Imagine shooting yourself in the foot. Intentionally.

Imagine signing a blank check and handing it to someone you barely know.

Imagine rendering yourself powerless to negotiate the best deal possible.

Now imagine we call that a "Developer Agreement" or a "Letter of Intent".

Anyone truly serious about opening a laser tag facility should never purposely give up any leverage when shopping around during the research stage.

Letter of Intents or Developer Agreements are desired by laser tag companies to remove you from the marketplace. By signing a Letter of Intent or a Developer Agreement, you may effectively be giving up any right to comparison shop. The laser tag companies that promote the use of such agreements do so by providing the illusion of perfect assistance. The manufacturer will entice you to sign these documents by claiming to provide you materials to aid in your start up stage.

Further, the laser tag manufacturer will dangle the carrot of protective territory. This provides false hope to you because the agreement may allow only you to develop in that area but it doesn't stop any other person from choosing one of the many competing laser tag manufacturers equipment. So you give up your negotiating strength AND you can still have competition.

A different aspect of the Letter of Intent or Developer Agreement is that the manufacturer who is trying to part you from your wallet will offer you "industry numbers" but that is misleading. The numbers provided by the manufacturer may be representative of their operators but it would not actually be true "industry numbers" based on surveys conducted by an organization such as the International Laser Tag Association comprised of laser tag operators and developers and free from manufacturers influence.

Banks and lenders treat numbers and information supplied by a manufacturer to whom you are now pledged to give tens of thousands, if not hundreds of thousands of dollars, as suspect and not believable. Since the manufacturer has a substantial profit motive, the banker will generally ignore the "information" since they realize it is just propaganda.

Finance firms and lending institutions want you to have true, accurate and factual information before they give you any money. While some manufacturers can supply numbers based on their specific operations, it is not always representative of the industry.

Further, if a manufacturer only has one corporate location, then those numbers are most likely not representative of the industry.

It is ironic that a manufacturer in the mid-west promotes their business plan kit for $500 but fails to tell you that they have closed both of their corporate stores. Why would anyone purchase a Letter of Intent from a manufacturer that has closed both of their locations? Another manufacturer that has one location never mentions that their corporate stores run by and managed by their staff have ceased operating or switch to a competitors brand of equipment. Yet both of these companies want you to take their numbers as gospel and to deny you the ability to competitively shop while doing your research.

What if you want have already made the mistake and signed a Letter of Intent or Developer Agreement? If you have signed a Letter of Intent, see if the $500 fee is non-refundable. If the Letter of Intent does not specifically state that the fee is non-refundable, inform the manufacturer that you want your money back and if that doesn't work, call your credit card company and dispute the charge, if possible. If that fails, please notify the ILTA and we will ask the manufacturer to refund your money or we will publicly include the event in an upcoming newsletter.

If you have signed a Developer Agreement and realized what a stupid mistake that was based on the realities of the industry, then again send a notice to the manufacturer that you want your Developer Agreement rendered null and void. Should that fail (and based on the arrogance of that manufacturer it probably will fail), then contact the ILTA and we will ask that your Developer Agreement be rescinded or we will include the event in the upcoming newsletter. Don't be surprised if the manufacturer sends you a letter from the lawyer browbeating you into accepting the Developer Agreement or risk having legal action. Send that letter to the ILTA and we will add it to our collection of similar documents.

If a manufacturer doesn't let you out of a Letter of Intent or a Developer Agreement, inform the company representative that if you are forced to purchase the equipment because of the Letter of Intent or the Developer Agreement that you will tell every possible future owner of the horrible, bullying, arrogant and distasteful way you were forced into the purchase. If the manufacturer has a conference, plan to attend every conference and inform all future buyers of how you had been intimidated into honoring a document that forces you to buy an inferior product compared to the choice of whatever other laser tag equipment you would rather purchase. In fact, become evangelistic for that other manufacturer and sing their praises to prospects and watch how fast the laser tag manufacturer will wish that they had not forced you to honor the document. Once your facility opens and has a website, place links to your manufacturers' competitors.

Should you ever sign a Letter of Intent? Yes, in certain cases. After you have conducted all of your due diligence and after you have started negotiations, regarding payment terms and number of packs. Once you are confident of your vendor selection, then you may want to sign the Letter of Intent. Often this will open various resources that the manufacturer has available such as marketing materials; operator conferences; arena design assistance and more.

In conclusion, Letter of Intents and Developer Agreements are useful tools after you have conducted all of your due diligence and your research. There is no value in limiting your options so early in the research stage.