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partnership - percentage of sales per unit

PablowPablow subscriber Posts: 1
edited February 2008 in Thought Leadership
I am setting up a business and I have approached someone who has established a name and has a strong brand presence. He is interested to parnter - I can use his name for PR, and has suggested we establish a partnership where he gets a % of the sales at a unit level - for example - 5% of the profit when a unit is sold.
Does anyone have experience with this type of partnership, not sure how to setup an agreement to measure his involvement etc.


  • 05mustang05mustang subscriber Posts: 2 Member
    Does it have to be a partnership?  You may not want to take on his liabilities. 
    It could be cleaner if you simply sign a sales agent or distribution agreement where you market or sell his product in exchange for a commission.  If the revenue is important to you, a reseller agreement may be the way to go.  Either way you can spell out the branding and logo rights that you`ll need to market the product.
  • PablowPablow subscriber Posts: 1
    Hi 05mustang,
    Yes we are setting up a partnership as i have a project which he can endorse. He has the name and can help with PR so together we can team up. As I haven`t setup a partnership in business I am not sure whats the best way to go about  it. My question would how do you measure he is keeping his side of the partnership if he is also acting as a mentor?
  • 05mustang05mustang subscriber Posts: 2 Member
    Your question didn`t come through too clearly but in the US you would need a partnership or agreement or articles of formation that clearly spells out what each of you is contributing (it can include mentorship etc.), how profits will be divided (after expenses), and how dissolution of the partnership can occur.
    Looks like you`re in Australia so my suggestion is that you check with a good attorney in your area.
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