that. I’m like, I don’t remember what that was for though.
In our template we definitely have it. but it’s something that definitely, should be addressed again, just piggybacking off what Autumn and I have been saying this whole time about transparency. You don’t want anything to surprise any of your, of your clients, honestly, to come as a surprise. So yes, it should be laid out in your agreement.
So w in what specifically the chargebacks. So for anybody who doesn’t know what a chargeback for, if I think everybody listening does know what a chargeback is, but like, if you’re, if somebody, if somebody, calls their bank up and says, Hey, I need to, whatever, cancel this payment, or I didn’t make this, I didn’t agree to this.
They can do, they can issue. What’s called the charge back with the bank. And that’s actually not a good thing for the business owner from. A banking standpoint. I am not an accountant. I’m not,
Yeah. It sucks the money back from you. So it’s not great. It’s like a forced
Refund. Yeah, exactly. And so how would we want to include that, that kind of language or what would we want to include in the terms and conditions with regard to chargebacks?
Yeah, so we have language that just basically says, you know, it’s kind of part of the refund policy, honestly. You lay out the refund policy really clearly, whether that’s no refunds or refunds only in certain situations. And then you say, or ours, our language says something like, because this refund policy is very clear.
We do not tolerate chargebacks, you know, and if you attempt to charge back, we will come after you in collection. You know, we can send your claim to collections because basically now they’ve got an unpaid, almost like an unpaid invoice or, you know, amount owing to your company. and that can be useful if you do get in a chargeback dispute.
So what happens with the chargeback is the credit card company, or the bank will say, Rick, we got discharged back. They say it was not authorized. And you can say, no, no, I have a signed contract. And you know, they showed up on all these dates. They did all these things. They used my services, you know, they agreed.
And sometimes, you know, not always the credit card companies are tough on these, but sometimes that will win the day. And so we have had clients who’ve been able to get, get over chargebacks. We just got our first chargeback Rick’s.
Oh, really? Yeah. Yeah. I’m trying to think over the years. So coming up in January of 20, 22 will be eight years.
And I think, like, I think like, I mean, I haven’t had a ton of chargebacks over the years thankfully, but I’ve certainly gotten them. I think I’ve I’ve quote, unquote won one of them, even with all of the evidence that we’ve outlined consumer-friendly yeah, yeah. It’s yeah, but
It’s just, again, it’s like one more thing.
One more advantage in your court to have that in your contract. Yeah. And we do have clients who will send their customers to collections. So that is an option also
When, before or after a chargeback has been initiated either. Oh, really?
Yeah. So let’s say somebody just stops paying.
Yeah. And so, but the chargebacks still like, quote unquote goes on.
I don’t know what the, like, is it on your file or something? I have no idea.
Yeah. I mean, it’s like the algorithm, like who knows how that actually works, but I do think the payment processors, like if you’re getting a lot of them than it looks like fraud or you know, that you’re not being a good business.
Sure. Okay. Gotcha. Gotcha. Now going back to making sure that all the things that we need to include in here, we just talked about chargebacks. Now, what about, do we need to notify people when a new, their next month’s charge, if you will, is coming out.
Actually Research this after you brought it up.
And I was going to say, cause cause California has some sort of,
Yeah, you do have to notify them on the front end. Basically it has to be very clear that it’s a recurring charge. So a lot of memberships, you know, or like a monthly charge that just gets charged to your card. so you have to be very clear on the front end and that would go in your terms and conditions.
You know, that I agree and acknowledge that this is a monthly recurring payment and you tell them how to cancel it. So as long as you’re doing those things, you don’t have to notify them each month. Like, Hey, you’re about to be charged.
Okay. And we’re not, we’re not talking about doing it in any kind of like, you know, slimy kind of way of like, Ooh, I don’t want to tell them because I don’t want them to cancel.
It’s just like from a legal standpoint, you know, and this is the answer to the question of, cause this comes up a lot. It’s like, do I need, do I legally need to notify them that, Hey, you know, just a reminder. Five days from now, the next month, you know, charges coming out and, and we’ve just cleared that up.
Yeah. I mean, from a customer service standpoint, you can decide, does that, you know, is that helpful? I, especially for annual renewals, I do think it’s nice, again, not legally required, but yeah. I mean, I, I, we, we have a million software subscriptions and I do appreciate like, Hey, we’re about to be charged whatever big chunk, because we’re paying for it day.
Yeah. I agree. Now what about, when we spoke before we call that, I think you, the term that you will use was shadow groups. So we have a membership, we have obviously the community, and let’s just say that, and this, this, unfortunately I hear this happening all the time and it, this was something that happened to me as well, where somebody within the community wants to create their own version, if you will, or create a, Separate to your program and take, if you will, some of the members within that, it’s like, they’re not like leaving the group.
I mean, there’s different situations. I’m sure. But what I’m thinking of is they’re not leaving the, the, the membership or the program. They’re just creating an outside group to be able to have conversation with what’s is there, because we, as a, as the business owner, we can, obviously they can do it without us knowing it, but from a legal standpoint, what can we do to protect ourselves from that happening?
Because there’s repercussions, there’s potential repercussions that can be harmful to your business.
Absolutely. we’ve actually seen that happen a couple of times, as of recent, of course it goes back to those terms, right? So within the term, do you want to list. Literally every, every single scenario you can think of.
And this unfortunately is one that, like I just said is popping up more frequently, in usual, I think. and so yeah, you want to list out the do’s and don’ts right there. Kind of go into the conduct piece that Autumn mentioned earlier, and just list out what they can and cannot do while participating in your group.
It’s kind of hard. Yeah, you’re right. It’s kind of hard to police because they don’t have to tell you. Right. And it’s, it’s a, it’s an interesting, it’s an interesting, topic because, and I don’t want to get too deep into the whole legal Dargon stuff. It’s, it’s just a weird space because a participant is doing it.
But the first thing you want to do is have terms in your agreement that lays out. the things that you can and cannot do Weill in my group, right. And mine can’t steal my members, can’t steal my content. and you can’t then create a group with a similar brand name and or content that I need to you and then utilize it and act as though you created it yourself.
And just want to list that out in your agreement.
That brings up another point, too, that I just thought about. And so again, put it in the agreement is what I’m hearing. It’s got to be in the contract. What about if, and this is, I’ve seen this over the years, you know, this has happened. It’s very flattering, right?
When it happens, but it’s also, Hey, there’s taking their content and it, it pertains more sort of like an online course where some company, some, some person who started the website starts taking somebody’s course. They go in the course, they purchase it and then they turn around and sell it for like $49.
Right. They take a thousand dollar program and sell it for 49 bucks. Is it an and my, my place on all this has always been, it’s just not worth it to, you know, from a financial perspective, from a time perspective, you know, mental energy perspective to like chase these people down who are doing it. Can we talk about this for a second?
Those websites are gross, but there’s a lot of them. And we did have one or two clients. Who’ve asked us to look into this and what we found it was worse than whack-a-mole. A lot of them are not in the United States, the web, the so there’s, you know, there’s things you can do under us laws to, you may have heard of a DMCA take down the digital millennium copyright act gives you ways to take down content that’s being posted on other people’s websites.
But, if they’re outside the U S you don’t have as many tools short of, you know, going to China and filing a lawsuit or the Philippines or wherever they’re located, which is, you know, again, if you have a a hundred million dollar course business, maybe that makes sense economically. But for most people, like you said, it’s just, you’re throwing good money after bad trying to chase them.
Yeah. I try to ignore some of that. I mean, I hate it. It’s a, it’s a noxious, but.
With regards to all this that we’re talking about.
You mentioned, you know, outside of the us, these terms and conditions that we’re creating, are they real, are they applicable to, if we have members who are outside of the U S if they’re in other countries, do our terms and conditions apply to them.
Yes, they do apply. I don’t, I don’t want to go down the rabbit hole and all of these things, but all of those things wouldn’t need to be considered.
Right. But you do want, again, to have terms drafted terms in your agreement that may clear, what law you like to be applicable. so the hope is with having an agreement, wherever you drafted the agreement, wherever your business is located, that is the jurisdiction, the laws of that jurisdiction will reign.
Right. without having an agreement,
Even though somebody lives say in a European country.
Yeah. it could still get, it could still get a little Rocky, but yes, but I’m going to say yes, I’m going to keep it there. Yes.
Interesting. Okay. So
The answer is also yes, but you’re going to be on stronger footing.
So I’m curious now, because that happened to me actually this year where somebody in a different country just like peaced out after a few months with just went silent. No good reason. And signed the contract, still a considerable amount of money outstanding, but is in a different country. And I was just like, like what are my options?
Tricky because, and this is why I would say, if you’re doing it by yourself, you have to do your due diligence in figuring out the rules and regulations, wherever that member is located, even though us law, you know, as mentioned as a jurisdiction or country in your agreement, you still have to refer.
So how they do things in other countries, like you have to take that into consideration, which is what Autumn and I do. We do research on that, right? Like we’ve had pilots that have went through similar situations, and we’ve had to do spot Research, and while having an aggressive. that lists out, you know, you want us logs, we’ll find more specifically a specific state.
It can still get a little Rocky and you still have to do your due diligence in researching how things are handled in that
Country. So we obviously get to decide whether it’s worth it or not.
Yeah. And as a practical matter, I mean, there’s legal and then there’s practical, like the cost of going, like, even if you could, legally, let’s say someone was in Germany, like even if you could legally try and enforce your contract there, which it may not be enforceable.
There’s some, there’s weird rules around like refunds and notice all of that. it’s expensive to, you know, you’d have to hire a German lawyer and file a lawsuit. Like for most, most of these amounts that are an issue are not going to be worth. It’s been, it’s not like you had a $10 million manufacturing contract where you’re like, oh, I’m definitely going to pursue this.
Right. That’s just, it doesn’t make sense
Economically. And I think that that’s a good lens, you know, at one more question, before we start to wrap up here, I think that’s a great lens to view a lot of, you know, if somebody breaks the contract going, you know, asking yourself this question here, is it worth it to X?
Is it worth it to, you know, do whatever. And just use that as a filter.
We had someone, we had a client recently who hired us. They had hired a service provider and things didn’t go well. and they wanted us to try and pursue a refund, but it was like a $5,000 contract. And you’re going to spend that with us real quick, trying to pursue a re.
So it was just kind of like it stings to kind of flush that money down the drain. But it doesn’t make sense to spend more.
And even then there’s probably no guarantee that that five grand we’ll come back. We’ll come back. Yeah. now as we finished up here, I have a note here talking about payment plans in the B2C space, the business to consumer space, are there nuances that we need to be aware of?
So we’ve got a membership and we’re serving, you know, we’re not serving other businesses, we’re serving consumers. And obviously there’s a payment plan. People are paying monthly. what’s something that we need to be thinking about.
So some things as you do need to be thinking about is whether the. This, the payment plan is going to be considered as a debt. and I’ve done, I mean, it’s fairly new for me as well. but you essentially don’t want to overcharge, payment plan members, ridiculously overcharged payment plan members, to the point where it looks like you’re acting in the role, similar to like a bank or, some type of collection or, or financial institution agency.
So that’s, that’s a new area even for me, but I’ve learned that after doing some research that, you don’t want to ridiculously upcharge your opinion plan members, you kind of want to keep them on the same playing field as, as members that, pay a one-time full payment, for the membership. I can let
Autumn, what’s an example of this.
So like, a weight loss membership would be business to consumer. So let’s say you charge a thousand dollars if it’s painful and maybe it’s a six month program, I’m bad at math. So I’m already regretting these number choices. but so let’s say it’s a thousand dollars if you painful. and it’s, if you add 1200
Over six months.
Yeah, exactly. So you’re charging, you’re doing an upcharge, in the consumer space that can be seen as like Chanteé said, basically like targeting interests. And so now you’re a lender and you’ve got all these now. You’re kind of like a bank. You’ve got all these disclosures you have to give, you’ve got to comply with, you know, it’s, it just takes you into a whole different there’s federal and state rules around that.
And so it’s very case specific. there are certain thresholds of dollar amounts that make a difference. but I would just kind of caution anyone who is doing. You know, a difference of a one-time payment versus a payment plan with a big upcharge in the consumer space. you know, we have a client who doesn’t have this issue, but teaches piano lessons.
So, you know, kind of similar thing, you’re teaching Marketing, that’s B2B or B to E kind of business to entrepreneur. the same rules don’t apply because you’re considered to be a more sophisticated consumer if you’re a, a business or an entrepreneur. but just I Shontay and I’ve been just trying to kind of highlight this.
It’s not, there’s not an easy answer. It is. You need to research and work through because every payment plan is a little different and every, all the rules are a little different. but we’ve just kind of been trying to shout this from the rooftops because we are starting to see consumer complaints be filed.
We had a client who received an attorney general complaint recently, a state, you know, someone filed a complaint with the state, and you do not want to be audited and you do not want to be on those, the radar of those enforcement agencies. so I think it’s something there’s this practice in the online space of doing this, without really understanding that it can be a legal problem.
Yeah, no, one’s taught before we had that conversation a few weeks ago. Like I hadn’t, I hadn’t heard about that and no one’s talking about it. Yeah. So,
And again, you, you know, you have to be a certain size business probably to land on. Radars of the enforcement agencies, but I’m a big fan of like, let’s, let’s do things the right way from the beginning.
It’s a lot easier to, to just keep doing them the right way. Once you get bigger, then all of a sudden have problems.
Yeah. Okay. So are we listening right now? If you’re in the B2C space to make sure you look into this? Yeah. At least Google w you know, everything we’re talking about here, as far as if you charge a one-time payment for, let’s just say your membership, or if you’re doing monthly, make sure that you’re aware of what you should and shouldn’t be doing.
We have a client recently who was in the weight loss space. We have several weight loss coaches that we work with, and she has, started doing a payment plan, but with no upcharge and it’s been incredibly successful. So you take a little risk that people aren’t going to pay. I mean, that’s the downside and that’s true.
That’s the justification everyone’s used for having these huge up-charges for payment plans? Well, I don’t know if people are really going to pay, but she’s had phenomenal success just basically splitting it up into equal payments with no uptown.
Yeah. I’m noticing that more and more where that’s happening.
There is no upcharge on, on a payment plan. and as you just mentioned, I mean, there’s definitely pros and cons to it. And if you’re in the B disease phase, there’s legal repercussions on, on this. That does bring up. I lied before I have one more question. So are we, should we be, well, I know that we should.
How do we approach the whole, especially if somebody is in the online business space and they have a membership and they’re teaching people how to grow their business, for example, can we talk briefly about like earnings disclaimer? That sort of thing. What do we need to, and can that be included in the, you know, sort of the umbrella contract we’ve been talking about here today?
Absolutely. You should definitely have an earnings disclaimer in your remit. a couple of other things I will say is that, you should take a look at the federal trade commission website, which kind of lays out, you know, the, the do’s and don’ts of how you market and promote, scaling, right?
Like mentioning that you can promise, your members to make five K a month or 10 K a month can be an issue, and could be looked at as misrepresentation amongst other things. So, you really want to be careful about the language that you’re not only placing in your content and materials, but also like your website.
You want to be mindful. the language you’re using. So it doesn’t look like you’re misrepresenting anything to any potential customer or client.
Now, can you say something like that, but then also have a disclaimer or is it more so let’s be clear from the language, get from the get-go we definitely want to be clear
From the cause then it looks like it’s it’s it’s not consistent.
Right? It’s like, do you mean this or do you mean across the board? and yeah, so you want to be clear and make sure that you’re using language that doesn’t come off misrepresent misrepresentative of what you can and cannot do for.
This all seems like a lot of work.
We’re pulling up our big girl pants and our big boy pants here where, you know, part of being in business is complying with all these rules.
And I think we’re a lot of Cowboys in the online space, but yeah. Yeah, no,
I’m, I, I, I’m obviously joking. It’s just, this is an integral thing that we need to be talking about and thinking about in our business. Yeah. If you’re just starting out, probably not so much, but as we’re growing here, as we are Chanteé to use your word to use the word, I talk about a lot too, is scaling your business.
As we’re getting, you know, as the business is becoming more mature, we need to be thinking about it from a legal perspective and protecting ourselves and just being very clear on look what this membership is or what this course is or what this coaching is and what it’s not. And just being very clear.
And as, as we’ve learned here today, make sure it’s in a contract. you’ll have templates and stuff. That pretty much cover all word. I’m just looking through my notes here. Like all the different things we talked about here today, and then some, I think I’m, I am a proud affiliate for you all. So
Thank you for this disclosing that Rick and Kay, and that’s one of your legal obligations as an affiliate is to be upfront about.
I think that’s so weird when people don’t do that. I don’t hide. I’ve never hid from it. It’s just like, here’s my link. Here’s my pretty link that we’ve created. That’s so interesting. So yes, if you are an affiliate for somebody, and you are talking about and using your link, you have to disclose that you are an affiliate.
Whether it’s your podcast, your video, blog posts, email, Instagram posts, whatever it might be.
So, you can check out… do we have a deal? I don’t even know what it is if we do.
Yes! So, we’re recording this at the end of October, 2021. So, in November 2021, we are running what we’re calling the Prep to Scale Challenge, which is throughout the month of November. We’re going to help you look at your business, figure out what you need on your website legally, your contracts, and how to protect your content.
So that challenge, if you use Rick’s link to sign up, is free. We’re charging $27 if you pay, if you want to purchase it. For our affiliates, we’re giving away for free. So, check that out. We’re going to have four Q and A sessions with a lawyer, I’ll do some, some of the other lawyers are going to do some. So, you know, if you’ve got questions, like Rick had a lot of questions today, come get them answered!
And we only talked about memberships. Like I said, we could talk for three hours on this stuff.
But use Rick’s link. You can sign up for that totally free for the month of November.
Oh, cool. I did not even know this until this moment, that number one that all of my listeners here are getting this for free. I didn’t know that until right now. Thank you both for doing that.
So, y’all just go to RickMulready.com/AWB. I’ll link it up in the show notes for the episode here today, as well.
Autumn, Chanteé, thank you so much for coming on here and making the legal things we need to think about very clear. Because a lot of it can be like, “I’m so confused on language and stuff like that.”
It’s very clear. In addition to the links, I will outline what we talked about here today on the show notes, up on the show notes page for today’s episode. So you can say, “Okay, we need to make sure we have a contract, and et cetera, et cetera, and make sure that we’re including these things and more based on today’s conversation.”
So thank you both for coming on and sharing your expertise.
We love to nerd out about this stuff. So thanks for having us. Absolutely.
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