A mastermind group is a game-changer for most businesses. Who wouldn’t benefit from the chance to learn and brainstorm 🤓 a business idea with some of the best minds in the field 😊? However, even the best mastermind group needs some oversight 🤔. That’s why a mastermind agreement is so important.
In business, a mastermind refers to a group of people (typically 3 – 5) in the same industry that comes together and bounces ideas off each other 💭 through a well-crafted mastermind program. These people can share their expertise and help you make decisions about a business structure, membership platform, initial payment plan, business program materials, and more through the mastermind process.
But what happens if someone becomes unprofessional during the partnership? What’s confidential in the agreement 🤷? A mastermind agreement covers all that and more. Read on to find out exactly what a mastermind agreement is and what it contains.
What Is a Mastermind Agreement?
A mastermind agreement is essentially a contract 📃 that covers responsibilities, obligations, resolutions, and expectations of the people involved in a mastermind group. Members of a mastermind usually agree to these terms during the applicable registration process.
It’s important to have one drawn up to keep your business affairs legally sound ⚖️ and clarify essential proprietary rights. During the registration process, the agreement needs to cover two main points:
- What everyone needs to do
- Which ideas, information, brainstorming, etc. must remain private
Important Points for a Mastermind Agreement
An effective mastermind agreement protects everyone involved in the mastermind program to the maximum extent. It also limits the risk of having to face legal repercussions when dealing with a difficult business partner 🙍.
When setting up your mastermind agreement, don’t forget to cover the following aspects. You can then ask members to promise to abide by the entire agreement during the registration process for internal business purposes.
1. Group Members
As an important part ✔️of your mastermind agreement, you need to name each group member (business partner). They need to willingly agree to participate in your business mastermind program and agree to honor the program materials you put in place.
You probably want to mention (in your registration form):
- How long ⌛ this agreement lasts and the applicable registration (including a monthly membership fee if applicable)
- The applicable limitation of liability for the copyright owner
- Disclaimers of warranty to respective owners
After all, you can’t ask someone to sign a contract without an expiration date 🤷.
This is one of the most important parts of a mastermind agreement. A business mastermind has access to a lot of important information and exclusive property 💬. You may learn secrets kept for internal business purposes, yet-to-be-disclosed service names, payment processor details, and more as part of a mastermind group.
Whether it’s written, spoken, electronic, or otherwise communicated, your agreement needs to ensure that all members keep information confidential 🤐 and adhere to the intellectual property rights. You wouldn’t want any of this information going to an adverse party recipient 🙊 or unintended receiving party:
- Personal information
- Business plans
- Intellectual property rights
- Trade secrets and other licensed materials
It’s also a safe bet to restrict recordings and written transcripts during meetings to prevent leaks by even an unintentional disclosing party. This can further protect the mastermind process from material breach of security.
It goes without saying that in this type of setting, every member of the mastermind group must act professionally 👔. Each member has the sole responsibility to treat others with respect and understanding 🤝, even if they find themselves in the hot seat.
It’s a good idea to have members agree to refrain from talking about personal issues, especially sensitive ones from their personal life. This should only happen if it’s relevant to mastermind issues and the applicable terms to the maximum extent.
It should go without saying that members of a mastermind must be reliable. However, you need to include this clause just in case. Missing important meetings and showing up late for meetings can prevent a group from flourishing to its fullest extent 😠.
However, life does get in the way for everybody from time to time 🤷. Your agreement needs to make members aware of the designated time period for meetings and give them some flexibility for missing a few meetings.
5. Membership Termination
This is where you address members who have breached the terms of your joint venture and are in the hot seat. You must also mention the consequences of their breach. If a member (business owner) isn’t able to fix their mistake or prevent it from happening again to the extent permissible, then they will need to leave your mastermind group 🚪. You can make this clear in your mastermind agreement.
Remember to clarify that even if someone gets kicked out of the mastermind, they still need to follow the confidentiality clauses. And if you’re worried about things getting really ugly, you can include an arbitration provision as well.
Need Legal Help with Your Mastermind Agreement?
Drafting a mastermind agreement isn’t too difficult for someone who knows their way around legal documents. That’s why, if you’re a business owner, it doesn’t hurt to have a legal professional at your side when you go about these matters 📋. If you’re a mastermind manager or are helping to arrange a mastermind & group coaching agreement, we can offer the help you need 😁!
In addition to putting out many blog posts for informational purposes, we’ve put together a professional and effective customized mastermind agreement 🙌 that can offer great help and protect the needs of your mastermind to the fullest extent. If you’re looking for the best help with putting together your mastermind agreement, buy our template (linked above) or book ✍ for a consultation with us here. That way, your mastermind can focus on great ideas instead of the paperwork!