revenue. I'll make sure it's clear in the contract.
Thanks,
Dave
________________________________
From: Hagan, Ryan Mr (Contractor ACI) [mailto:[EMAIL PROTECTED]
Sent: Monday, June 07, 2004 10:51 AM
To: CF-Talk
Subject: RE: Question about Licensing my CF Web Application
You also need to get the term "revenue" defined. Generally, it is
accepted
to mean gross sales, but not always. As a matter of fact, I've been
told
that the US Accounting Standards defines revenue as commission on sales.
A good example is that in the US:
revenue = gross sales
profit = gross sales - expenses
But in the UK:
turnover = gross sales
revenue = gross sales - expenses
This can be a BIG difference. I would think that a lawyer would bring
this
point up, but you never know.
-----Original Message-----
From: Dave Phillips [mailto:[EMAIL PROTECTED]
Sent: Monday, June 07, 2004 11:26 AM
To: CF-Talk
Subject: RE: Question about Licensing my CF Web Application
Kenneth,
1 - There is nothing up front - this is a risk on my part as well,
however, I developed the application for my own use within my own
company, and so I never expected to have an opportunity to license it
and sell subscriptions to it. I don't have the time, nor the desire, to
do all the marketing, let alone end user support, so I'm pretty okay
without getting anything up front as long as I'm getting a fair deal on
the percentage.
2 - no hourly pay - I'm agreeing to keep the software up to date as part
of the agreement, however, it would be for a specific period of time,
not indefinitely.
3 - 30% on All Revenue of the company, period. so that would include
any customization charges they pass on to their customer (or an increase
in monthly subscription rate for that customization for example).
Thanks for your input.
Dave
________________________________
From: Kenneth Wilson [mailto:[EMAIL PROTECTED]
Sent: Monday, June 07, 2004 10:20 AM
To: CF-Talk
Subject: RE: Question about Licensing my CF Web Application
1) Are they paying you enough up front to make you happy in the event
they never sell it to anyone?
2) Are they paying you hourly for your support efforts or are you on the
hook to train them indefinitely regardless of their sales volume?
3) Is the 30% on customization work over and above what you charge to
do the work? Or do you just get 30% of whatever they choose to charge
for customization?
-----Original Message-----
From: Dave Phillips [mailto:[EMAIL PROTECTED]
Sent: Monday, June 07, 2004 11:05 AM
To: CF-Talk
Subject: Question about Licensing my CF Web Application
Hi all,
I have developed a web application and have found a company that is
wanting an exclusive license to manage, market, and sell subscriptions
to my web application for me. I'm comfortable with the arrangement, but
I'm unsure as to what to charge as a license fee.
I have gotten them to agree to allow me to earn a royalty based on a
percentage of the revenue they charge for each subscription. The number
that has been thrown out is 30%. So for example, if they sell a
subscription for $10 per month, I get $3 per month and they get the
rest.
I do not have to put up any money. I will be continuing to develop and
enhance the application as well as supporting it technically. However,
I will not be providing END USER support. I will provide support to the
company that is marketing it. They will deal with the end users.
I will also make myself available to customize the application for any
of their customers, however, I'm sure they will charge extra for this,
so in essence, I will get extra since I would get 30% of the revenue.
My questions are as follows:
1. Is 30% a fair amount? What's the standard?
2. Does it sound like a good deal to you? Is there anything I should
be asking for that I haven't mentioned?
3. Any other comments/suggestions?
Thanks for your input. I welcome it. This is the first time I've had
the privelege to do this, so I'm very excited, but want to be sure I do
it the right way.
Sincerely,
Dave Phillips
[EMAIL PROTECTED]
________________________________
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