Do you know how to legally protect your membership?

In this episode of Art of Online Business, I’m sharing a replay of a fan-favorite episode from November of 2021 where I sat down with Chanteé Hallet and Autumn Witt Boyd to talk about everything you need to know about legally protecting your membership.

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 Chanteé 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.

In this episode, you’ll learn:

• Why you need a contract with your members
• What information and details your contract should include
• If you should trademark your membership or program’s name
• The downside of your content’s copyright protection
• The pitfalls of enforcing your contract internationally
• Why having different payment tiers can get dicey
• If you should have a disclaimer in your contract
• If you have to disclose when you’re an affiliate for someone

Links & Resources:

• The Art of Online Business website
• DM me on Instagram
• Visit my YouTube channel
• The Art of Online Business clips on YouTube
• Full episodes of The Art of Online Business Podcast on YouTube
• The Art of Online Business Podcast website
• Check out my Accelerator coaching program

*Disclosure: I only recommend products I use and love and all opinions expressed here are my own. This post may contain affiliate links that at no additional cost to you, I may earn a small commission.

Autumn Witt Boyd’s Links: 

• Autumn Witt Boyd’s Instagram
• Check out the AWB Firm

Chanteé Hallett’s Links: 

• Connect with Chanteé on LinkedIn

Please support the podcast by giving an honest Rating/Review for the show on iTunes!

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All right, my friend. Welcome to today’s episode of The Art of Online Business podcast, Rick Moretti here. And we’re going to tap into another classic here on the podcast. This is something that first aired back in November of 2021 and is one of the most downloaded episodes of 2022. And it is talking all about how to legally protect your membership and yourself in your online business. With Autumn, Whitt, Boyd and Shante Hallett from the AWB law firm. And this is really, really interesting because the legal side is, let’s face it, can be a little, a little boring, right? But these are the things that we are likely not thinking about yet. We really should be. And both Autumn and Shanti really laid out for us here in this episode, which is why I wanted to re-air it for you and make sure that you listen later on in the episode here, because we talk about all kinds of different things on the legal side, we talk about payment plans, you know, is a checkbox enough of a legal agreement when it comes to your order form, You know how you have that checkbox. It’s like, click here to make sure that you’ve read the terms and conditions. Well, is that is that is that legally binding? We talk about refund policies, charge chargebacks, you know, contracts, protecting the name of your membership or course. And even if you don’t have a membership, by the way, if you’ve got an online course or online courses, this is going to be super, super helpful for you. So without further ado, let’s tap back into this classic episode with Autumn with Boyd and Shanti Hallett. Autumn Chanty. Can we make legal fun today? Is this possible?

We’re gonna do our best. Thanks for having us, Eric.

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 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 memberships. 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 we uncovered a lot of things that I know 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 and let us know how specifically you work with it from a legal perspective, work within the online business space you want to start?

Sure. So my name is Adam Boyd. I’ve known Rick for a bit. 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 up. We now have two employment attorneys and I’ll toss it to Shante to give her background.

Yes, my name is Shante Hallett. I’m from New York. I started working with the AWB firm now over a year, which is crazy because 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 there.

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 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 kind of contract specifically? We’re talking.

Right. So when for example, if a member since you have a membership, when your members actually want to enroll in your program, you’re going to want. 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 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.

Got it. Now, when it comes to a termination policy, I assume that you’re referring to if the membership owner. It sounds terrible. Terminates 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 for me giving you a notice that I no longer want to participate. Do I still have to pay? Even even though I’m no longer participating in the program, Do I still have to make payments towards the program terms, laying out every step of the way so things are clear and transparent to the member.

Now, 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 a 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’ve 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 a little bit more deeper into that.

But sure. Okay. So let’s come back to that because that’s really, really important and that I thank you for clearing that, because now as soon as you said that Shanti, I was like, Oh, okay, got it. If they violate our terms or whatever, 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 conditions standpoint on an order form the million dollar question and there’s been so much confusing confusion around it. 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 checks checks.

The box.

Is this legally binding?

Yes.

This is the greatest. I think we should just stop here. So. All right. So it is legally binding.

Yeah. There’s actually a federal law, Rick, that I’m not going to go into, but that basically says something that is signed and a checkbox counts. As long as, like Shante 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, right? Yeah, as long as they can. They have a chance to review it and then they do something. Affirmative. So we don’t want that checkbox like pre checked. They have to take some action or they have to click a button or do something that says by doing this, I agree.

Okay. Gotcha. 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, there’s no magic language. You just want it to be clear and it can be in plain English. Just like you said, we are big fans of making things easy to understand.

And not allowing them, if you will, to finish the checkout process without that box being checked.

Yeah. Okay. All right. Gotcha.

Now, with that membership, you know, if you were doing like, if you had a ten person mastermind or something where when maybe you wanted to negotiate some of the terms, even then I might not negotiate. But you can see like or a one on one engagement, 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. Sarah has these terms and Bill has these terms. You want everybody, every 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 and conditions in the contract? So we 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 could be even Voxer or 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 let’s say you have a DIY 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, that was grounds for termination probably without refund and that you’ll remove them from the group. Again, just like Shante said, we want to be really clear and transparent on the front end. If you’re coming into this space, this is what we expect of you.

And when you and so when we’re I’m so glad you’re bringing that up because that that provides clarity. Also before from what we’re 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?

Yeah, it’s usually yeah, it could be both. Sometimes these terms and conditions can get really long, so 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 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. So it’s almost like you’re incorporating the other the other guidelines there and that can that can cut a little of that space out.

Gotcha. And so if we if 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 be a PDF or what?

Yeah. No, the good news here is that you’re pretty flexible, so you want it somewhere easy to find. Pinned posts like you mentioned, you want it somewhere buried. And now you can do so much with Facebook. You can require people to check 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 were 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 we’re from where we’re recording this, Facebook and Instagram went 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 as the community aspect of a membership?

Yeah. I mean, I think like you mentioned, you’re relying on a third party platform, but we have clients who have their communities on mighty networks, like I mentioned, a Slack channel. Some of them have. They have them built into their own websites. I mean, anything can go down. So you’re you’re relying on technology. But with Facebook, like with a mighty network, you’re a little more in control because you’re paying for that. You’re 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’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 scrolling and kind of frequenting for other things. So there’s pros and cons.

I just just going 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 if it’s a if it’s a big membership, for example, if it’s a big community, you know, the the business owners post might not be seen because of the algorithm for what have you, which is not which is not a good thing.

So yeah, and 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 maybe have a political topic or maybe I have a client who’s a boudoir photographer and has had a lot of trouble navigating what she can and can’t post on Facebook because it’s more sometimes seen as a more sensitive topic.

So sure. Yeah.

Another con, there’s so much.

What about well let’s just let’s I’ll throw it back to to to you all. What what is something else that we’re likely not thinking about? So we have the contract, we have the the behavioral expectations, if you will, from within the community. What’s something else we’re not thinking about?

I would love to hear Ashanti talk a little bit about like protecting the name of your membership, what that can look like.

Right? So as of late, a lot of our clients have been discussing protecting their actual name of their membership. 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 just again, piggybacking off of protecting your membership names, you want to think about your brand 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 somebody is using X. 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.

Well I just call it, you know, it’s our accelerator coaching program.

Yeah, yeah.

Yeah. So when you think 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 there 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 is already using it, or that lots of people just start using it because it’s kind of a common kind of catch phrase.

Yeah, don’t use don’t use accelerator.

Yeah.

Because it’s 187 people are already using that name.

Yeah. I mean the rule in trademark law is if you have something that is distinctive that that just identifies your business, that 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 Whac-A-Mole. It’s really hard. It’s hard to make sure you are 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, Shadi, this is what she was thinking about that has kind of some common words in their name. And we’ve been trying to shut down some Facebook groups. And it is it’s literal Whac-A-Mole. We’re just sending out cease and desist letters a lot. So but on the flip side of that, 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 your the topic of your membership. So.

Gotcha. Okay.

So online business, I don’t know that 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? Well, we’ll sort of put memberships, if you will, to the side just for one second. How important is it to trademark the names 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 honest, 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? 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 a 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 your name. In 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 at the time, like Autumn mentioned and protecting your brand.

Yeah. And following on what Shante said, 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 $50,000 in annual revenue. The trademark is not really even something I think you should worry about, right? If you’ve got $1,000,000 membership and you’re wanting to grow it to ten and you’ve got competitors nipping at your heels and copycats, like that’s a different discussion.

So yeah, because I was I was on Apple podcast, literally, actually, this came up last night. I was on Apple Podcasts 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.

It’s a legal overlord.

No.

Sometimes I wish there was to make our jobs easier.

Seriously.

So. So what about so speaking 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 that protectable? Is that a word? And if so, how do we how do we go about it?

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 I should give my disclaimer, nothing short and I are saying is legal advice. This is just information, but we’re 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 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 US Copyright Office. So that means if it’s something you really care about and we think of this proportionally just like the trademarks because it’s expensive to enforce your copyrights just like it is for trademarks. But if you do think 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 Ashanti. When we spoke earlier, you brought up a specific example In this sense, obviously, we weren’t talking about a specific naming or client, but like, do you all 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? Just because digital planners and also physical planners are 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 shared with me before?

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 made like a couple of 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 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.

They changed the font of like the page number.

This one, the font was not even changed, like the colors were the same.

Oh, really? Arrangement wasn’t changed like it was. It was like.

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 the mixed up.

Trademarks is 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 for the M for McDonald’s. You already know when you drive by the Golden Arches, that’s so they don’t necessarily have to be symbols or logos. Rather, they can be just they could be names that represent your business, that is your brand. Whereas with copyright, like auto 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 and anything tangible that you write down, just think of copyright gotcha brand and then you have like written ideas like, like in, like ideas and tangible form.

So, so with that digital planner, be example of copyright.

Yes.

Okay.

So and maybe like the name could be a trademark, right?

To get like they can overlap. So that’s another thing I think people struggle with. They can overlap the two concepts that overlap. So if the membership is trademarked, does that mean all the content in there is protected underneath that? No. No. You ran me.

Okay. Okay. So in this in this example that you’re just mentioning, the digital planner would need to be copyrighted. Protect everything that’s inside it.

Gotcha. Okay. Okay. What’s the cost of somebody? You know, well, before I ask that question, because 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 is a DIY, you know, route that somebody can go and then there’s obviously somebody that can come higher 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 is it cost, 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 form at copyright dot gov filing fee right now I think is around $75 per work and like an online course would be a work or like all the stuff in your membership could be a work. Okay, 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 a 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 right now it’s slow because everything’s working from home. And so that takes like 6 to 9 months to actually get your certificate. But there’s not a lot of back and forth. It’s like you file 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 Office’s job to deny, you know, kind of claw and fight well. So 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. Makes sense. They want to they want to make sure it’s not too similar to something else that they already gave a monopoly to. And as you can imagine, like the more 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. Now it’s about a year and a half. Seriously. 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 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.

Yeah. And so that’s why when we talk about what’s worth protecting, it’s it’s expensive even if your DIY it the filing fees start at I think 2.75 four 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 of thousand 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.

Okay.

So yeah, so you just want to we always want to make sure that our clients are going to get in ROI on because it’s time and money. Yeah.

Gotcha. Okay. It’s so interesting. Like, 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 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 content’s perspective, where do we fall? Like, what’s the legal aspect of that, or is there one I would assume there is.

Right. It really depends. Not just sound like a lawyer, but it does depend.

But you’ve said that a lot today.

I know we try to avoid what is true because 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 want to didn’t want to make a presentation available after it was live. You could place 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 the presentation and let you utilize 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. Why it.

Should be in a.

Contract. Definitely.

This is what a lot of people are not doing.

I think. I think maybe that might we might name this episode like, like that, you know memberships it should be in a 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’s membership, which I just did two weeks ago. It just as an example, did it live. That recording goes into their member’s 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 record it in the member’s area.

Right. Really money. That’s one of the reasons, right? Like you’re thinking of all the ways in which you as because 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 you can generate other avenues of revenue?

Gotcha.

Like if I want to sell it somewhere else and your members have access to it, it’s not as scarce, Right? So yeah.

Okay. Okay. 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 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 person, 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 whatever is agreed upon is outlined in the contract for the virtual summit.

Mm hmm.

Exactly. And I know a lot of people are probably listening and thinking like, oh, contracts, but it really is just kind of 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 in the other person and expectation be 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.

As you’re talking about that, I’m like, I’m going to get super meta after this episode go by. I think I did actually purchase your podcast agreement. 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.

It’s a good one.

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 in a 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.

No, absolutely. 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 clients. Honestly, you don’t want to come as a surprise. So yes, it should be laid out in your agreement.

So in what specifically the chargebacks. So for anybody who doesn’t know what a chargeback, if I think everybody listening does know what 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 it. They can issue what’s called a chargeback 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. Also, 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? What would we want to include in the terms and conditions with regard to chargebacks?

Yeah. So we have language that just basically says 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 our our language says something like because this refund policy is very clear, we do not tolerate chargebacks. And if you attempt a chargeback, we will come after you in collection. We can send your claim to collections because basically now they’ve got an unpaid, almost like an unpaid invoice or an 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 a chargeback. They say it was not authorized. And you can say, no, no, I have a signed contract. And they showed up on all these dates. They did all these things. They used my services, They agreed. And sometimes 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, correct. So.

Oh, really? Yeah.

Yeah. I’m trying to think over the years. So coming up in January of 2022 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 quote unquote won one of them, even with all of the evidence that we’ve know.

They’re very consumer friendly.

Yeah.

Yeah.

It’s yeah, it’s ridiculous. 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 chargeback still, quote unquote goes on. I don’t know what the is it on your file or something. I have no. Idea.

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, then it looks like fraud or that you’re not being a good business person.

Sure. Okay. Gotcha. Gotcha. Now, going back to making sure that what 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? No, actually researched this after you brought it up.

And I was going to say because. Because because California has some sort of.

So you hear. 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 are 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 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 slimy kind of way of like, oh, 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, this is the answer to the question of because 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’s charge is coming out and we’ve just cleared that up.

Yeah. I mean, for that, from a customer service standpoint, you can decide does that is that helpful, especially for annual renewals? I do think it’s nice. Again, not legally required, right? But yeah, I mean, 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 annually.

Yeah, yeah I agree. Now what about when we spoke before we call that I think the term that you all 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 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 group 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 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, doing a list out literally every every single scenario you can think of. And this unfortunately, is one that, like I just said, is popping up more frequently than usual, I think. And so, yeah, you want to list out the do’s and don’ts, right? That kind of go into the conduct piece that I 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 it’s an interesting it’s an interesting topic because and I don’t want to get too deep into the whole legal jargon stuff, but 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. While in my group, right. And my members can’t steal my members and can’t steal my content, and you can’t then create a group with a similar brand name and or content that I read to you and then utilize it and act as though you created it yourself. I just want to list that out in your agreement.

That brings up another point to 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, this has happened. It’s very flattering, right when it happens, but it’s also, hey, there’s taking your content and it pertains more sort of like an online course where some company, some some person who started a 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 1000 program and sell it for 49 bucks. Is it? 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 Whac-A-Mole. A lot of them are not in the United States, the Web. So there’s there’s things you can do under US laws to. You may have heard of a DMCA takedown. 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 US, you don’t have as many tools short of going to China and filing a lawsuit or the Philippines or wherever they’re located, which is, you know, again, if you have $100 million 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.

Okay.

I try to ignore some of that. I mean, I hate it. It’s it’s obnoxious.

But with regard to all of this that we’re talking about, you mentioned outside of the US. These terms and conditions that we’re creating, are they are they applicable to if we have members who are outside of the US, if they’re in other countries, do our terms and conditions apply to them?

Yes, they do apply. And I don’t want to go down the rabbit hole with this and all of these things, but all of those things would need to be considered. Right? But you do want, again, to have terms, drafted terms in your agreement that make clear what law you would like to be applicable. Right. 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 remain right without having an agreement.

Even though somebody lives, say, in a European country.

Yes, it can still get it can still get a little rocky. But yes, I’m going to say yes, I’m going to keep it there. Yes. Interesting. Okay.

So could that be challenged, Rick? The answer is also yes.

But you’re going to.

Be on stronger footing.

Right?

So I’m curious now, because that happened to me actually this year where somebody in a different country just like pieced out after a few months with just went silent, no good reason and signed the contract. Still a considerable amount of money outstanding.

Right.

But is in a different country. And I was just like like what are my options?

It gets tricky because and this is why I would say if you’re doing it by yourself, like you have to do your due diligence and figuring out the rules and regulations wherever that member is located. Even though US law is mentioned as a jurisdiction or country in your agreement, you still have to refer to 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 concepts that have went through similar situations and we’ve had to do spot research. And while having an agreement that list you want us to apply more specifically a specific state, it can still get a little rocky. You still have to do your due diligence in researching how things are handled in that other 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 Right, right. The cost of going like even if you could legally, let’s say someone was in Germany, even if you could legally try and enforce your contract there, which it may not be enforceable, there’s some weird rules around like refunds and notice and all of that. It’s expensive to you’d have to hire a German lawyer and file a lawsuit. Like for most most of these amounts that are at issue are not going to be.

Worth.

Spending. It’s not like you had a $10 Million manufacturing contract where you’re like, Oh, I’m definitely going to pursue this. Right?

It’s just it doesn’t make sense economically.

And I think that that’s a good lens. You know, I have one more question before we start to wrap up here. I think that’s a great lens to view a lot of if somebody breaks the contract. Going to. Asking yourself this question here, Is it worth it to X? Is it worth it to do whatever? And just use that as a filter?

Yeah.

We have 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. So it was just kind of like it stings to kind of flush that money down the drain. Yeah, but it doesn’t make sense to spend more.

And even then, there’s probably no guarantee that that five grand will come back, correct? Come back? Yeah.

Now, as we finish up here, I have a note here talking about payment plans in the B2C space. The business, the 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 that you do need to be thinking about is whether this the payment plan is going to be considered as a debt. And 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 a bank or some type of collection 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 payment plan members, you kind of want to keep them on the same playing field as as members that pay a one time payment for the membership. I can afford them.

Yeah. What’s an example of this?

So like a weight loss membership would be business to consumer. So let’s say you charge 1000. If it’s painful, maybe it’s a six month program. I’m bad at math and I’m already regretting these number choices. But so let’s say it’s 1000 should be painful. And it’s if you add.

1200 over six.

Months. Sure. Yeah, exactly. So you’re charging you’re doing an upcharge in the consumer space that can be seen as, like Chanté said, basically like charging interest. 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. 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, we have a client who doesn’t have this issue but teaches piano lessons. So kind of similar thing. You’re teaching marketing that’s B to B 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 business or an entrepreneur. But just I chanté and I’ve been just trying to kind of highlight this. It’s not there’s not an easy answer. It is something 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. Someone filed a complaint with the state. And you do not want to be audited and you do not want to be on 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.

Yet no one.

No one is talking about.

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?

So and again, you know, you have to be a certain size business probably to land on these 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. So are we listening right now? If you’re in the b2c space to make sure.

You look, at least do a Google.

Yeah, at least Google. 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.

Yet we have a client recently who’s 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. Like so you take a little risk that people aren’t going to pay. I mean, that’s the downside and that’s 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 upcharge.

Yeah, I’m noticing that more and more where that’s happening, there’s no upcharge on on a payment plan. And as you just mentioned, there’s definitely pros and cons to it. And if you’re in the disease phase there’s legal repercussions on Yeah, 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? And can that be included in the sort of the umbrella contract we’ve been talking about here today?

Absolutely. You should definitely have an earnings disclaimer in your agreement. 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 the dos and don’ts of how you market and promote scaling. Right. Like mentioning that you can promise your members to make 5ka month or ten K a month can be an issue and can 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 of 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 go because then it looks like it’s not consistent, right? It’s like, do you mean this or do you mean that’s consistent across the board? And yeah, so you want to be clear and make sure that you’re using language that doesn’t come off misrepresentative of what you can and cannot do for your client.

This all seems like a lot of work.

We’re pulling up our big girl pants and our big boy pants here.

We’re part.

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 no, 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. Chanty to use your word, to use the word I talk about a lot too, is scaling your business As we’re getting 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 now you’ll have templates and stuff that pretty much cover all. 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 a I’m a proud affiliate for you all, so.

Thank you for disclosing that, Rick. And and that’s one of your legal obligations as an affiliate is to be up front about it. I think that’s so weird when people.

Don’t.

Do that. I’m always like, I don’t I’m just not I don’t hide. I’ve never hid from it. It’s just like, oh, I’m here’s my link, you know, here’s why pretty link that we’ve created is so interesting. So, yes, there’s another, there’s another. 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, post, email, you know, 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. Well, so here we’re recording this at the end of October 20, 21. So November 2021, we are running what we’re calling the Prep to Scale Challenge, which is a 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 I think it’s $27 if you if you want to purchase it. But for our affiliates, we’re giving away for free. So check that out. We’re going to have four Q&A sessions with a lawyer. I’ll do some some of the other lawyers are going to do some. So if you’ve got questions like Rick had a lot of questions today, come get me.

And we only talked about memberships. Like I said, we could talk for 3 hours on this stuff.

Yeah, 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. What? That number one that you all, all of my all of my listeners here are getting this for free. I didn’t know that until right now. Thank you both for doing that. Yeah. So I’ll just go to Rick Muller forward slash AWB, AWB. I’ll link it up in the show notes for the episode here today as well. But Autumn Chanté, thank you so much for coming on here and making you really made the 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 and you I’ll, I’ll link or in addition to the links I will outline what we talked about here today on the show notes 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, etc., 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.

You we love to nerd out about this stuff, right? So thanks for having us.

Absolutely. All right. So I know you have a friend who needs to hear what you just listened to here in this episode so that they can be legally protecting their business, their membership, their course. And so I’d really appreciate if you shared this episode with them. If you listen on Apple Podcasts, there’s those three little dots next to the podcast or the episode name. Just click those three dots. There’s a dropdown there and there’s a share button right there. And then also if you’re listening on something like Spotify, it has the share button right in the episode, right on the screen of your phone where you’re listening. So thanks in advance for sharing that. And if you haven’t already, it is still really helpful for this podcast here. When you leave a quick rating and review for the show over on Apple Podcasts. So it takes like 10 seconds, quick rating, quick review can be like one sentence. I read all the reviews, I’m super appreciative of it and thank you also in advance for doing that and for coming to hang out and listen to today’s best of episode. And so, until next time, my friend, be well. Appreciate you and I’ll talk to you soon.