memorandum of understanding with franchises

I have been thinking that we should actually just charge based on yearly income and nothing else. Remove all the other limits. This makes everything simpler and safer no?

It could be graded thus (all yearly):
* first £2000 - free
* income above £2000 @ 10%
* income above £10k @ 20%
* income above £50k @ 30%
* income above £100k @ 40%
This naturally means that the bigger a franchise gets, the more it contributes to others struggling to start around the world.

Great new addition on arbitration section. Well done! We should probably put in a note on who chooses the mediators / arbitrators.

Our concerns about involving larger companies go beyond brand damage. Larger companies often have expensive lawyers, are acutely profit motivated and very aggressive. Involving them is dangerous because they can take over.

9carrots is supposed to help non-currently-ethical (improving?) Local Business improve in a positive way. Local Businesses that are already very ethical in nature don't fit in to 9carrots very well. The ethical Local Business directory aspect of 9carrots is being discussed still. 9carrots is also about local community, small suppliers and a solution to Climate Change. Very big business does not fit in to that easily.

I would be happy to increase the limits on Local Business types, but not to the level where they become dangerous to us.

Getting bigger businesses involved in other ways, e.g. sponsorship, staff secondments, advertising, etc. is more about protecting the brand.

Agreed that there should be some mechanism to prevent philandering. Once again, I feel that having the "resolution of Ethical Disagreement" will resolve many of these issues since 9Carrots UK will have the power to pull the system should they see unethical conduct taking place in any form. With monthly/quarterly/annual internal (note: internal statements are highly detailed) financial statements this should allow 9Carrots UK to identify problems.

I certainly agree that maintaining positive community relations is essential, and that someone should NOT be payed if they are not deserving. At the same time, I firmly believe that effort = reward and that to retain skilled personnel they need to be compensated adequately. For example, I have the pleasure of sitting on the Board for CM (see my personal email for clarification of this acronym, since I don't want to publicly display their internal information), an organization purely powered by community and their belief in the organizations principals and conduct. They are also developing a web portal tool that will be franchised out to regional partners, much like you 9Carrots. They are willing to pay part-time workers 50k, and a full time CEO 100k+. This is because they realize that to keep an organization growing and retain incredible people they need to be remunerated appropriately, otherwise they will leave for greener pastures. While staff within CM are not receiving anywhere near that level of payment yet, it provides them the motivation to keep going because not only does the organization align with their passion but will provide for them as well. They could keep working their for the rest of their life, support a family, and live well. That's powerful. That's sustainable (The best definition of sustainability I have ever heard is that it equals positive long-term relationships. With the planet, with people, with everything). I have similarly spoken with mentors who served in a coop with capped salaries, who stated that it was great and their heart was in it but that ultimately they had to leave due to the financial situation.

In regards to the public questioning spending, a key part of this organization is transparency. We SHOULD provide the public our internal, highly detailed, financial statements so they can question our ethics. Maybe it comes to pass that there is improper remunaration occurring... if this is the case then things would proceed to the "resolution of ethical disagreement." If a franchisee is at the point that they can pay a CEO 100k+, 9CarrotsUK will be able to afford the cost of mediators/arbitrators to sort it out.

So where do we go from here? What mechanism do we put in place that has legally binding intent?

1) All highly detailed monthly/quarterly/annual internal financial statements are to be made publicly available for review
2) All highly detailed internal financial statements are to be made available for review by 9Carrots UK
3) Staff wages are to be set by the Franchisee, and will be tied to an hourly wage competitive with the region. Competitive Hourly regional wages will be highlighted on every internal financial statements, with resource(s) used to determine said wages.
4) Should wages be determined unethical, 9CarrotsUK retains the right to enter into the "Resolultion of Ethical Disagreement" process and proof must be provided that wages have been earned and are deserving. For example, hitting/missing performance benchmarks (which we are including, such as 2000 transactions a year, and are an integral piece of any organization), hours clocked, etc... 

Thoughts?

Totally agree with this! Much easier and understandable.

I would change things up a bit though...

* first £5,000 - free
* income above £5000 @ 10%
* income above £50k @ 20%
* income above £150k @ 30%
* income above £250k @ 40%
Note: Above fees DO NOT include funding from grants, whether accessed from public or private institutions.

This will probably still need to be tailored based off the financial requirements of the Franchisee, including payment of staff and expensenses, etc... will put more thought into this based off potential revenues. A big help as well to temper the income split would be the amount of time your new staff will be putting in. Please have them track their effort! This will allow me to know what hourage/payment staff would receive here in my area.

Another factor with this is what 9CarrotsUK is doing with the monies received. If things are wildly successful here, and I am sending over potentially 100k+ a year I want to know what you are doing with that money and how it is further developing 9Carrots. This goes back to the concept of having a vote in how 9CarrotsUK is run as a franchisee, keeping you ethical as well (I know you guys are ethical, but as you say it's always better to have things legally determined before-hand.) Perhaps the number of votes could coincide with the amount of funds sent over (i.e. $1k to 9CarrotsUK = 1vote)? This might create an issue where larger countries have more sway... not sure about how to resolve that. Could just do 1 vote per country.

We also spoke about a consensus based system. I think this is a great idea, and the optimal path to take. Will this make this potentially difficult? yes. Will it result in better decisions? yes. I recommend checking out the following wiki (http://en.wikipedia.org/wiki/Consensus_decision-making#Non-unanimous_consensus) on consensus based models and "non-unanimous consensus" models, and continue discussing various methods for consensus. In regards to the issue of having franchisee's all over the world achieve consensus, initially with only a few franchisee's I don't see too many issues stalling progress especially if they are like-minded individuals (like you guys and myself!). As more countries come on board and as the organization becomes profitable the ability to organize video-conferencing and in-person AGM's (Annual General Meetings) becomes a real possibility. The cost of such conferences/agm's could be part of where the 9CarrotsUK monies go as well.

Thoughts?

You know what. I say lets hammer down some details that can be put in writing and make it as fleshed out as possible.

In addition to all the requirements, however, we also add a clause called something like "Reasonable Exceptions"

Application For Exception
-------------------------------
Should a Local Business not fall in line with the Code Of Conduct required by 9Carrots, but wish to be a part of the program they may submit an Application For Exception. This Application For Exception will be submitted to the Franchisee of their country of operation, and the Franchisee will make the local 9Carrots community aware of the application (via email?) and host it online for public review for a period of 30 days. Should no Substantial Objection (this needs to be better defined... perhaps by a lawyer) be raised within the period of review, a poll will be opened for 10 business days for 9Carrots users to vote in favor or against the Application For Exception. Should 80%+ of the 9Carrots community vote in favor of the Application for Exception, the application will go through a final review by 9CarrotsUK for 10 business days. If the Application For Exception is approved, the applying business will be permitted entry into the 9Carrots system. If at any time the Application For Exception is found to be untruthful or contain any misrepresentation of facts or issues past or present, the applying Local Business will be immediately put under probation, and if deemed fitting by the Franchisee removed in entirety from the 9Carrots system with no due recourse. Throughout the entire process of the Application For Exception all information will be made publicly available, including decisions made at every step of the process whether in favor or against the applying Local Business.

How's that?

In regards to sponsorship, lets nail down some basic criteria to follow making things legally binding and include some form of an Application For Exception that the franchisee would put togethor for review by 9CarrotsUK.

On the downside, this would add an additional hassle to make a sponsorship application on the Franchisee's part... still, good decisions aren't made in haste.

Yep :)

I have changed this point from red to black in the main wiki now.

Ok. I have no problem with Joshua protecting his business plan and funding applications. I also understand that open source does leave the model open to being copied and implemented more widely but badly and thus failing to make the real social change we are hoping for. I would like to continue with our open source approach however with regards to funding applications, this MOU, our Articles of association, ideas, TODO lists and planning. We will not be creating a business plan because they are not required for grant funding applications in the UK. Is that a good approach Joshua? Or do you feel that we are still too open?

The reality is, of course, that I have not had time to externalise all the code properly. So effectively we will remain closed source until we get funding anyway. Also, because only a few people know about the community area, no one has yet contributed. Our open source attitude has helped us though.

@Joshua: You have mentioned private investment a couple of times. You have understood that you cannot legally apply for dividend paying investment from the not-for-profit structure? You will only be able to apply for non-repayable grants and bank loans.

I also ask this because it is very unusual for a grant fund provider to ask for a business plan. And thus, what purpose are you intending on creating the business plan for?

Glad to hear that this is an area we are in agreement upon keeping the code itself internal at the moment. I feel that at the appropriate time and place going fully open-source will generate a tremendous amount of feedback and even further community engagement.

I don't think there is any clear way to outline when the code can go open source... I am comfortable having a tacit agreement with you guys on this.

Lets keep toying around with this one. I like the idea of a franchisee having a say in the use of funds it has specifically piped over to 9CarrotsUK, and when considering larger capital investments it makes sense that 9CarrotsUK would then have to ensure several franchisee's are on board with the proposed use of funds. (ie. Make revamps to system costing 100k, requiring say 4-5 franchisees to review and approve the use of funds)

This would also avoid potential costly delays from using a consensus model while still ensuring input is garnered from franchisees. Can you guys type something up for this that I could review?

Just checked out the BALLE (Business Alliance for Local Living Economies), which has a strong emphasis on buying local as part of their "Look Local First" program which has been instituted in a variety of communities. They list the following as some ways to identify if a business is local:

   1.  Is the business privately held (not publicly traded)?
   2. Do the business owners, totaling greater than 50 percent of the business ownership, live in your local region?
   3. Is the business registered in your state, with no corporate or national headquarters outside your region?
   4. Can the business make independent decisions regarding the name and look of the business, as well as all business purchasing, practices, and distribution?
   5. Does the business pay all its own rent, marketing expenses, and other expenses (without assistance from a corporate headquarters)?

Maybe this can assist in defining criteria for what consitutes a local business accessing 9Carrot?

I have put Joshuas' other suggestions in to the text and changed much red to black:

"Pro-rata limits for director/staff remuneration will be reviewed annually, and if needed adjusted to reflect changing economic conditions and wage rates in the country the Franchisee is operating in."

"I suggest having the volume-based charging up for annual review (maybe at the 9Carrots AGM)"