Legal agreements · Partnership agreements

Are there creative alternatives to territorial exclusivity for reseller partners?

Richard Pridham Investor, President & CEO at Retina Labs

May 30th, 2017

We are a Canadian telehealth software company. We offer cloud-based solutions for the eye care sector, more specifically for chronic eye disease detection and management. Our growth strategy is to penetrate the US market and we are now starting to sign customers there. We have a hybrid go to market strategy by selling direct to end buyers (hospitals, IDNs, HMO, telehealth networks…) but we want to create a partner channel. We’re talking to a few partners in different parts of the US. But the problem is that they all want some form of exclusivity. For example, one wants California, Oregon, Washington, Hawaii and Alaska because that’s where their customer base is. But another partner also wants California and Oregon or at least the opportunity to sell into those states. Mixing partners in the same deal can get messy. Obviously I don’t want to lock myself up with one partner that may not deliver results. We can build some performance criteria into the agreement but you need to give things time given the sales cycles for our solution. That means committing to a partner for a period of time no matter what. I’m just wondering if there are other creative approaches to this problem. How can we provide some territorial protection without full exclusivity?