Whichever agreement you choose to use for the specific purpose, always plan your contractual strategy first. The purpose and goal is to make it as easy for the customer as possible to enter into an agreement/partnership with you as a supplier and to optimize the use of the agreement during the full life of the agreement.
A few basic points to consider with out going in to much details:
- Prepare different methods to finance the agreement/deliverance:
- Indirect financing, letting the franchises to finance through membership/monthly payments
- Renting / Leasing. Rental of services is deductible in the accounts in several countries, such as in Sweden about the service. Leasing /Renting is often added to operating budget, which some times doesn’t makes it easier to invest.
- Propose 30 years contract instead of usual 36 months? Provides a sense of security for the customer as you ensure that delivery is guaranteed for a long period of time. Add termination in 36 months, so the customer knows that they have everything to win. A good way to enter into long-term agreements that place demands on both.
- Probationary time?
- Use the tax or legal regulations to improve interest. For example. so some countries have the possibility of loss deduction without any limitation in time which is extremely powerful used correctly.
There are many more areas than just funding methods that are important. For example. the structure of the agreement itself, a So-called General Agreement or Standard Agreement makes it easier to approve, even if they are made with additions to it.
This is an extremely fun and exciting area where I usually teach more about tactics, agreement structures, funding methods, how to present and agreement etc. and I’ll get back a little later.