Help. My customer wants rights to my training program ?

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Q. Help. My customer wants rights to my training program ? I am in the logistics consulting business. My customer, a large freight forwarder, wants me to create a logistics sales training program for them. No problem, I would love to do it. However, they want exclusive rights to the program, while I want to be able to train other companies. While I would not use and confidential information -- or any information about my clients company in the program that I taught to other companies, I would obviously want to retain the format, and just about everything else. If this were a program already completed, then I could just license it to them, right?

A. -If your client want you to develop a training program from scratch for their exclusive use, they should pay you a flat fee to do so. Alternatively, they could pay you an up-front fee and royalties based on the number of times they use it. You could also work out a limited period of exclusivity. It's really a matter of uncovering their "real" needs. I would never give up the rights to an already existing program. You could offer to modify it, for a fee, to their specific needs. Again, the negotiation should proceed based on your understanding of their real needs and how that impacts your future business. -how about a "no compete" clause instead of exclusive rights? They specifiy who they are competitors against, and you promise to never deliver this specific program to those companies. The negotiation comes in when identifying who you cannot deliver this program to. The "specific program" clause allows you to re-develop the training program for their competitors anyway, unless they up the ante to make it worth your while to not prospect those companies. -I'm confused as to why a freight forwarder wants exclusive rights to a training program. Perhaps what they really want is a "train the trainer" program from you with the rights to use it throughout their company and think they need exclusive rights in order to do that? I suggest you sell them unlimited rights to use the product within their company while making it clear they can neither sell nor give it away to other organizations, since it's how you make your living. - One, you have a valuable program. Two, they see it in terms of a competitive advantage. Three, they want to tie up the market in terms of competitor's access. It seems to me that you could proceed along these assumptions. One, your program has a higher value now than it did before. Two, you are being asked to voluntarily cut yourself off from future sales. I would suggest that you think in terms of opportunity costs. If they (in essence) want your program off the open market, they need to acknowledge the value of that not only to their organization but the value of that to your organization. If you cannot sell to other potential clients, then you have to secure your revenue from the ones you can sell to. I think the exclusivity nature of their request pushes the price higher (how much higher is a function of a realistic assessment of future sales to other prospects). Against that, you would want to consider any "discounting" you would normally consider for "volume" purchasing. You might see if they will agree to a "non-compete" clause for a defined period, say one year. This would give them the competitive advantage they seek while only restraining you for a temporary period of time. From another point of view, you might talk about a serious customization plan that would make the program so specific and valuable to their organization that it wouldn't be very germane to other clients, including competitors. It woulsd be a legitimate, value-based way to increase the value and price of the program without compromising your ability to market the "generic" version elsewhere.

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