Legal Considerations if Your Startup Has Brand Ambassadors

Startups frequently turn to brand ambassadors and influencers to establish their brand’s presence and reach. Brand ambassadors and influencers tend to be influential figures whose target audience aligns with your brand’s. They can take on various roles. For example, they could create content discussing your startup’s products and services online, promote your brand at relevant events or be involved in marketing materials. Their promotions can be a great way to advertise your startup and reach your target market. As a founder, it is vital to maintain an awareness of best practices and the implications of using brand ambassadors to mitigate the risk of legal disputes. This article will explain key legal considerations for startups using brand ambassadors to promote their business. 

1. Due Diligence 

Before engaging a brand ambassador or influencer for your startup, it is crucial to conduct due diligence. This is an important step to make sure that a potential candidate aligns with your startup’s values. Additionally, it ensures that sharing a relationship with them will not damage your brand’s reputation. 

Your due diligence will involve thorough research into aspects such as:

• content they have previously shared online;
• brands they have worked with; 
• their background; and
• their overall online presence.

For instance, if you have a sustainable fashion startup, you might scrutinise an influencer’s previous affiliations with fast fashion brands that adopt harmful environmental practices. Conducting due diligence can help prevent the risk of brand ambassadors and influencers damaging your brand’s reputation. Also, it will allow you to maintain the integrity of your company’s growing image. 

2. Contractual Agreements 

As with any business relationship, contracts are critical. They play a crucial role in protecting your business’s reputation and mitigating the risk of future disputes. Clear agreements can help alleviate any risk of misunderstanding. They will explicitly detail how the relationship between your startup and the influencers and ambassadors will work. 

It is essential that you clearly lay out aspects such as:

• expectations;
• the fee structure;  
• the duration of the arrangement;
• your startup’s roles and responsibilities relating to the ambassador; 
• exclusivity (whether or not the ambassador can promote other brand’s similar products or services);
• the scope of their role; and
• termination and confidentiality clauses. 

Suppose there are certain pieces of information relating to your startup that are secret, but you want to share with the brand ambassador. In this case, you should consider drafting a non-disclosure agreement. This type of agreement can prevent them from disclosing specific details and allow you to seek a legal resolution if they do. 

Influencer agreements typically have a shorter duration and involve different activities. They will look similar to a brand ambassador contract but stipulate different roles and expectations. A lawyer can help you draft these agreements and ensure that you protect your growing brand. 

3. Advertising

You should explicitly outline what ambassadors and influencers can and cannot do regarding advertising. Doing so can minimise the risk of misleading advertising practices. 

You should ensure your brand ambassadors and any influencers you engage adhere to the advertising standards set by regulatory bodies such as the Advertising Standards Authority (ASA). For example, they should clearly state that they are promoting products in exchange for compensation or that your brand has gifted products. 

By incorporating clear advertising guidelines into your agreements, you can establish a framework for responsible promotional practices and ensure consistency across all ambassador-driven campaigns. For example, you might state that an influencer or ambassador shall not make unsubstantiated claims about the quality or benefits of the products or services they endorse. They must only make factual, accurate and substantiated statements. This clause would help uphold your startup’s integrity and protect consumers from potential misinformation. 

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Key Takeaways

Brand ambassadors can be valuable assets for startups seeking to enhance their brand’s visibility. If you want to use brand ambassadors and influencers to promote your startup, there are some legal considerations you should think about before you begin. These include: 

• conducting due diligence to ensure a potential ambassador aligns with your brand; 
• drafting robust brand ambassador contracts and influencer agreements; and
• setting out clear and compliant advertising guidelines. 

Your business’s relationship with ambassadors will likely be long-term and include:

• continued involvement in marketing campaigns and promotions;
• engagement with your brand at events; and 
• social media content creation. 

Influencers can also be a great way to promote a startup. You might engage an influencer to create content advertising your startup’s products and services. Influencer marketing is similar to using brand ambassadors. However, the contractual relationship will likely have a much shorter duration. It might involve several social media posts rather than a long-term promotional relationship. 

If you would like legal advice about using brand ambassadors to promote your startup, our experienced startup lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.