Business Management

What’s in a Name? Protecting Your Salon Name Legally

It’s hard to believe that anyone could deprive you of the right to use your own name or hard-earned reputation for product endorsements. But it can happen unless you know how to protect yourself.

Celebrity product endorsements are common in the entertainment, clothing, music, and many other prominent industries. Many nail technicians who have achieved “celebrity” status in the celebrity industry are also reaping the rewards of product endorsement by lending their names to acrylic lines, nail art systems, and even drill bits. Unfortunately the deals can backfire, leaving you unpaid for many hours of hard work. Sometimes it even means losing the right to use your own name on other products.

Kim Morgan, whose name is recognized as a top nail competitor, was convinced by a coworker to leave her job at a well-known nail products manufacturer to develop and endorse her own acrylic line. The two made plans to start a new company, and a good deal of Morgan’s time would be spent in education. “I was excited part of my job would be education. I was excited at the opportunity to share all that I had learned in the nail business and through competing with other nail technicians,” Morgan says.

Morgan and her new partner decided on a weekly salary of $250 to conduct classes (sometimes up to four hours away), travel to the company’s main office once a week (1 ½ hours each way) to test products, attend local tradeshows, and provide telephone technical support. “I was also supposed to receive monthly royalty checks in addition to my weekly salary, which is another reason why I decided to get involved with the new business in the first place,” she says. Her royalties were to compromise 5% of the gross profits made from the sale of the products which she understood to be a standard industry fee.

At this time, Morgan went to a lawyer and had a contract drawn up disclosing the verbal agreement made between the partners. The partner didn't sign it, con­vincing her that paperwork was "not important right now" — all their ener­gies should be focused on getting the product on the market while her com­petition streak was hot and her name an industry buzzword. Morgan, too, was caught up in the excitement and so didn't press the issue.

No Royal Treatment

Six months later when Morgan had still not received one royalty check, she began to get concerned. "1 was paying for things like long-distance phone calls to nail technicians using my prod­uct and was not seeing a dime of roy­alties to help me cover the expenses," she says. "My partner and I argued, and that's when the bomb dropped. He told me that I did not have any paperwork to prove that he and I had an estab­lished agreement."

She would find out later that her part­ner had had his own contract drafted and when Morgan read it, she found she was considered merely an employee. On the advice of her lawyer, she didn't sign the contract, and discussions continued between the two. Finally, Morgan decid­ed she wanted nothing more to do with the company or the product. "Had he paid me some of the back royalties he owed me, I would have wanted to work something out with him and keep the company going. Instead, I asked him to have my name removed from the label," she says. "He responded by telling me that my name would not be removed until the labels we had already printed ran out."

With her name stuck on the product and no way to settle up with her ex-partner, Morgan filed a lawsuit. The ex-partner filed bankruptcy, a move Mor­gan felt was designed to put off any chance of her receiving any monetary compensation for her name, her repu­tation, and her hard work.

Get It in Writing

Ken Cassidy, owner of Kassidy's Salon Management Consultants (Long Beach, Calif.), agrees that a name is a valuable asset. "Lending your name, likeness, or reputation to a product is a business arrangement," he says. "You need something in writing to protect yourself any time you enter into such an arrangement."

Being asked to endorse a product is so flattering that it is easy to forget to think like a businessperson and develop an agreement that adequately compensates you for your expertise, says Cassidy.

Or sometimes, a nail technician can have too much faith in her partner. "I know people will think me foolish for not getting something in writing from the get-go, but I trusted him," Morgan says. In hindsight, she wishes she had done a background check on the part­ner and insisted on him signing a mu­tually agreed upon contract before she put time, money, and hard work into building the new business.

In general, if you arc considering en­tering into a business arrangement with a manufacturer or individual and plan to lend your name, likeness, or exper­tise to a product or service, be prepared to protect yourself. Cassidy explains that a legal agreement can be as short as a one-page letter granting permission to use your name to endorse a product, or it can be a multi-page agreement that entitles the company to use your name, photo, and services to promote their products and their company. "Any agreement should give as much detail as possible without taking away the marketing ability of the company for the product and must be mutually agreed upon (witnessed or notarized) by both the nail technician and the company for it to be valid," he says. The contract: does not have to be technical, but it is recommended that a lawyer re­view it. Cassidy also notes that there are computer programs and books that provide simple agreements to use, but again seek legal advice.

If a binding contract had been in place, Morgan would have had legal power to have her name removed from the products and possibly received monetary damages, especially if a bail­out clause existed. This type of clause makes sure that you, the endorser, are adequately compensated even if you de­cide that you no longer want to be asso­ciated with the company or product.

Along the same lines, Cassidy recommends including a time limit in the contract. "Be specific about how long you will lend your name or photo to the company for promotional use," he says, adding that the nail technician should also establish her right to approve any item that has her name or likeness on it before it is re­leased to the public.

The Many Faces of Endorsement

There are several ways you can endorse a product or company, so before signing an agreement, make sure you are familiar with how your name, photo, or expertise will be used. Here are some common cases:

1. Agreeing to have your name and/or photo appear in a company's print ad as a testimonial or endorsement for marketing purposes.

2. Licensing your name for use with product for brand recognition, endorsement or testimonial.

3. Developing your own product line with a company, holding educational seminars, providing technical support, and lending your name to market it.

4.      Developing your own product with your name on it and then working with a com­pany to bring it to market.

Know Your Product

Nail technicians who decide to enter into an agreement with a com­pany should be sure that they know the product before actually starting a marketing or sales campaign. Lysa Comfort, a licensed nail technician with 12 years of experience, developed a design for a drill bit that utilized a specific angle in order to prevent the acrylic from cracking or chipping dur­ing a French backfill. She researched the design thoroughly before taking her idea to Bruce Atwood of Atwood Industries (Cardiff-by-the-Sea, Calif.), who had been supplying Comfort with her bits for eight years. "Bruce and I worked to­gether to develop a bit based on my specifications and I tested it for close to a year," Comfort says. "Other nail technicians asked me about it and when I told Bruce, he thought we should take it to a tradeshow. When the drill bits sold, we decided to make a go of it." Soon after, Comfort Con­cepts was born, based on a mutually beneficial partnership between Com­fort and Atwood. The relationship also has both companies with equal interests at stake, as well. Atwood is the only manufacturer of the product and gets exclusive business from Comfort, and Comfort is the only dis­tributor of the bits.

Comfort was heavily involved in the design and manufacture of her product, just as Morgan spent one day a week at her company headquarters testing her products. Both were smart to invest time in knowing their product. "Don't endorse a product or company unless you understand exactly what the prod­uct does and how it works," Cassidy rec­ommends, adding that it doesn't hurt to research whether the company has filed for a patent because it gives specific technical information about the prod­uct's ingredients and how it works. The nail technician should also plan to spend time doing independent research and possibly include that time in her contract so that she is compensated for it. "Remember that if something goes wrong, the customer will usually re­member your name as the endorser more readily than the company's name," Cassidy warns. "Your reputation is on the line, so be sure you know what you are endorsing."

Lending Your Time and Talent

Just like Morgan and Comfort, Tom Holcomb, now an educator for EZ Flow Nail Products (Stanton, Calif.), lent his name to a product line devel­oped specifically for him. The venture ended with Holcomb leaving the company, and he does not recom­mend that nail technicians lend their name to products. If they do, he stresses that they should at least be sure they know how much work will be required of them. "Distributors called the company who made my product line to request an educator to teach classes locally and I would say, "Sure, we'll send someone out.' But because my name was on the product, they demanded that I personally come and run the session. I was expected to be in 10 places at once," he says.

Similarly, Morgan drove to her com­pany headquarters 26 times in six months and made many long distance calls at her own expense, but did not re­ceive any compensation for her time or skills. To prevent this from happening to you, Cassidy suggests that nail tech­nicians be sure about what will be ex­pected of them during the contracted period and if they will be compensated for events like personal appearances, competitions, and tradeshows. "Are you reimbursed for these activities? If so, how long must you be involved and how much will you be paid?" he says.

With all the details in writing, any nail technician should know what to expect from her association with a company, and it should be a pleasant and rewarding experience for someone who has I worked hard to build a name in the industry. Not protecting your good name, ideas, or other property with a contract can be like working for free. "No one would ever use Michael Jordan's name on a product and not pay him," says Morgan. "If my name is important enough to put; on a label, it is important enough to pay me for it."

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