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Contracts for the purchase of apps and monthly maintenance fees

mdappmanmdappman Lounge Lizzard Posts: 11
I am one click away from becoming an app.cat user to start selling apps and I am just crossing my t''s and dotting my i's. I recently saw a few posts about using contracts but they are not very informative so I was wondering if anyone could share a little about how they use a contract for the sale of an app to a customer and also what kind of contract is used for a monthly maintenance contract.

My questions are, do you use one contract for the sale of the app and another for the service contract or do you use one contract for all? Is this a contract you made yourself or modified a contract to fit your needs? Also do you use any software that automatically sends the invoice or do you manually invoice for the monthly service contracts? Any ball park figures on monthly maintenance contracts? $25,$50,$99??? Discounts on prepaying a yearly contract?

The maintenance contract includes the updating of customer apps so how much time is spent updating customer apps on a daily/weekly basis? Again I am just doing my due diligence so I can come up with a solid business plan.Thanks.

Chuck

Comments

  • MrAppMrApp Lounge Lizzard Supreme Posts: 309
    Hi @mdappman

    Welcome to the lounge, in regards to your post I think it really all depends on your business model.

    We don't have contracts that our customers have to sign, instead we built a website from the ground up, doing this we built a 'build my app' section where a new member can build their app without us getting involved (similar to the e-commerce site but not so advanced). Once they confirm all their details they are asked to check our terms and conditions, once they click 'agree' they are tied in to an agreement with us.

    We find this to be better than having to sign contracts as our terms allow us to amend them when updates are added to the software.

    Food for thought



  • mdappmanmdappman Lounge Lizzard Posts: 11
    Hey guys thanks for all the advice. I am going to make up a real basic mobile app development purchase agreement that spells out what the customer is paying for and how much they are paying so there are no "gray" areas. I have been working on a rough draft of the agreement and I will post it here when done for some feedback.

    Also my agreement will require a $300 non refundable deposit with the signed agreement and the remainder due when the app goes "live". I live in Baltimore (hence the md part of my screen name) and from experience many business owners will not give an unknown person//business a check for thousands of dollars with the hope they return with the finished product. Once I have a portfolio of work and some references then I plan on changing this requirement to full payment in advance.

    As for service contracts, which I will now call "monthly maintenance" fees, will be required for all apps, I am planning the following rates:

    For the mobile app owner who is not going to update much during the month
    $24.95 Basic Monthly includes one update per month, additional updates $24.95 each

    For the app owner who does weekly updates
    $59.95 Weekly Plan includes one update per week per month. Max of 4 per month
    each additional update will be $24.95 each

    For the app owner who does frequent updates
    $99 Unlimited Plan offers unlimited updates per month

    By requiring monthly maintenance fees, it generates cash flow and pays me for taking the time to do the updates and hopefully keeps the customer focused on ways to maximize the mobile app potential. I also am planning some type of monthly etips newsletter informing app owners of ideas that others are using successfully and any new products and/or services that I can provide. It is just a way to keep my name in front of the customer.

    And finally, using Eric's advice I will include the following in the agreement:

    they can quit anytime, just by stopping their monthly payment. If they stop their monthly payment the App will be turned off on the next month’s anniversary.

    The monthly servicing is always paid a month in advance.

    Pay yearly in advance and receive 2 months free!

    More to follow....................

    Chuck
  • mdappmanmdappman Lounge Lizzard Posts: 11
    Hey all, here is the 1st draft of my Mobile App Purchase Agreement. Any and all feedback will be appreciated. Remember folks this agreement is meant to eliminate any gray areas so the customer knows exactly what they are paying for and that both parties are on the same page.

    Could someone enlighten me about how they sell the additional services that are provided at an additional cost? I am thinking I can sell them individually and also in a discounted package deal. Here goes......

    Mobile App Purchase Agreement

    1) This agreement on _____________20____ is between the buyer _______________________and mdappman, the developer, for a Mobile App to be developed for the following operating system/s:

    iOS(iphone)* ___ Android** ___ Both ___

    *iOS Mobile App is not able to be included in iTunes. **The Android Mobile App is able to be included in Google Play.

    2) Each operating system/s will have a downloadable application with it’s own widget that is able to be displayed on the home screen of the users phone.

    3) In consideration of the sum of __________________________ ($_______.00) which will cover the custom development of the Mobile App/s. A $300 non-refundable deposit is required with this signed contract for app development to begin and the remainder due when the Mobile App goes “live”.

    4) All Mobile App/s customers must have a Monthly Maintenance Package which is required to maintain and update (make changes to) the Mobile App/s. This Monthly Maintenance Package covers both the iPhone app and/or the Android app so one Monthly Maintenance package covers one or both apps.

    The Monthly Maintenance Package is on a month to month basis and is always paid a month in advance. App owners can quit the Monthly Maintenance Package at anytime just by stopping their monthly payment. The Mobile App will be turned off on the next month’s anniversary.

    Pay yearly in advance and receive 2 months free! Monthly Maintenance Package fees are non-refundable.

    Following are the Monthly Maintenance package fees:

    _____ $24.95 Basic Monthly*** includes one update per month, additional updates $24.95 each
    For the mobile app owner who is not going to update much during the month

    _____ $59.95 Weekly Plan*** includes one update per week per month. Max of 4 per month
    For the app owner who does weekly updates - each additional update will be $24.95 each

    _____ $99 Unlimited Plan*** offers unlimited updates per month
    For the app owner who does frequent updates

    5) * App owners can quit the Monthly Maintenance package at anytime just by stopping their monthly payment. The Mobile App will be turned off on the next month’s anniversary.
    **The Monthly Maintenance Package fees are always paid a month in advance and are non-refundable.
    ***Pay yearly in advance and receive 2 months free!


    ____________________ __________________
    Buyer mdappman



  • Terry TrainerTerry Trainer Lounge Lizzard Posts: 198
    Great work @mdappman ,
    Other services could include setting up or handholding the setting up of Facebook pages and the feed from there to your app, that would give some a feel of ownership.
    That would involve an hourly fee.
    Also setting up a website?
  • badlandsbruin32badlandsbruin32 Lounge Lizzard Posts: 2
    That is excellent work @mdappman! You and I seem to be at the same stage of our businesses development. I've been trying to come up with the contract as well. I've been searching many templates but what you wrote is probably the best I've seen so far! Well done.

    One note, I was considering including some language that would allow me to walk away from a client if necessary as well. I've had to deal with some "tough customers" in other businesses and learned that sometimes it is just best to cut ties and focus my energy in more productive places. So in the event that it just isn't worth working for an unbearable client I want to not be completely trapped by my own contract.

    I was thinking of making a small amendment to the fourth point of your template.

    "The Monthly Maintenance Package is on a month to month basis and is always paid a month in advance. App owners can quit the Monthly Maintenance Package at anytime just by stopping their monthly payment. The Mobile App will be turned off on the next month’s anniversary. The Mobile App developer also reserves the right to refuse service in the event that the buyer...becomes a major pain in the butt.

    Ok, I guess the last few words need some dressing up. Maybe some of you guys see where I'm coming from?
  • mdappmanmdappman Lounge Lizzard Posts: 11
    @badlandsbruin32, TerryTrainer thank you for the kind words.

    As I had mentioned in a previous post, I have been doing some preliminary work before I jump in and buy the software. Being self employed I had to wait for customers to pay me so I could pay the mortgage and buy the app.cat software. Just a day or two ago it was $199 for the unlimited software package.

    Today when I went to purchase it the price is now $499. Since we are coming up on years end, the holidays and the uncertainty of what the new year brings, I cannot justify the additional $300 at this time so everything I have done and am working on has stopped and I have to figure out what direction I am going in next.

    Good luck to you all. See you on the other side as they say. Not sure what it means but it sounds good and I hope it means may good things happen in your life. Happy turkey day everyone......................
  • Russell RhoadesRussell Rhoades Lounge Lizzard Posts: 19
    What about prices are subject to change due to customers attitude, This is problem not the best
    Way but sometimes a customer wants it all and is of the mind set that cause he wants it you
    Should give it to them. They think they can get the same App for next to nothing, and when you get one of theist type's you need a way to walk away, I have been dealing with people for over 50
    Years and have seen all types of people, when you think you have see them all a new kind pops up.
    Give your self an out even if you have to give a parcel refund.
  • joemadden1941joemadden1941 Lounge Lizzard Posts: 110
    The app making business is a fairly new game since the Iphone has only been available since 2007. Then the App Store in 2008. It would seem that you could sell an app and vanity website for whatever the market will bare, but App Cat makes our ability to make and promote an app at a very low cost, so I try to keep this in prospective.
  • Russell RhoadesRussell Rhoades Lounge Lizzard Posts: 19
    edited January 2016
    Question how can you sale an app then turn it off, that's a contradiction in the term sale
    This is a point a smart lawyer may make, but if you use the word lease then the app is never
    Owned but rented.

    If you state you are going to sale the app the the app no longer belongs to you and turning
    It off could lead to someone taking legal action.

    Either rent the app or let them own it, but if they don't want a maintiance package give them
    A news feed and the move on to your next app.
  • MrAppMrApp Lounge Lizzard Supreme Posts: 309
    Don't waste time doing contracts for each client, incorporate a members area on your website with a purchase section and add a service agreement (terms and conditions) which applies to all, this will also allow you to amend your agreement when new features are added.
  • Russell RhoadesRussell Rhoades Lounge Lizzard Posts: 19
    Now Thats A Good Idea.
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