Jaime said we should make a deal and move on. She's right. So instead of another round of numbers going back and forth, we wrote down the whole thing: what we proposed, why you pushed back, what we think you got right, and the deal that falls out of taking your own argument seriously. Read it in order. Each step is checkable.
| Term | Proposal |
|---|---|
| Residential revenue to HLC | 10%, flat and guaranteed — no bonus formulas, nothing to reconcile later |
| Phoenix commercial revenue to HLC | 45% (existing Desert Ridge program and The Phoenician) |
| Marriott expansion, DR build-out, Lightborne | Billed as separate projects: customer deposits pay for the product, and BN invoices HLC for its labor, shop work, and travel |
| Term | One year; year two set by mutual agreement from actual season data |
| Cash custody | All revenue to HLC's account; BN's share remits automatically at each collection trigger (45/45 on residential, 27.5/27.5 on commercial), per Craig's memo |
| Settle-up | Two-sided reconciliation, including a one-time $30K sales-assist fee to BN |
Our first proposal was simple: 20% of gross to us, you run everything. You came back at 15 and gave reasons — new crews, a book you haven't run, small jobs, locked pricing, an El Niño year, liability, a warehouse. Jaime put it plainly: your risk is just higher.
We think that argument is mostly right, so this proposal accepts it and prices the two halves of the book accordingly.
Before that, the list of what we're simply accepting, as you wrote it:
That's most of your counter. What's left is one question: what's the right price for each half of this book? Which turns out to have an answer you already know, because you set it yourselves, every season, in your own commission plan.
You pay a sales rep 10% for showing up with a customer. We're showing up with the customers, the product, the trucks, and the crew.
Brite Nites pays seasonal reps 4–5% on new sales. When a rep generates the lead himself, you pay 10%. You set that number yourselves: 10% of revenue for bringing a customer to the door. The rep brings no product, no equipment, no crew, and no ongoing relationship. Just the name.
Now put what we're handing you next to that:
Look at what rides along with our 10% that never rides along with a rep's. The install product, mostly in hand — what we deployed last season plus new product we bought and didn't use. The trucks, leased to you below cost. Help staffing Arizona, because our field guys come back for us. And Rainer plans to personally re-engage a chunk of his own book, which means your CST team doesn't even carry the full outreach load.
A rep who brought you one self-generated customer would cost 10%. We're bringing several hundred of them, with the equipment to serve them and the people to do it. At 10% guaranteed, the question isn't whether the price is fair to you. It's whether we've underpriced it. We probably have. That's deliberate — we want this deal signed and working.
| Risk, as Jaime put it | Residential | Commercial |
|---|---|---|
| Job values well below BN's average | Yes | No — six-figure contracted programs |
| Locked into discounted pricing, no levers | Yes | No — we set these prices ourselves, with agreed caps |
| El Niño year, maintenance calls all season | Yes | No — scheduled install and strike |
| Will the book re-engage at all | Yes | No — it's under contract |
| Warehouse and staging costs | Yes | Minimal — on-site, product ships direct |
| Liability on Phoenix jobs | Yes | Partly — hotel-work insurance is real |
Six risks, and five and a half of them live in the residential book. That's the whole structural argument of this proposal, and it's your argument. We're just refusing to let it stop halfway.
Two of those risks — low job values and locked pricing — have a fix nobody's mentioned. If some slice of our book genuinely doesn't clear your bar, don't re-engage it. Let's run the numbers together, set a job-value floor we both sign off on, and let the tail go. We'd rather own a slightly smaller book that you service enthusiastically than a bigger one you resent.
And on pricing: tell us the room you want. Rules we agree on, a cap on increases for existing customers, new customers priced however you like. Our share is a percent of gross, so when you price well, we both make more. We have no reason to hold you down.
One more fact that shrinks this risk on its own. We expect 30–40% of this season's book to be new customers, and every one of them gets priced at Brite Nites standards from the first quote. So the "locked pricing" problem only ever applied to part of the book, and that part gets smaller every season.
With the tail trimmed, new customers at your pricing, and latitude on the rest, the two risks you leaned on hardest mostly disappear. What's left is a residential book at 10% that your own commission plan says is worth 10% before we add a single truck.
Your risk list is what proves this. None of it describes Desert Ridge or the Phoenician. That work is under contract at prices we set ourselves, installed and taken down on a schedule, and the relationship runs through Rainer end to end — he sold it, he manages the client, and he manages the install itself. It looks much less like your residential operation and much more like the Tiyuanu project we just did together: our program, your labor.
Walk through what operating the existing $400K Desert Ridge program actually costs you. The product is already there — no new buy. The install is a known quantity we've run for years. Rainer holds the relationship and runs the project. Your real cost is direct install and strike labor, plus payroll taxes and workers' comp on that labor. Last year the direct labor ran well under $50K.
Put it in market terms: if we took just the labor scope to any competent install subcontractor, we'd expect the whole job done for something like $100K. Under this proposal you collect about $264K for that scope — 55% of the book. A subcontractor doing the same labor would see a fraction of that. The difference is what the partnership is worth, and we're glad to pay it. But it helps both of us to know what the work itself costs on the open market, the same way your commission plan tells us what a customer costs.
Scope, so nobody's surprised: the 45/55 covers existing Desert Ridge and the Phoenician, and nothing else. The Gaylord properties — Rockies, National, Pacific, and Hill Country when it lands in 2027 — plus this year's Desert Ridge build-out and Lightborne are handled as separate projects, outside the percentage split. On those, the customer's deposits pay for the product, and you invoice us for your labor, your shop work, and your travel. You put up no money and take no risk; you get paid for the work you do. National deals you source stay yours entirely. And the settle-up includes a one-time $30K sales-assist fee to you for your team's help closing the Gaylords, unprompted, because paying fairly for help we used is the standard we're applying to everything here.
The 10% and the 45% are one package. Neither number is on the table alone.
Craig told you he wouldn't do this structure under 10–15% to HLC. We're taking the bottom of his range. Flat. In a soft season — the one your risk list describes — you keep 90 cents of every residential dollar. That's more protection than you asked for, and we're giving it on purpose: if the season goes sideways, you were the one carrying the risk, and the cushion should be yours.
We considered a performance bump — an earn-back to 12 tied to season revenue — and decided against it. Dean's counter had a bonus keyed to BN's net margin meeting a threshold, and that had the same flaw in reverse: someone's bonus riding on numbers the other side computes. Every trigger needs a definition, every definition needs a measurement, and every measurement is a future argument. Your section 1 said it best: one observable number, no true-ups, no audits between us. So that's the deal. Ten percent, read straight off the bank account, season after season.
It also makes year two honest. When we sit down next spring with a real season of data, neither of us will be untangling what a bonus formula did or didn't pay. One number in, one number out.
Craig's memo is blunt: all revenue lands in HLC's account first, then the split remits — "no exception" — and HLC keeps its own records. That's what the contract says. Brite Base still runs invoicing in HLC's name, your share transfers automatically within three business days of each collection trigger, and the monthly report backs the $500 fee. On Tyler: he gets everything the day we sign. Until then the books and receivables stay where they are. We just want the rate settled before anything starts moving, and once it is, the setup he builds follows Craig's design anyway.
Four lines that just write down what your counter already promises. Outreach to our customer list starts within 10 business days of signing. Our customers get contacted in every wave of outreach, at least in proportion to their share of the combined list, and worked to the same standard as your own accounts. Twice a month in season, Brite Base reports outreach, re-bookings, and responses. Everything gets measured against the signed customer list, not anyone's summaries. And one backstop: if outreach hasn't started by October 15, we may run our own outreach and bill you the documented cost.
The simple version: we split the Phoenix marketing costs down the middle, and if we ever part ways, we split the new customers that marketing brought in — half and half, by a method we agree on up front. What each side brought into the deal stays where it started. Our Day 1 customer list stays ours. National deals you source stay yours, with Rainer selling them for you on a standard BN sales plan. And the Marriott contract came before this deal and stays in HLC's name, so the draft line that says "expansions and national deals are BN's in all cases" needs to come out — as written it would swallow a contract that was never BN's.
One year. No auto-renewal. Year two is a fresh agreement, rates included, set the way Jaime framed it: from a full season of real data instead of projections. If either side doesn't like what the data says, the book, the records, and the crews revert per the agreement and we part clean. We think the data will make year two an easy conversation.
We're ready to close. — Rainer & Holden