Distribution or Sales Agreements and You.

What is a Distribution Agreement

Distributors or sales professionals are always trying to find the next market, customer or potential lead. Whether you are a manufacturer looking for a new distributor or a sales professional eager for a new challenge, you’ll likely come across the need for Distribution Agreements.

WHO NEEDS A DISTRIBUTION AGREEMENT? If you are a seller, manufacturer, distributor or sales professional, you will probably want to get your sales agreements in writing. Not only do the sales need to be addressed with the proper agreements, but if you enter a distributorship arrangement, you’ll need to be sure the details are written down.

WHAT NEEDS TO BE IN A DISTRIBUTION AGREEMENT? Your agreements need to be thorough. This means you must ensure nothing is missed or stated wrongly. The products in question, advertising, supply chains, territories, the terms and length of the contract, all of these must be included. A good Distribution Agreement makes it clear to all parties involved what they can or cannot do, as well as what their obligations to the other parties are.

AREA DISTRIBUTORS AGENTS? Maybe. You can grant distributors the powers of an agent, or you can rely on them solely as distributors. A good Distributors Agreement will make it clear whether the distributor is also an agent, and if so, what their powers and limits are. An agreement that grants power to a distributor but does not clearly state whether the distributor is an agent is trouble waiting to happen. Be sure each party knows what to do, what their status is, and whether they are an agent.

WHAT ABOUT TRADE SECRETS? You can provide for proprietary protections in Distribution Agreements as well. If your business involves intellectual property, trade secrets or other confidential information, it’s important you draft a Distribution Agreement that clearly states the conditions under which these concerns are dealt with. Nothing is more troublesome than being unsure of what you can or can’t reveal when it comes to proprietary information.

CAN I BECOME AN EXCLUSIVE DISTRIBUTOR? Sure, if it’s in the agreement. Some manufacturers have multiple distributors, some have regional or territorial distributors, and others have sole distributors. All of these can be granted exclusive or non-exclusive rights, depending on the terms of the agreement. Being knowledgeable of exactly what the Distribution Agreement states it essential whenever you consider entering into one.

HOW MANY DISTRIBUTORS CAN I USE? If you are a manufacturer or party who uses distributors, the number you use is up to you. However, if you plan to grant exclusive distributorships, non-exclusive distributorships or other set-ups, you’ll need to make sure your distributors are aware of their responsibilities. You can run your business the way you wish, but ensuring each party knows what they can and can’t do is essential.

The use of a distributor, or going into business as a distributor, is a common business practice that all too often is left to a conversation and a handshake. If you are serious about your business, you will want to make sure your Distributor Agreements are drafted correctly. A good Distribution Agreement is one that all parties can rely on so no-one is left in the dark.

How do you choose a good franchise opportunity?

HOW TO SPOT A FRANCHISING OPPORTUNITY

What should you look for when looking for a franchise to buy?

choosing a franchise

There are a lot of franchises out there, and a would-be franchise owner needs to be able to differentiate between a good opportunity and a potential disaster. Franchise owners want you to buy their product (the franchise) because that is how they make money. But you need to be able to tell the difference between the shiny sales pitches and the real diamonds underneath all the hype. Here are some simple things you can do to spot a great franchising opportunity:

Do your homework. The simplest, most effective way to ensure you know how to find a good franchise is first learn everything you can about business, franchising and all that goes with it. If you can’t tell the difference between a balance sheet and a sales invoice, you need to take some time to learn some more. Nothing is more reassuring than being able to rely upon your own knowledge instead of taking someone’s word for it.

Find out about the company. In addition to increasing your knowledge about business basics, you’ll want to research the company as well. How long have they been in business? What do their numbers look like? Do they belong to a professional organization like the International Franchise Association? If not, why not? There are some scam franchises out there, so you’ll need to ensure the company is on the up and up before you commit. You may need to hire a reliable accountant or business analyst to evaluate some of the details for you, as they know what to look for when searching for strong business fundamentals.

Where do they stand? If you are interested in a franchise, you’ll want to learn as much about them as you can. Though you don’t need to know everything, the most important thing you can look for is their performance as compared to others in the industry. If a restaurant is seeing sales increases of 15% per year, that probably sounds pretty good. But what if everyone else in the industry is experiencing 25% growth? Not so good now, is it? Finding which business is on top, and why, is key to finding a good franchising opportunity.

How do they spend their time? A great way to determine whether or not a franchise will be successful is to look at how the franchisor (the business that sells you the franchise) spends their time. Are they focused on growing the franchise base, or are they focusing on the franchises they already sold? Be careful here. Though the latter may seem to be the better indicator of success, it isn’t. A company that is focused on growing their franchise, increasing name recognition and getting a broader customer base is much better than a franchise that spends all their time helping their franshisee trying to get going. The first is building a long-term business, while the second doesn’t have a strong growth plan.

For more information and to download a DIY Franchise Agreement please click here

How to write an employee reference letter

There are a few simple guidelines for writing an effective reference letter.

Firstly if you don’t feel comfortable writing the reference or don’t feel you can’t say anything positive about the person involved then its better to tactfully decline. It is far better for the individual to find another person who can provide a positive reference for them.

References should contain the following points -

• Date
• Name and address of recipient if known.
• Salutation , for example, ‘To whom it may concern’, ‘Dear Sir / Madam’ or ‘Dear ‘Name’
• Statement of Confidentiality – if written to a specific organization for a specific purpose rather than just a general reference. – optional
• State the dates of employment, job title and capacity under which the individual was employed.
• State any other details that may be relevant eg, salary, benefits – optional.
• State the persons responsibilities – optional.
• Confirm that the individual’s performance and attitude was satisfactory or exceptional.
• Briefly describe the individual’s skills, talents, strengths – optional. Aim to be specific rather than vague.
• Say that you would re-hire the person – optional
• Offer to provide further information or provide your contact details for same – optional
• Signature – Yours Faithfully or Yours Sincerely if writing to a named addressee.

It’s up to you how much information and detail you provide in the reference letter.

Be as factual and honest as you can and remember if you can’t say something nice about someone – don’t say anything at all.

If you require other Documents or Forms for managing staff please see Human Resources in the Workplace Document Template Package.