If you’re in the online space, there’s a good chance you (1) have joined at least one membership site, (2) operate a membership site, (3) are preparing to launch a membership site, or a combination of all three. There’s a reason membership sites are so popular right now – it’s a great way to provide consistent value for a growing audience, while growing consistent recurring monthly revenue. You can focus all your time, energy, resources, and expertise in one area, and continue to grow that audience while building a consistent, reliable, recurring monthly income.
But while you’re building out your membership site and getting ready to launch – don’t forget the LEGAL pieces!
Did you know there are actually specific laws around this exact type of business model? It’s extremely important to get the legal pieces right, so as you grow, scale, and get more and more members, you aren’t doing so illegally, or risking losing it all to unnecessary fines, penalties, or lawsuits…especially when it’s over something that was completely preventable from the start!
As an attorney in the online space, here are my MUST haves for online membership sites:
DO NOT SKIP THIS STEP.
DO NOT LAUNCH WITHOUT THIS STEP IN PLACE.
THIS is where you will include all the language needed to comply with membership site and automatic payment laws. THIS document will ensure you are legally compliant, are avoiding potential fines, penalties, and lawsuits, and are protecting yourself and your business!
First – automatic recurring monthly (or annual) payments.
Since your membership site will likely charge members automatically every month, without providing them with advance notice, you NEED to follow a few very specific rules. There are actually several specific laws in place that address any type of product or service that automatically charges customers in this “subscription” model. Think Netflix, Apple Music, any other monthly subscription service you might pay for. Your membership site, though structured differently, operates the same way from a legal perspective. You are automatically charging members’ credit cards every month, without giving them an opportunity to cancel or renew before being charged, and because you’re doing that, you MUST clearly outline the automatic renewal payment process, including when and how much they will be charged.
Second – how to cancel their membership.
Members will continue to be automatically charged every month (or year) until they take action to cancel. Because they are the ones that need to take action to cancel, it’s VERY important you make it clear, simple, and known exactly how they may cancel their membership, including how much notice they will need to give, who they contact, what to say, and when they need to cancel by in order to avoid being charged the next month. This needs to be extremely detailed, and give customers a step by step guide.
While these laws do not exist in every state, if you are offering membership to people in all 50 states, as well as worldwide, you’ll need to follow the most strict set of state rules, to be sure you comply across the board. So if anyone is able to join your membership site, regardless of location, you’ll need to make sure you are completely compliant with all laws surrounding the subscription model of payment.
Third – contract terms
- Monthly payment amounts
- Refund policies
- Sharing their membership or account with someone
- Additional benefits to becoming a member
- Limitations of liability regarding the content and your program
- Disclaimer and “no guarantees” language
- How disputes will be resolved
- Protection of your paid content, so no one within the membership shares it outside the community
If you’re new to the membership site club and are like okay Christy, I don’t have any of the legal stuff set up yet and I just want to know I’m protected – send me an email at firstname.lastname@example.org and I’ll get you completely set up with the right templates, within 24-48 hours.