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Hydrate — Distributor Offer & Node Playbook (v1 · for pitch + counsel)

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Hydrate
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Hydrate — Distributor Offer & Node Playbook (v1)

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Working draft for Daniel's pitch calls and counsel review. Pricing marked RECOMMENDED is Ora's pass on Daniel's numbers; nothing here is legal advice — securities AND franchise counsel review required before the first signed distributor.

The pitch in one breath

"You run the water — the thing you're already great at. We hand you the entire technology company you'd otherwise have to build: the app, ordering, subscriptions, checkout, an AI concierge, regional SEO, and a marketplace that sends you demand. Free website, all your tech managed. We take 4% on transactions."

Hydrate Core — 4% platform fee on GMV (additive to Stripe processing ~2.9% + 30¢)

Includes: the Hydrate app skinned for their region, commerce + subscriptions, concierge, region SEO/sitemap/insights, hosting, updates, waitlist demand routing. All-in ≈ 6.9–7% — framed against Square (≈2.9% but zero site/ops) + a web agency ($1–3k/mo) + a dev on call, it's the cheap option.

Founding-node lever: 3% locked for life for the first 10 regions — urgency on the call, cheap for us at this scale.

Hands-On — $1,500/mo or $10,000/yr (-$8,000 annual discount)

Monthly strategy call, hands-on development queue, priority ops. Positioned as "your fractional CTO + dev team."

Pushback (asked for it, here it is)

  1. Kill the "10% of revenue" option. Adverse selection both directions: big nodes will never sign it ($30k/mo node → $3k/mo), tiny nodes underpay you for real hands-on work. It forces book-sharing and audit friction into a relationship that should feel light, and revenue-share + brand + prescribed system is exactly the fact pattern that walks toward franchise law. Flat fee keeps it clean.

  2. $10k/yr is too deep a discount against $1,500/mo (that's 44% off). Standard is 15–20% → $15k/yr. If you love $10k, make it a Founding Cohort price, capped at the first 5 hands-on nodes, publicly time-boxed.

  3. Drop the fundraising-rebate from the commercial package entirely. The shape — prepay for services, credited into a future financing round — functions like a convertible instrument: money in now, expected participation in future equity upside from the company's efforts. That's the classic investment-contract pattern (Howey), and phrasing carefully doesn't change what it functionally is; offering it on open sales calls is general solicitation, which poisons the common exemptions. The clean structure: sell services for money; sell equity separately — accredited investors, proper instruments (SAFE/priced round) under a real exemption, with counsel, never mentioned in the same contract or call as the services deal. Prepay incentives that ARE clean: service credits, fee holidays, lifetime rate locks, Founding Node status.

  4. The quieter landmine is franchise law, not securities. "Join our system, use our brand, follow our processes, pay us ongoing fees" is the FTC Franchise Rule's definitional zone (plus state acts — MA included). Structure the distributor agreement as a technology license + marketplace services agreement, have franchise counsel bless it, and be deliberate about how much brand/process control we mandate vs. offer.

  5. Small one: the waitlist promises "one text when live" — keep express-consent language on the form (it's there) and honor single-use. TCPA is cheap to respect and expensive to ignore.

How a node plugs in (the operating model)

Now (live today): a node = a Space on The Cloud. Catalog = the node's table (SKU matrix + prices, editable in place, price changes reflect on the live storefront without code). Leads = the two Cloud Forms straight to the operator's inbox. Ops changes (hours, prices, coverage towns, copy) = Ora executes same-day. This IS the interim console — white-glove, and honestly part of what the 4% buys.

Next (filed with builders, MEMO §5): distributor-as-tenant onboarding — new region = new Space + config, no code; per-node dashboards (telemetry §8), demand tally, payment account binding per node, member sync.

The call list starts with: regional water companies that already fill/purify/deliver — the Fresh Water Daily profile, replicated. The distributor form is live: https://www.thecloud.so/f/bk3lholv

Unit math sanity check

$20k/mo GMV node → Core fee $800/mo to Hydrate, node keeps Square-class processing they'd pay anyway, saves agency + dev spend. 25 nodes at that size → $20k/mo platform revenue before Hands-On tiers. Hands-On at 40% attach on 25 nodes → +$15k/mo. This is a real business at two dozen regions — without touching a single fundraising-linked instrument.

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