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Fee arrangement for programming



6:05 pm on Oct 6, 2005 (gmt 0)

10+ Year Member

I'm partnering with a programmer to produce an application that I'm going to sell. It was my idea, I'll handle the marketing and business end, and he's going to write and maintain the app. It's not a big program--might take him several weeks if he did it full time. In lieu of cash up front, he's agreed to take a percentage on sales. My question is, what's a typical or customary split on revenue for arrangements like this? Or if no one here is familiar with it, is there someplace else I might be able to find out?



9:19 pm on Oct 6, 2005 (gmt 0)

10+ Year Member

I don't think there's a "customary" split, but I'd be more concerned over the intellectual property rights; that is, who owns the application?

Assuming you're both in the U.S., in absence of a contract stating otherwise, the creator of the work owns full right to it. If you want to own it, the programmer must transfer ownership to you in writing. The fact that you're compensating him for it through a percentage of the sales does not automatically grant you ownership. If you two have a falling out, he will be able to both sell the app himself and prevent you from doing so.


10:26 pm on Oct 6, 2005 (gmt 0)

10+ Year Member

Thanks, I'm aware of the copyright issue. What he's doing is a work for hire, and a royalty arrangement, although a little unusual in such cases, doesn't automatically preclude my owning the rights. (It's not actually being referred to as a royalty.) What I'm interested in, if anyone has experience with this, is what a fair split would be, or a pointer to another source that might have some info.

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