Referral Agreement Generator

What is a Referral Agreement?

A Referral Agreement is a formal contract between two parties where one party (the referrer) agrees to refer potential clients, customers, or business opportunities to the other party (the recipient) in exchange for compensation. It establishes the terms and conditions of the referral relationship, including how referrals are tracked, qualified, and compensated.

Key Sections Typically Included:

• Definition of Qualified Referrals
• Referral Process and Tracking Method
• Commission Structure and Rates
• Payment Terms and Schedule
• Non-Solicitation Provisions
• Confidentiality Requirements
• Term and Termination Conditions
• Independent Contractor Status

Why Use Our Generator?

Our Referral Agreement generator helps you create a comprehensive document that clearly defines the referral relationship and compensation structure. By establishing clear terms from the outset, both parties can avoid misunderstandings, track referrals properly, and maintain a mutually beneficial business relationship.

Frequently Asked Questions

• Q: How should I determine referral commission rates?
  • A: Consider factors like your industry standards, profit margins, customer lifetime value, and the effort required by the referrer. Commissions typically range from 5-25% of initial revenue or a flat fee per qualified referral.
• Q: How long should a referral agreement last?
  • A: Many referral agreements have an initial term of 6-12 months with automatic renewal provisions. This allows both parties to evaluate the arrangement's effectiveness and make adjustments as needed.
• Q: Should I pay for leads or only for converted sales?
  • A: This depends on your business model and the value of leads in your industry. Some businesses pay a smaller amount for qualified leads and a larger commission upon conversion, while others pay only for completed sales.