Kickfurther’s Consignment Arrangement
Kickfurther operates as a consignment arrangement, which is why we have Consignment Opportunities or “Co-Ops.” Since Kickfurther is a consignment arrangement between our community of buyers and the business, payment is only due if one of the consigned items associated with the Co-Op is sold.
Our billing structure to businesses requires the business to report on the number of items sold and that is measured against their payment timeline and sales projections. We refer to this report as a sales report. For instance, if a business reports zero units sold for a particular Co-Op item, then contractually nothing is due for that item in the correlating payment period. Kickfurther tries to verify the reported number of units on hand with inventory inspections and with getting access and logging into the business’s inventory management system.
If a business fails to submit a sales report, provide the subsequent payment due, or fails to sell inventory as expected, then the business will be labeled as “flagged” on Kickfurther. Once a business is labeled flagged, buyers will see the option to vote to cancel the Co-Op (the Cancellation Vote). During this period, Buyers can expect that the Kickfurther team is attempting to make weekly contact with the business for a sales update or a good faith payment.
On Kickfurther, businesses are expected to post an update to their Buyers once every thirty days. Please note that once flagged, the expectation changes and businesses are expected to provide a Buyer update every two weeks instead. Kickfurther will charge the business a fee for every missed update.
Buyers should only cast their cancellation vote if they have lost faith in the business’s ability to complete the Co-Op within a timeframe that they deem is reasonable. Sometimes the business will need more time to complete the Co-Op, and the business will communicate a plan for completion to the Buyers as an update.
There are instances where the business will stop posting updates altogether. Buyers have the option of casting their vote and retracting their vote up until the point the Cancellation Vote surpasses 50%. Each Buyer’s vote is weighted by the amount of inventory that users purchased with regard to the Co-Op.
If the vote to cancel the Co-Op surpasses 50%, then the Co-Op is considered “Cancelled” and will be subjected to Kickfurther’s cancellation policy. Kickfurther notifies the business of the cancellation with a formal cancellation notice, and in the notice gives the business several options to remedy the Co-Op within 15 days of the cancellation (the “cure period”).
The business’s options during the cure period are to pay all amounts outstanding, send Kickfurther the remaining inventory associated with the Co-Op (and pay any monetary balance owed not covered by the return of inventory), or propose a payment plan and settlement agreement for the balance that may remain which must be accepted by Buyers. If the business does not respond to the cancellation notice accordingly, then Kickfurther will place the entire balance due with a professional collection agency.
Sometimes businesses will propose a settlement agreement to present to the Buyers of the Co-Op. As a neutral marketplace, Kickfurther feels obligated to present all proposals to the Buyers regardless of whether the proposal is “acceptable” or not. When Kickfurther receives the settlement proposal, we will present the voting options to the Buyers via a Google Form for them to vote upon. Settlement votes generally include options to (a) accept the settlement proposal, (b) place the balance with a collection agency, or (c) elect a “lead buyer” to try to negotiate a better settlement. Results are weighted by each Buyer’s ownership in the Co-Op using a ranked choice voting methodology. Each of the options are elaborated upon below.
In the settlement vote, one option for Buyers is to accept the settlement proposed by the business. Kickfurther operates as a neutral marketplace, so Kickfurther will generally present all settlement proposals to the buyers no matter if it is a “good” offer or not. Choosing this option will not negate any personal guarantees associated with the Co-Op in case the business does not end up following through with their proposal, unless the buyers specifically vote to accept a settlement that outlines dismantling the PG as part of the agreement even if the business does not pay.
Another option in the settlement vote is to place the balance with a collection agency. Generally, collection agencies will try to collect the balance due on the Co-Op plus their fee from the business and also the business owner, if there is a personal guarantee associated with the Co-Op. Some possible outcomes that may occur are (a) the collection agency may decide to take legal action against the business and/or the signor of the personal guarantee, (b) the collection agency may negotiate a payment plan directly with the business owner or business, (c) the collection agency may secure a settlement proposal from the business or business owner which will be put to vote, or (d) the collection agency may decide to close the account if recovery does not seem likely.
Also included in the settlement vote is the option for buyers to elect a “lead buyer” to try to negotiate a better settlement offer from the business. Kickfurther will elect at least one of the larger Buyers from the Co-Op and connect the lead buyer(s) with the business owner directly. The lead buyer(s) will talk with the business to try to get a different settlement offer. If a new settlement offer is established, then Kickfurther will present the new settlement offer to the Buyers of the Co-Op in a new settlement vote.
Timeline of Settlement Vote
Buyers can expect that Kickfurther has given the business owner 15 days upon the cancellation to present Kickfurther with a settlement proposal or the balance/inventory due. This time may be extended if good faith efforts are being made to provide a resolution. If Kickfurther receives a settlement vote proposal from the business, Buyers can expect an email from Kickfurther containing the voting options outlined in a Google Form along with a deadline to cast their vote within seven business days of the vote launching.
Defaulting on the Settlement Payment Plan
Kickfurther has an internal collection team that works with the business to track their settlement payment schedules to help ensure that the business provides their settlement payments on time.
Kickfurther gives the business a buffer of 15 days to provide payment if the payment is missed. If the business does not provide their settlement payment within the 15 day cure period window, then Kickfurther retains the right on behalf of the buyers to place the entire Co-Op balance plus any accumulated late fees and missed update fees with a collection agency. If there is a personal guarantee (PG) associated with the Co-Op, then Kickfurther will also place the individual that signed the personal guarantee with the collection agency as well.
Accepting a settlement agreement does not usually negate the PG associated with the Co-Op unless the buyers had voted to accept a settlement agreement that specified a nullification of the PG no matter if the business does or does not make payment. The collection agency has the discretion to pursue a lawsuit against the signer of the PG if a lawsuit seems to be a viable means to recoup funds towards the Co-Op balance. Sometimes a lawsuit is not viable if the collection agency determines that the signer of the PG does not have assets.
Before or after a Co-Op cancellation on Kickfurther, businesses can declare bankruptcy. If a business has filed a bankruptcy or Kickfurther has been provided with the information for a bankruptcy attorney for the business, Kickfurther will not automatically place the business with collections if the Co-Op is cancelled and payment is not received or a settlement plan is not accepted. This is because, upon the filing of the bankruptcy, an automatic stay is enacted which prevents the collection agency (and Kickfurther) from attempting to collect any debt owed. Accordingly, it makes little sense to agree to pay the collections agency a contingency fee on the matter for any payments received from the business when the agency isn't even able to contact the business.
Kickfurther will post an update to the Buyer Page letting the Buyers know that a vote has been emailed. Usually, Kickfurther gives Buyers seven days to submit their vote. After the votes are tallied, Buyers can expect Kickfurther to post the results of the vote and afterwards to facilitate the results of the vote.
If the Buyers vote for collections, then Kickfurther will not post regular updates to the Co-Op unless there is movement on the placement. Buyers can expect updates from Kickfurther if the agency has specific news about the account. Very often, during this status, there simply is no news to share other than that the collection agency continues to work the account to the best of their ability.
If the Buyers vote to accept the settlement proposal, then the Buyers can expect that Kickfurther is reaching out to the business to make sure they are adhering to the plan and timeline they committed to. Kickfurther or the business will post updates regularly to the Buyer Page. Buyers can expect that Kickfurther is emailing and calling the business regularly to make sure the settlement plan is on track.
If the Buyers vote to elect a lead buyer, then Kickfurther will take the time to select one or a few possible larger Buyers from the Co-Op. Kickfurther reaches out to each potential lead Buyer to see if the person is open to being the lead Buyer. Once a lead Buyer is chosen, Kickfurther will connect the business owner with the lead Buyer(s) and will help to facilitate a meeting amongst the two parties. Kickfurther will post an update to the Buyer Page once the lead Buyer is chosen and also if a new settlement offer has been established. The Buyers can expect to receive the new settlement offer via email with a posted deadline for casting the vote.
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