Franchise wants me as exclusive artist. Anyone done this before?

[Mattypo]

Hey guys I recently had a meeting with a store/franchise owner about a full time position. I wanted to get others opinions that may have done this before. It's still a little vague but the guy offered to pay me $5000 a month to do what I am doing currently and he gets my glass exclusive to his shop. 40 hours per week to crank out what I have been doing. I dunno it sounds weird, does anyone have any experience with this sort of situation? Not sure if $5000 will cut it. If anyone has been in this situation before I would appreciate any input, thanks guys.

[Wilbur]

It's only a matter of time before one of you becomes disgruntled. He'll say your not working hard enough, or you'll think he's not paying you enough, or both.

Piece work is the only way to go- plus after awhile you'll grow to resent the work of your not being compensated per piece. Your motivation will go down, you'll get a 'fuck it attitude.

It's a recipe for disaster.

[brads]

While I suspect Wilbur is right, it's still worth considering. The one thing I would absolutely insist on is getting EVERYTHING in writing first, down to the smallest detail. Doing this isn't simply a trust issue. It helps you both think things through completely, and is the best way to ensure that each of you is on the same page as far as any agreement goes. Putting it on paper helps make sure each of you is interpreting things the same way.

It isn't foolproof, but it's way better than just a loose verbal understanding where you may be thinking one thing while he is thinking another. And most importantly, if somewhere down the road a disagreement does come up, you both have the original agreement on paper, which helps with any "memory problems".

[snoopdog6502]

50% up front %50 when the month is done, go month to month. If it dont fly at the end of the month you load up your shit and take your show down the road.

$5,000 a month is good money , you would have to have expensive tastes or bad habits to piss that away.

[brads]

To expound on this a bit more, the devil is in the details. The first thing to ask yourself would be which do you like better - making your glass or marketing your glass. Other questions to think about are:

Will you be working in your own shop or his?
Who pays for materials - glass, gas, oxy?
How much are you expected to produce per month?
Who sets the price/value on that production?
What happens if you are over/under the goal?
Who keeps track of hours worked, and do the hours really matter if you have a production goal?
Who chooses what you make?
Will you have time and/or be encouraged to pursue new designs?
Is there a guaranteed contract period, such as a year? Or is it month to month as long as both are happy with things.
What if the stuff doesn't sell as expected.
What is the airspeed velocity of an unladen swallow?

There are obviously plenty more potential questions. These are just a few that you may want to think about.

[Mattypo]

You guys all have great points. I have thought too for something in writing. $5000 a month would be okay it would get old but getting agreement upfront would be ideal. He seems cool about letting me do my thing but yah he might be expecting something different. I'm going to put myself a list of questions together for the next meeting but anyone here that has dabbled in this industry like this?


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[Mattypo]

Brads thanks for such a great in depth response. I'm in bed ready to crash but in ending my night with your thoughts on it. Will start my workday tomorrow and figure this out. I know my overhead but what about being exclusive? That is worth a decent amount. I will recollect in the A.M.


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[Lux]

@brads

What do you mean? An African or European swallow?

[Mooney]

One of the guys I worked with signed a contract kind of like this. His experience was not the best because they pretty much owned him and dictated what he did. This situation may be quit different. Really depends on the people involved and the ability to have totally open communication and a way out if things don't go well. Get as many of the concerns and worst-case scenarios out in discussions before hand. 40 hours a week to pay the bills and time to play sounds cool to me if everything else is in order.

[LRG]

Think I would move to the guy for 5 k a month.Seems too good to be true.I have never pulled 5k in a month.60k a year....I wish ....

[brads]

@brads

What do you mean? An African or European swallow?


:D

[oG Glocc Coma]

Yea I agree, set a Production Standard instead of straight up hours. Be reasonable to yourself! That way if you meet your production you can have that extra time within that "40 Hours" to do your own thing and experiment with designs and what not since you will still have that steady paycheck coming in.

[Nomad]

I would do it for the $5000/month. That is a lot of money. Do you have to use your own studio and pay for your own utilities and glass?
I would still do it though. I am making way less then that.

[Nomad]

give yourself 20% for overhead. That is about $1000 month. You should be fine. That is $350 for gas, $100 electric, $150 for glass and $400 for rent a month for your studio. You could take home $1000/week. That is sweet!

[Nomad]

like $25/hour for 40 hours or $30/hour including brakes and lunch. Sweeet!!!!

[Carl]

http://farm3.static.flickr.com/2414/2205279450_452940da44.jpg?v=0

[Mattypo]

yah I would be in my own studio, using my own gas and glass. I cut $1000 right off the bat for gas and glass and i feel being exclusive is worth something. I could easily make $200 worth of wholesale $400 in retail per day. Sounds like a nice steady ride, maybe Ill try it for 6 months and see how it goes. He sounds chill and wants someone creative, I asked to sit down and hash out the details. thanks guys, I'll be looking into it a little more. Saves me a day selling as well because I have my son 2 days a week now it's tough to plan sales.

[PyroChixRock]

20% overhead seems low. Try more like 47-50% unless you are getting glass/gas at really cheap prices and in bulk.

Please take Brads advice and get all those things and anything else that comes up in writing. I have been down this path many times over the years and Wilbur is right, it's only a matter of time before one side is pissy unless everything is super clear and in writing.

Also...piecework! If you can make an agreement on pricing by piece, you will both end up a lot happier for a lot longer.

Good luck Matty, I hope it works out.

[Firekist]

mortgage 900
shop rent 500
oxygen 400
propane 125
health insurance 700
car payment 200
gas 100
food for 4 400
beer 100
home elec. 175
shop elec 125
home/shop heat ave. 50
glass expenses 400
random crap 600
total 4775.

but i digress. family of 4. just throwing out some numbers =)

[Nomad]

$150/ week for food.... $100 week for ganja.... $300 weekend for entertainment.....

[Nomad]

$300-$500 /night entertainment in NYC......

[Nomad]

I am really cheap and I do buy glass in bulk. I also wait until it is on sale.

[Nomad]

child support I pay also.... but that is part of the $1000 week take home.

[Bugzy1972]

You also need to take into consideration is Taxes! Are you going to be an employee of theirs or are you going to be an dependent contractor responsible for paying the man his "cut"

[Aymie]

I would NEVER give anyone exclusive rights to my glass, regardless of the money.

[dustyg]

If you play it right, it could be a really good deal. Do your own marketing, in spite of the fact that he's selling it all. Keep up an Instagram and a facebook, so that if/when things go sour, you'll have an instant source of sales. Save money, too, so that if things go sour, you won't get desperate.

[Super Phunk]

I would say based on the fact alone that you said you can produce 200 dollars a day it seems like a good deal for you. That would only be a grand a week with the same hrs plus you have to spend all the time and money selling your glass. Once you get to the point where you can produce 400 or 600 bucks a day this situation will no longer be that great.

[Nomad]

Get paid in cash. No more then $1000 a week and you should be fine.


You also need to take into consideration is Taxes! Are you going to be an employee of theirs or are you going to be an dependent contractor responsible for paying the man his "cut"

[Nomad]

buddy I make about $24K a year over here. I am poor by all means. I would go for the $60K.
My girlfriend is rich. She is teacher who makes $105K but after taxes she told me she is making $65K. To put it into prespective.
We live upstate. In the city it is insane.

[Nomad]

In NYC people make so much money. My friend is a millionare, his mother died and left him that much. He does not work but he lives for really cheap and has a roommate. He is a stand up comedian at clubs.
My girlfriends sister makes like $350K a year and lives in Brooklyn. She has a house husband.

[metalbone]

agree with bugzy, you have to consider taxes, especially self employment tax (15% on schedule c on top of your federal and state taxes). It may be better to incorporate, keep as many expenses under the corp, pay yourself a nominal wage to minimize SE taxes. Pay yourself rent from the Corp for your studio (rent is ordinary income to you, not earned, so no SE taxes on this income). In the grand scheme of things, 60k isn't that much, but you can maximize your take home if you structure it properly. Excel is your friend as far as planning your options but you do have to know what you can and can't do under a corp and schedule c, and the differences between how earned income, ordinary income, dividends, and corps are taxed.

[Mattypo]

Thanks for the input everyone! I set up a meeting to go over a plan. I figured at the end of things I might make 30k a year. Im going to write down everything you guys recommended and figure out a plan. What I worry about is him not being happy with how much I am producing. It might be better to go with an hourly wage or per piece. I don't like the exclusive thing myself and that should be worth the difference if I am not producing as much. I like what I do now but I just make enough to get by and pay the bills. Also I think it might hinder my progress if I am spending 40hrs making product for him I might not have the time to experiment and try new things. Definitely a lot to consider and I appreciate what everyone has recommended so far it is very helpful! Thanks everyone!

[PyroChixRock]

You should be paid at least 33k a year JUST to be exclusive. I mean like on top of him buying all the stuff you make that's sellable, he should pay you to not make stuff for others. Just buying everything you make isn't the same.

Personally I would never be exclusive. Things can go wrong in too many directions and I have kids to feed. I wouldn't risk it. Unless it somehow came with so many zeros it was worth the risk even if it didn't work out for very long at all.

[Mattypo]

You must spread some Reputation around before giving it to PyroChixRock again. Thanks Misha you have a point there. I have a little one to feed as well and he is only getting bigger. This is a tough one...

[Mattypo]

If I work 40 hours a week and he gets all those products I make during that time and I decide I want to put in 10+ hours or what not on the side I should be able to do what I want with those products right? That would mean he gets what he wants and I have some products I can sell to who I please

[PyroChixRock]

Not if you sign an exclusivity agreement. You can't even go home to your home shop and make your mom a pendant, because he'd own it.

[Aymie]

You should be paid at least 33k a year JUST to be exclusive. I mean like on top of him buying all the stuff you make that's sellable, he should pay you to not make stuff for others. Just buying everything you make isn't the same.

Personally I would never be exclusive. Things can go wrong in too many directions and I have kids to feed. I wouldn't risk it. Unless it somehow came with so many zeros it was worth the risk even if it didn't work out for very long at all.


This is spot on.

If you buy everything I make, you can be the exclusive shop that has my glass. The ONLY way to do this is to buy everything, immediately, so no one else can.

[Mattypo]

Misha and Aymie you make a great point. I can't go exclusive. If I sign an exclusivity contract and he goes bankrupt there is no backing out even if it says in my contract. I guess it has to do with bankruptcy law or something. So I took the little one for a long walk today and had time to think. It sounds like this dude has a lot of money, just in the property and stores he has I am not sure but I would like to cut some sort of deal with the guy. What I would like is more supplies. I would like to have a good amount of color rod and tube on hand as well as clear. Currently I don't use much color and fume a lot. It might be possible to get $2500 up front for the month and $2500 at the end of the month. This would allow me to stock up on glass and pay my bills and rent at the end of the month. It's not much money but it would be non exclusive, he gets everything I make. I was thinking of trying this for a 3 month period and see where that goes. I could ask for a little more as I would love to take some classes to help me improve, which in turn would benefit him as well. Also I have the option to just get paid hourly and he keeps everything. If I go into the studio for 8 hours minus 1 hour for lunch and safety breaks that's $210 per day and $1050 per week and $4200 per month. Cut that in half and that's potentially $2100 per month take home after everything. Not very precise but I have a modest lifestyle and could make due with that. Of course I could put in 10 or 12 hour days. I'm in this for the long run and I am getting closer to figuring out a good deal I think. Appreciate all the help again everyone!

[brads]

As I said in my other post, the devil is in the details. Exactly what is covered by an exclusivity agreement would depend on exactly how the agreement is structured. It could range from something pretty loose (he gets right of first refusal on all your work, but you have the unlimited right to sell anything he doesn't buy) to him basically owning you forever. In reality, it's likely to be somewhere between those. But without knowing the structure first, no one can positively say whether it would be a good deal or bad.

Here's my take on it. If someone wants to buy everything I can reasonably make and offers me a good price for it, I wouldn't particularly care if it was an exclusive deal. If he's buying everything anyway, great. I don't have to waste my time on selling the stuff and can spend more time actually making it. I consider that a win-win situation. If the agreement also allows for flexibility for me to get paid while developing new and better work, even better. Piecework won't do that. Although it should be taken into account when pricing, you still pay for your own R&D time when selling by the piece.

On the other hand if I can produce a lot more than he is buying, yet have been prohibited by a contract from selling it to anyone else, that's obviously going to be a problem. Along the same lines, if the relationship doesn't work out, yet I am still prohibited by a contract from selling my work elsewhere, that is an absolute disaster. Do NOT agree to something that could put you in those chains for ANY reason, no matter how sweet the offer may seem.

I also agree with Dusty about keeping a internet marketing presence - even if you are just directing people to your business associate's shop to buy. (Which he is likely to appreciate.) As Dusty said, that way you'll still be ahead of the game if the deal goes sour and you need to start selling/marketing your work again yourself.

So don't dismiss an exclusivity agreement out of hand. It could be great - or it could be shit. It all depends on exactly what the agreement says and how everything works out. But even with a perfect agreement (and there probably isn't such a thing), the biggest drawback to having only one customer is the old adage about having all your eggs in one basket. If things go wrong, it can hurt.

[quix]

I was in a situation similar to this and eventually I found myself feeling as though I never got much chance to experiment and progress with glass as much as I wanted to and was constantly grinding away to make more every day. There where other folks in there who had been making the same pieces for 10+ years. I was paid by the piece and would suggest doing things that way. Hourly pay for this type of work will cause problems on one end or the other, you getting harassed to work harder and make more faster... or you feeling like you are pumping out too much for what you are being paid. Also being paid for your progress is extremely important. You will only get better and should be paid more for your dedication over time, in a situation like this that might not happen.

[Mattypo]

Quix that was a great response to my question thank you. A lot of great feedback actually. I will be meeting again tomorrow with the owner and will be going over a lot if not all of these questions. Getting paid per piece sounds like the best plan. As far as right of first refusal goes, I am not really sure what price to put on that. Anyone know? If I can show up with $1250 in glass by the end of the week and go home with $1000 in the bank and $250 in glass I would be okay with that. Would allow me to continue to grow as a glass artist as well. I really appreciate all the advice everyone. Hope everyone had a great day with the Mothers in their life.


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[Simian]

Are you capped at $5k? How will he track the sales from your work? Will you have access to this information? If you exceed his sales projections do you bonus? How many days a week? Hours? Do you have to interact with the public? Are you an attraction?

Just a few thoughts off the top of my head.

[JnglJnke]

A successful business runs at about 10-12% profit margin. Anything above that is highly profitable. Seriously examine your overhead. You won't actually be making $5000 a month. Not even close.

[christopher]

JnglJnke,
I call bullshit. As a CPA/Accountant/business consultant, I'll contend that there's no blanket margin. Grocery stores run at nothing 1% margin, if you grow ganja for clubs in Cali I hear the final margin is much higher.


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[Dan Kooper]

Get it all in writing

[doosight]

Having a self employed glassblower on salary sounds like a recipe for disaster. How would be even know that you are *exclusively* working for him and not skimming product to be sold to other stores by a friend or family member? There would have to be a huge amount of transparency and communication on both sides for this to have a hope at all of working. You both would have to have an open door/ open book policy and a lot of trust between the two of you. It sounds like a lot of work. All of this for what reason? Selling your work by the piece eliminates all of these complications.

If you do end up going salary i think you should leave the option open for you to put in "overtime" that can be sold elsewhere if he isn't interested in buying it. You may also want to invite him to your shop to watch you work and see how long it actually takes you to make these pieces in the first place . You might also want to keep notes about what you make every day and why it took as long as it did so he can trust that you aren't just fucking the dog or at the beach when you should be putting in the hours you agreed to.

Just my 2 cents. I have never entered into an agreement like this, but in addition to some of the things others have suggested, i would go about it this way.