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Dwayne B.
Dwayne B., Attorney
Category: Legal
Satisfied Customers: 32369
Experience:  Began practicing law in 1992
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We've been doing some great work on determining the future

Customer Question

We’ve been doing some great work on determining the future of QuickFlick and are excited to bring you on as an investor. We will be meeting with our programmer soon, so I would like to present our offer.
You would be investing $2,500 into QuickFlick, all of which would go towards improving the app and marketing over social media. We are going to begin generating revenue from advertising placement throughout the app, thus we would give you 10% of all sales revenue we make until you get your $2,500 back. Then, you would be getting 5% of all sales moving forward. This is called a royalty deal and commonly made on shows like Shark Tank.
This would be a legally binding agreement, signed via contract, from our LLC. This means that you are guaranteed to get that 10% up to $2,500 and then 5% royalties for the lifetime of the app. Of course we would have to get together to sign the documents and tell you more about the process before receiving the check.
Let me know what your thoughts are. We couldn’t be more excited to begin this journey with you!
Submitted: 6 months ago.
Category: Legal
Expert:  Dwayne B. replied 6 months ago.

Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

Is there a specific question with which I could assist?

Customer: replied 6 months ago.
Does this proposal seem inline with a general contract?
Expert:  Dwayne B. replied 6 months ago.

It's fairly brief but I don't see anything terribly out of line, assuming that it properly sets out the numbers and % that you agreed to. The only thing that is unusual is that they say "Of course we would have to get together to sign the documents and tell you more about the process before receiving the check." You would want to get all of what they are telling you in writing. If they tell you something and they don't put it in writing then it is likely not enforceable if they don't do it since there is a written contract.

If your question has been answered then I'd offer my best wishes to you and ask that you please not forget to leave a Positive Rating so I receive credit for my work.

Of course, please feel free to ask any follow up questions in this thread. I want to be sure that all of your questions are answered. In addition, once you issue your Positive Rating the question will lock open and you can come back to it anytime in the future if you think of something else.

Customer: replied 6 months ago.
Did you believe I should ask for more than 5% over the course of the program?
Could that be contingent on if I am one of the biggest investor?
Expert:  Dwayne B. replied 6 months ago.

You can contract for anything and certainly you should get as large a percentage as they will pay you and you can base it on you being the largest investor or whatever else you like.

You probably also want to talk to some people to make sure it isn't a scam. The problem is with just $2500 being invested it would cost you more than that to have them checked out by someone good.

I ran a couple of quick searches and didn't find anyone complaining that it is a scam, but that really isn't a thorough check by any means.