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Hi friends! Legal stuff can be confusing—I get it! But I want to break it down and give you five legal agreements that all great wedding venues have. You can also listen to the full podcast where I talk about these different legal agreements. But before I jump in, I just want to say that these agreements are separate from your main venue rental agreement. A venue rental agreement goes without saying, so it’s not included in this list.
Maybe you haven’t even thought of these different legal agreements yet. Or maybe you know you need to put them into place as you’re building your venue. Perhaps you’ve been open for a few years, and you’re just starting to hire team members.
Some of the legal agreements I’ll be talking about are legally required and others are ones that I highly recommended. So, without further ado, let’s get into the five legal agreements that all great venues have.
This legal agreement is basically the fancy way of saying you need to have a business structure, and an LLC is the easiest one to get. At the very least, you need to set up some sort of entity for your venue business. Your tax accountant can guide you through this, but an LLC is an operating agreement that says, “This is how we run our business from an internal perspective.”
A multi-member LLC is an LLC that has multiple members. If you’re the only person running your venue, you will need a single-member operating agreement. This is a big document that your lawyer will put together for you that needs to be signed. Included in this agreement are the way you pay yourself and each other, the way you pay back the loan on the venue, and the way you decide on things that affect your business.
I want to quickly talk about ownership before I move on. If you’re working with a partner, having 50/50 ownership is really tough. It means you both have 50% decision-making power, and if you can’t come to decisions very easily, it’s going to make moving your business forward very challenging. That being said, these percentages are 100% negotiable—it depends on roles, responsibilities, and pay percentages. If you’re still negotiating ownership or researching the investment process, check out my free guide on what it takes to get the capital you need.
Remember, if you have the majority percentage, you become the CEO, and all the decisions AND failures fall on your shoulders. You have the majority stake in the business, and you’re the one who is responsible for the entity at the end of the day. These are all things you can put in your operating agreement. I highly recommend talking to an attorney to determine what goes into your operating agreement.
Another thing to include in your operating agreement is what happens if one of you dies. Sorry to bring the mood down, but it’s something you have to think about when you own a business. You have to create a will document for your business, and if you’re in a partnership, you need to have an agreement if one person dies or if both of you die. The only person who will ever read your agreement is you and the other members of your business, but having these things in place can make you feel empowered and give you peace of mind.
Here’s a question that I get asked a lot: “If I’m thinking about getting into business with my best friend or close sister, do I still need a multi-member operating agreement?” My answer to that is YES! Why? Because people are people. It’s that simple! This is a business and you have to treat it like a business. This document protects everyone involved so please, don’t decide not to sign these things because someone is close to you.
I can’t tell you how many emails I get from people not wanting to spend the money on creating an operating agreement because they’re going into business with family members. But at the end of the day, having everything spelled out in black and white protects both parties regardless of how close you are. It also makes people take everything more seriously because everyone understands what’s at stake.
Finally, an operating agreement is legally required when you own your own venue business. It’s something you need to have in order for your business to operate.
These are your terms and conditions as a link in the footer of your website. It’s not legally required, but it’s something we highly recommend because it governs how visitors are allowed to use the content on your site. It’s something that you might have to refer back to if, for example, someone copies all of the content on your site and publishes it on another wedding website. If this were to happen, now you have grounds for copyright infringement. It protects your intellectual property, such as blog posts.
We cover more information on this topic (and so many more!) in The Venue Academy™. Click here to learn more about TVA!
This legal agreement is something I’m really passionate about. It’s not required but highly recommended. Unfortunately, it’s almost guaranteed that while working in the wedding venue business you’ll have an instance where the bride needs to cancel the wedding. Unforeseen circumstances, a death in the family, the couple breaks up—things happen. You want to solidify a verbal agreement with a documented termination agreement. It will outline any details that are going to protect you and your investment: settlement fees, potential slander, etc. This is not limited to just venue owners because, if you’re working with clients, it’s just a matter of time before you have a situation where you’ll wish you had some sort of termination agreement to protect yourself.
Termination agreements protect both parties. It’s very smart and shows a level of maturity of the business owner to have one in their arsenal. I’m so passionate about this because personal experience has shown these agreements are often misunderstood, but they are so important and protect every party involved. This legal agreement gives both parties a sense of closure when you do decide to part ways.
When you start hiring people to help you, a lot of your first hires will be classified as independent contractors, and you’re going to want to make sure that you have a signed agreement in place with them. It’s similar to an employment agreement. My advice is to be very careful with how you are classifying independent contracts. You really need to talk to an attorney who is knowledgeable in employment law because there are some states who are cracking down on independent contractors. You should also give every independent contractor a copy of your employee handbook so they know how you conduct business.
For most venues, usually, the very first hire is a venue manager, and they’re often part-time, which by default classifies them as a contractor instead of an employee. Therefore, having this agreement in place outlines roles, responsibilities, pay, etc.
Before I wrap this up, I want to give a shoutout to someone who has helped me enormously in my venue business. Paige Hulse is my attorney and she has an online contract shop called The Creative Law Shop. There are so many different template contracts that you can 100% customize for your business, and the templates come with a step-by-step video. I use Paige for everything and she is one of my go-to people for my business. You can get 10% off your purchase by using the code LINDSAYLUCAS10. She also has a great educational blog with free legal education.
Alright friends, that’s all I have for you on legal agreements for now! If you want to know more about the different legal agreements I mentioned, don’t hesitate to reach out! If you’re looking at your business and thinking about making improvements like bringing in any of these policies, we have an amazing tool to help you. Check out the Business Audit for Venues!