Introduction
Welcome to the Simplifying Legal podcast, brought to you by Businessese. I’m your host, Danielle Liss.
Many years ago, someone told me I was the least lawyer-y lawyer she’d ever met because I helped make legal easier to understand. To this day, it’s one of the best compliments I’ve received in my professional life.
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My goal is for you to walk away from each episode thinking, oh, that was easier than I thought it would be.
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Episode Content
Hey there, I’m Danielle. Welcome to episode 23 of Simplifying Legal for Small Business Owners. Today, we’re talking about legal for membership sites.
Disclaimer: As always, before we get into today’s topic, a quick disclaimer. This podcast is meant to provide you with legal information only. It’s not legal advice and does not create any type of attorney-client relationship between us. Please don’t take any action without consulting your lawyer first.
Now, let’s dive in to today’s topic.
Before we talk about the legal needs of a membership site, let’s talk a bit about what a membership site is.
Typically, a membership site is a website that has a subscription model. Subscribers, or members, pay a fee to access certain content and benefits. Usually, it’s a monthly subscription fee, but this can vary. I’ve seen many companies who will run periodic specials for a discount if you buy a year or lifetime membership.
The types of content included in a membership can also vary. It might be regularly updated content, like modules or PDFs. It might include a forum where the members can interact. Some companies have a website with content and then use a private Facebook group for the community.
There are many ways to set up a membership site component in your business. Usually, the key that differentiates this from other products is the subscription model, whether your members continue to pay for ongoing access to the content and/or the community.
If you want an example of a great membership site, one of my personal favorites is Food Blogger Pro. I’ve had the pleasure of serving as an expert in their community for a few years and I am always so impressed with their content.
I think Food Blogger Pro provides a great example of what a membership site can be. Some of the things they offer to their members are courses, monthly topics, question and answer sessions, a team of experts to ask questions, and an active forum. From getting started as a blogger to traffic growth to monetizing, they have a wide variety of resources. I’m one of their biggest fans, so if you are a food blogger, definitely check them out if you want support while growing your business. I also highly recommend their podcast.
There are a lot of benefits to hosting a membership site and it can be a great way to generate income for your business. But, of course, if you have a membership site, you need to ensure you are protecting your business on the legal side.
Protecting Your Membership Site
Now let’s talk about some of the legal needs of a membership site.
There are some membership sites that prefer to enter into an agreement with each individual member. However, most often, a membership site will rely on different website policies on their site that will serve as the contract for between the business and their members.
Terms and Conditions
The first commonly used policy for a membership site is terms and conditions.
Membership site terms and conditions cover many aspects of the membership site, and act as the contract between you, the owner of the membership site, and your members. This is the fine print that people may not read. However, it’s absolutely necessary to have these terms outlined so you can rely on the terms in the event of a dispute.
When you establish your membership site terms and conditions, it will typically govern both the public and paid portions of your website. For an in-depth discussion of what is usually included in terms and conditions, check out Episode 4, which discusses how to protect your website. This gives an overview of the types of terms that will be in all website terms and conditions and usually appear in most terms for a public-facing website.
This includes things like:
- How your site can be used
- Intellectual property notices
- Policies related to linking third party websites,
- Indemnity
- Waiver of warranties, and other common legal terms.
One thing that I strongly recommend in all terms is a statement reserving the right to change the terms.
As I said, these are all extremely common areas that would be included in website terms for any public-facing site.
Now, let’s focus on what you should include in your membership site’s terms, which is differentiated by the piece of the site that is only accessible through a paid subscription.
First, your terms should include something about account creation and how a member can use their account. In most membership sites, it is necessary to create an account to access the members’ only content. In the terms, you may want to include any relevant information about their account. For example, they may be required to create a username and password and it is their responsibility to ensure their password remains confidential. Some terms will include a prohibition on sharing login information with third parties.
Usually, the account section of the terms will also state that a valid account is necessary to access the paid portion of the site. So, if for any reason the account access is revoked, the membership programming or community may no longer be accessible.
Or, depending on how your membership is structured, you may have an account option that provides multiple people with the ability to access the content. If you offer access to more than one person, this may be referred to as multiple seats for the account, with each seat meaning access for an individual. This is common for some memberships that focus on business owners. And your account might have the ability to add multiple team members. In that case, your terms may need to include additional guidance on how the account holder can manage the seats for each team member. Your terms might also then provide information on how to increase or decrease the number of seats for that account.
Some membership sites will offer different tiers of membership. For example, Tier A will get access to one level of content. Tier B is an upgrade which gets everything that Tier A has and some additional benefits. If this is the case, you may want to address how to make changes to the tier of the account in your terms. For example, can someone upgrade or downgrade at any time? What is the process to do this? Is it only effective as of the next billing cycle or is it immediate?
Purchase Policies
Next, let’s look at your purchase policies. This is one of the most important parts of the terms for your membership site.
First, if you offer a free trial, make sure you discuss how the trial works. How long does the trial period last? Is it necessary to enter a credit card number to get access to the free trial? If so, do you automatically bill them as soon as the trial expires? If no credit card is required, do you automatically stop their access after the trial period expires?
Be clear about how long the trial lasts and what the next steps are.
For example, if you have a 7 day free trial and a credit card is required, your terms may say that the trial is free for 7 days and, if it is not cancelled, the credit card is automatically billed on the 8th day.
Also, if during the free trial you limit access to certain features, you may want to provide additional details about what might change once they move to a paid subscription.
If you don’t offer a free trial period, your purchase policies will often include information on pricing and billing. For example, do you bill monthly, quarterly or annually? Or, does it depend on what membership duration is selected at the time of purchase? Here, you may state that you will auto-bill the credit card information on file each time a payment is due.
It’s also important to state how you will handle a missed payment. For example, if someone’s credit card expires or the number changes, their payment may be declined. How do you handle that? Most companies will reach out to the member for updated information. However, if you are unable to get a new payment method, after a certain number of days, you will likely want to suspend their membership until the credit card information is updated.
Next, what happens if someone wants to cancel their membership? What steps should they take? Is it an easy update to make in their account profile or do they need to email for cancellation?
If you require a certain number of days notice prior to the next billing date, be specific about this in your terms. For example, some companies will say that they need 2 business days to ensure processing before the next billing date.
Next, how do you handle refunds? If you offer refunds, what process does your member need to follow to make a request? This is a big area for potential customer complaints, so make sure this is clearly stated in your terms.
Many membership sites will say that there are no refunds for amounts previously billed, but they give the ability to cancel before the next billing cycle.
For many membership site owners, refund requests are common, especially if the member didn’t remember that they were about to be billed. This is why it’s important to include your policies in your terms. Make sure they are easy to find and understand.
And, like the purchase policies, the last section for your terms is also extremely important and that’s governing usage of your intellectual property.
Intellectual Property
Many membership sites give access to a company’s intellectual property. These are the content that you’ve created for the members, like educational modules, which might include videos, or printed materials, which are available as a PDF for members to download.
In your terms, you should discuss how you allow your members to use the intellectual property that they have access to. Usually, the intellectual property provision in your membership site’s terms will state that the content is available for the member’s personal use only, but it may not be shared or distributed with any other parties. It may also prohibit the members from using it in any commercial way, like creating their own products based upon the information you have.
Your intellectual property is a critical asset for your business, so ensure that your terms address your rights and that you are clear on how members can use that content. If you want more information on protecting your content, check out Episode 22.
This is the overview for what to consider for your terms and conditions, but there are three additional policies that you will want to consider for your membership site.
Privacy Policy
The next important website policy for your membership site is a privacy policy.
A privacy policy explains how a member’s personal information is collected and stored and if any third parties receive the personal information. This information may include a member’s email address, IP address, or information about their purchases, and the policy should explain how that information may be used. It also can include notices regarding things such as GDPR and CCPA (if applicable) and information about the use of cookies.
Disclaimer
For most membership sites, another policy to include is a disclaimer.
A disclaimer can help protect you from liability related to the publication of content in the membership. The disclaimer acts as a notice to members that the content you are providing is solely for informational purposes.
For example, it might state, all content provided in the membership is for informational purposes only and is not meant to serve as individualized advice.
Depending on the nature of your content, your disclaimer may also need to include language about the viewer’s use of certain content. For example, if your membership site includes discussions about medical, nutrition, fitness, legal or financial matters, members should be directed to contact certain professionals for additional information before following the advice on the membership site.
Participation Agreement
The last policy is a group participation agreement. Some membership site owners like to include this as a section in the terms. Others will list it as a separate policy.
Many membership sites use a forum or private Facebook group for their community to continue conversations, ask questions, and share resources. If you offer this type of forum, you need to set boundaries for how people can interact. This is where your group participation agreement comes into play. Having rules that outline what is and isn’t acceptable means everyone is on a level playing field and is clear on any expectations.
Most frequently, this policy will include guidelines on how the members are expected to behave. While it may feel like you shouldn’t have to tell people to be nice and respectful, we’ve all seen where things can go sideways online. I recommend outlining exactly what you don’t want to happen. This might include no disparaging remarks, no hate speech based on race, gender, sexual orientation, etc.
Depending on the content you expect in your community, you may want to include other guidelines. For example, is there a chance people will share sensitive information that they don’t want shared outside of the community? If so, do you prohibit screenshots and ask members to keep information confidential? This may be something you want to include in a group participation agreement.
I do believe it is extremely important for you, as the membership site owner, to reserve the right to remove someone if they are not acting in accordance with the guidelines you have set. Also, provide an email where members can reach out and report any violations that they may encounter. Hopefully you will never need to enforce this, but it can help simplify the process for you to have the boundaries firmly established within the policy.
Action Steps
That’s the last policy, so now let’s talk about action steps.
- First, if you have a membership site, have you had any ongoing issues with your members? Is there a way for you to amend your terms to address these concerns?
- Next, do your membership terms and conditions have everything you need to protect your business? If not, this may be something to revisit.
- Next, if you need terms and conditions for your membership site, we do offer a template in the Businessese shop. I’ll link it in the show notes. Additionally, if you need terms, plus a privacy policy and disclaimer, we also have a bundle where you can save by buying all three templates together.
- And, last, as always, if you don’t want to DIY the legal for your membership site, but you need these important policies, please reach out to a lawyer. If you are interested in discussing this further, I often work with membership site owners through my firm Liss Legal. If you’d like more information, check out lisslegal.com.
Thanks for joining me for today’s episode on legal for membership sites.
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