Scenario Overview
Company president Sally joins the meeting to discuss financial terms for Jenny's endorsement. They explore payment options including a flat rate versus percentage of sales, and consider stock options. Charles expresses concerns about stock making Jenny appear too affiliated with the company. They settle on a percentage fee for annual endorsement of four specific products (serum, contours, eye shadow, foundation), with the contract renewable annually by mutual agreement. Charles requests complimentary products as part of the deal, which Sally agrees to include in the contract.
Participants: Sally (Company President), Charles (Jenny's Representative)
Dialogue
Sally:
Hello everyone, sorry for joining the meeting a little late. I understand we're discussing the financial aspects of Jenny's endorsement. Let's delve into it.
Charles:
Welcome, Sally. We were just discussing how to structure the payment for Jenny's endorsement. One option is offering her a flat rate for the endorsement, while the other is providing her with a percentage of sales generated by the endorsed products. Additionally, we touched upon the possibility of stock options.
Sally:
Thank you for summarizing, Charles. It's an important decision to make. While stock options can be enticing, I understand your concerns about Jenny being perceived as overly affiliated with our company. We value the integrity of our endorsements and don't want to compromise her credibility.
Charles:
Exactly, Sally. We want to maintain a balance between promoting our brand and ensuring Jenny's independent status. Therefore, I suggest we focus on a percentage fee for an annual endorsement of specific products. This way, Jenny will be compensated fairly based on the success of the endorsed products without directly tying her to the company's financial performance.
Sally:
That sounds reasonable, Charles. We can outline the percentage fee structure in the contract and specify the four particular products we want Jenny to endorse—the serum, contours, eye shadow, and foundation. We can evaluate the performance of these products annually to determine the fee.
Charles:
Agreed, Sally. Having an annual endorsement agreement allows for flexibility and assessment of the ongoing partnership. It ensures that all parties can reevaluate the terms based on their satisfaction and any changing circumstances. We can include a clause stating that the contract is renewable annually upon mutual agreement.
Sally:
That's a good addition, Charles. It provides a level of flexibility and ensures that both parties can assess the collaboration and make informed decisions moving forward.
Charles:
Lastly, Sally, Jenny has expressed interest in receiving free products as part of the endorsement deal. It would be beneficial to provide her with the endorsed products regularly, not only for her personal use but also to showcase her commitment to the brand.
Sally:
I understand the request, Charles. Including complimentary products as part of the endorsement deal can be a mutually beneficial arrangement. It showcases our confidence in the products and allows Jenny to experience and advocate for them genuinely. We can outline the specific quantities and regularity of product distribution in the contract.