Many people dream of having their own businesses and quit their jobs so they can have the financial and personal freedom of running their own business. However, setting up a business does take money, time, and knowledge. Many people interested in having their own businesses turn into franchises where the franchisor has a proven method of doing business and a proven business plan and method that works. In lieu, the franchisor wants to be compensated for their idea and most of them will want a royalty as long as you use their name. The business owner will get updated training in return for giving a percentage of the income they make. If the partnership works out where the franchise owner gets many benefits by the franchisor and the franchisor makes money due to the franchisee being successful, it is a win win formula. However, that is not always the case. McDonalds Hamburgers started the franchise concept and today, there are thousands of franchises throughout the country and franchises are popping up every day throughout America. There are thousands of businesses that want to make a quick buck and think that by offering franchises of their business, they will become the next McDonalds. Most Franchises cost $100,000 just for the franchise fee and this will limit the amount of entrepreneurs who can become franchise owners. Recently, there are companies where they offer training programs where for $5,000, they will train you in owning your own service related business. There are programs for insurance companies, credit repair companies, equipment leasing companies, and loan brokering companies. Buyers for these training programs need to think about what they are getting into. It takes many years to become experienced in any field of consulting or brokering. There is one company called Blue Coast Savings where they charge over $20,000 for someone who wants to be a business consultant. You then pay that training fee and whatever deals you turn in, they will take a clip off that. Other companies like Loan Consultants, Global Broker Systems, and Vernon Street Capital will just charge you an upfront one time fee and offer training which is only a few days on how to become a loan broker. Consumers need to do their due diligence and make sure they know what they are getting into. It takes some time to be knowledgeable in being a financial loan broker and if you think that money is raking in once you are done with a training program , you are mistakien. I am not saying these training programs are scams but you need to know that if it is too good to be true, then it is. Here is a sample contract on one of those training programs for being a loan broker by Vernon Street Capital:
This Agreement (the "Agreement") is made, entered into and effective as of the _____________day of______________________________________________, 2016, by and between _________________________________________________________(“Client”), and VERNON STREET CAPITAL ("VSC"). WHEREAS, Client is interested in obtaining training for the purpose of originating mortgage loans in addition to other services provided by VSC; WHEREAS, Client desires to engage the services of VSC and VSC will provide training and support to provide the knowledge base for Client to pursue the opportunity to develop as a Financial Services company. NOW, THEREFORE, in consideration of the mutual promises and conditions set forth herein, it is agreed as follows:
ARTICLE 1 -- CAPACITY
1.1. Client hereby engages VSC to perform services pursuant to the covenants and conditions of this Agreement, at the compensation herein stipulated, and VSC hereby accepts the engagement upon these terms.
1.2. During the Term (as defined below), VSC shall devote such time, interest, and effort to the performance of this Agreement as VSC determines may be reasonably necessary to fully comply herewith.
ARTICLE 2 -- DUTIES AND SERVICES
2.1. The scope of VSC’s duties and services shall be as follows:
2.1.1. VSC shall work with Client to assist in evaluating: (a) market trends, business development and growth opportunities in the mortgage industry.
2.1.2. VSC shall advise Client with respect to practices and procedures related to the mortgage industry and other services provided by VSC.
2.1.3. VSC shall provide Client with funding sources along with the lenders contact information which will allow Client the ability to solicit and provide residential, commercial and business loans to qualified borrowers.
ARTICLE 3 -- TRAINING
3.1. The specific services to be provided by VSC to Client shall be as follows:
3.2.1 Online training focusing on the various aspects of the lending industry, including but not limited to: business structure, industry overview, marketing and lead generation, loan origination and structuring, application process, loan submission process, loan pricing, credit, title insurance, escrow process, loan modifications, credit improvement, debt management, commercial loans, business loans, factoring, equipment leasing, hard money loans and office set up. VSC will arrange for Client to have access to loan origination software and industry standard forms.
3.2.2. Following the online training discussed above, you will have ongoing support and training via the telephone and additional online webinars on an individual basis available when needed, thereby providing Client with practical industry experience.
3.2.3. VSC will assist Client to establish a professional looking website that potential customers may use to submit loan applications, view current interest rates, and
extensively research the loan process.
3.2.4. Client will receive on-going support to assist in analyzing, processing, and submitting of loans and the determination of possible customer needs for various other programs
(ie, credit improvement, loan modifications etc.).
3.2.5. VSC will provide Client with training on software which will enable Client to originate loans. The software will be industry standard and appropriate to provide the documentation necessary to document loans.
3.2.6. VSC will assist Client with support and guidance in obtaining the necessary license that is required to do residential loans.
3.3. In fulfilling the duties required pursuant hereto, both parties shall conduct themselves in a dignified manner befitting its relationship.
ARTICLE 4 -- TERMINATION
4.1. Client may terminate this Agreement upon written notice to VSC at any time, with or without reasonable cause. VSC may terminate this agreement only if it has been proven that the Client has been involved in any illegal or unethical behavior which may have a direct or indirect effect on VSC.
ARTICLE 5 -- PAYMENT
5.1. VSC shall be paid, as compensation for the services described herein, a total payment of ($4,995.00) payable in full upon the execution of this Agreement.
ARTICLE 6 -- COMPLIANCE WITH LAW
6.1 VSC shall comply with all current federal, state and city laws, statutes, ordinances, rules and regulations and the orders and decrees of any court or administrative body or tribunal in connection with VSC performance of its obligations under this Agreement.
ARTICLE 7 -- INDEPENDENT CONTRACTOR
7.1 VSC is acting as an independent contractor in furnishing the services or materials and performing the work required by this Agreement and is not an agent, servant or employee of Client.
ARTICLE 8 -- CHANGE IN CLIENT'S STATUS
8.1. This Agreement shall not be terminated by Client's dissolution, or by any sale or merger in which Client is not the surviving or resulting entity, or on any transfer of all or substantially all of Client' assets. In the event of any such sale or merger or transfer of assets, the provisions of this Agreement shall be binding on and inure to the benefit of the surviving business entity or the business entity to which such assets shall be transferred.
ARTICLE 9 – LIMITATIONS OF LIABILITY
9.1. Recognizing that VSC role is advisory, and in partial consideration of the services to be rendered hereunder, Client hereby waives any claims against VSC and its officers, directors, agents and representatives for any acts or omissions of such persons or parties arising from the services provided hereunder. VSC is being engaged to provided business advice and general consulting services. Client is not obligated to accept the advice or to follow the recommendations of VSC. VSC therefore cannot be and shall not be responsible the performance of Client’s business, operations, revenues or profits.
9.1.1. Client shall indemnify VSC and its officers, directors, agents and representatives from any or all losses, claims, demands, damages and/or liabilities to which any of such indemnified parties may be exposed or subjected and which arise out of this Agreement or the relationship(s) established by this Agreement. Furthermore, VSC shall have no liability with respect to its obligations under this Agreement for consequential, exemplary or punitive damages, even if it has been advised of the possibility of such damages. The liability of VSC, for any reason and upon any cause of action, shall be limited to the compensation described in section 5.1.
ARTICLE 10 -- ARBITRATION
10.1. Any dispute(s) or difference(s) which arise during the course of this Agreement and which either involve its interpretation or meaning, or relate to performance required hereunder shall be submitted to and resolved by binding arbitration; provided, however, that the parties are not waiving and are expressly reserving their right to seek injunctive relief by judicial process. Nevertheless, the parties may, by subsequent consent, agree to submit requests for injunctive relief to an arbitrator or arbitration panel.
10.2. If either party shall, in the opinion of the other party, be in breach of or default in the performance or observance of any term or condition of this Agreement, the non-defaulting party shall notify the defaulting party in writing of such fact, and the defaulting party shall have thirty (30) days from the receipt of such notice to remedy or correct such breach or default. If the non-defaulting party asserts that the breach or default has not been timely and properly cured, it may commence arbitration as described herein and ask the arbitrator to deem this Agreement terminated and/or to grant such relief as is shown to be appropriate.
10.3. In the event the parties are unable to agree upon an arbitrator to hear and resolve their differences (hereinafter the "Dispute"), each party shall designate one person licensed as an
attorney in California. Said two attorneys shall select the neutral arbitrator. Unless agreed upon by the parties to the contrary, arbitration shall be by a single, neutral arbitrator (hereinafter, the “Arbitrator”).
10.4. The Arbitrator shall have the full and absolute authority to interpret this Agreement, to deem conduct by the parties as either in compliance with or in breach of this
Agreement, to terminate this Agreement, and (if a breach is found) to award appropriate damages or relief.
10.5. The Dispute shall be settled in accordance with then existing California law. While evidence may be accepted, omitted, considered or excluded in the discretion of the Arbitrator, the Arbitrator shall be bound by the California rules of evidence and by the California Arbitration Act (CCP 1280 et seq.). The final decision of the Arbitrator shall be served on the parties, in writing, within 20 days after the conclusion of the arbitration hearing.
10.6. The Arbitrator's decision shall be binding and conclusive. Neither party shall pursue, prosecute or otherwise file any legal action or proceeding (other than to seek injunctive relief as described above). Except as provided in CCP 1286.2, no appeal shall be taken from the Arbitrator's decision or from any subsequent court order confirming said decision. The parties shall share equally the costs incurred by arbitration. The Arbitrator, however, shall have the discretion to award such costs (including the Arbitrator’s fees) as well as reasonable attorneys’ fees to the party prevailing in the arbitration proceedings.
ARTICLE 11 -- CONCLUDING PROVISIONS
11.1. This Agreement contains the entire agreement between the parties and supersedes all prior oral and written agreements, understandings and commitments between the parties. No 8 amendments to this Agreement may be made except by a writing signed by both parties.
11.2. This Agreement has been negotiated, executed, delivered and is to be performed in the State of California, and shall be construed and interpreted in accordance with the laws of California.
11.3. Any notice to Client required or permitted under this Agreement shall be given in writing to Client, either by personal service or by registered or certified mail, postage prepaid, addressed to Client at his or her then principal place of business. Any such notice to VSC shall be given in a like manner and, if mailed, shall be addressed to VSC at its address then shown in Client's files. For the purpose of determining compliance with any time limit in this Agreement, a notice shall be deemed to have been duly given (a) on the date of service, if served personally on the party to whom notice is to be given, or (b) on the second business day after mailing, if mailed to the party to whom the notice is to be given.
11.4. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement shall nevertheless remain in full force and effect. If any provision is held invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in full force and effect in all other circumstances.
11.5. The section headings in this Agreement are for convenience and reference only and shall not be construed or held in any way to explain, modify or add to the interpretation or meaning of the provisions of this Agreement.
11.6. In the event of any legal proceedings, including arbitration, to interpret or enforce this Agreement, the prevailing party shall be entitled to recover, in addition to any other appropriate relief, its reasonable costs and attorneys' fees.
11.7 No agreement or understanding purporting to alter, vary, modify or extend this Agreement or any provision hereof shall be binding upon either party hereto unless in writing and signed by both Client and VSC.
11.8. The waiver by either party of a breach by the other of any provision of this Agreement shall not be deemed a waiver by the non-breaching party of any subsequent breach.
ARTICLE 12 - COMPENSATION
12.1 Client receives compensation in the following manner. Client shall be paid compensation for all loan submissions processed by VSC at the rate of 100% of the net proceeds from a combination of the loan origination fees and rebates paid by the lenders when a loan funds and closes. Residential loan commissions range from 1%-3% of the loan amount and is set by you the affiliate. This is based on how competitive you want your rates to be. Commercial loan commissions range from 1%-3% as well. There are no limits to how much you can charge on a loan so these percentages are based on an industry average.
Business loan commissions typically range from 6%-15%. The commission rates vary based on the type of loan. Equipment leasing commissions range from 10%-15%.
Business lines of credit, factoring loans and merchant cash advances have commissions ranging from 6% - 10%.
12.2 VSC will process and pay all amounts due Client within five business days of the loan closing if VSC is the lender or receives the commissions on behalf of the client. Executed by the parties as of the day and year first above written. Agreed to and accepted.
VERNON STREET CAPITAL, LLC CLIENT
2386 Fair Oaks Blvd. Suite 200F
Sacramento, Ca 93108
By: __________________________ Signature: ________________________
Name: _______________________ Name: __________________________
Date: _________________________ Date: __________________________
Company Name: _______________________________
The Gustan Cho Team at CrossCountry Mortgage Inc. NMLS 3029
address: 425 North Martingale Road Suite 1280, Schaumburg, IL, 60173