Legal Question in Business Law in Minnesota

You are giving up valuable rights in order to enter into an agreement with an inexperienced start-up with majority interest.

You are also buying into the company, which should trigger a review of all documents and restrictions by an experienced Business Attorney.

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Your situation raises mulitple issues and serious questions.

At 10% you would simply be along for the ride. As for the non-compete, my guess is what they really want is your contact list. So even if you sign on as only an employee, I would discourage you from signing a non-comptete...or make sure you "own" the contacts you bring into the company and have the company sign an identical non-compete in your favor.

Standard disclaimer: The comments above are based on limited facts and should not be considered legal advice. We do not have an attorney-client relationship. That said, good luck to you and let me know if I can be of further assistance.

As a Franchise Attorney I can say this. A cardinal rule of negotiation is always offer less than you're actually willing to give. The owner (who knows nothing) offered you, who knows everything, 10%. He's willing to give up more than 10%; this is just his starting bet. Go back with a 50% counter-offer and you'll likely end up in the middle somewhere, which is only fair. Beware of non-competes that extend beyond the term of your employment. Speaking of which, make sure you also have an employment contract. Above all, consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation