What a good fractional CMO contract covers - scope, deliverables, IP ownership, termination, and red flags to avoid.
A fractional CMO contract should define: scope of work and deliverables, monthly retainer and payment terms, time commitment (hours per week), IP ownership (your company owns all work product), confidentiality and non-compete terms, and a 30-day termination clause for either party. Avoid contracts with vague deliverables, excessive non-solicitation clauses, or long lock-in periods without performance benchmarks.
The contract should clearly define what the fractional CMO will deliver, in what timeframe. Avoid agreements that only describe activities ('weekly strategy calls') without specifying outcomes. Good contracts include: a 90-day deliverables list, monthly reporting requirements, and the specific functions the CMO will own (demand gen, brand, content, etc.).
Specify the minimum number of hours per week or month. Most fractional CMO engagements run 10-20 hours per week. Also define: availability for leadership meetings, response time expectations, and whether they'll be accessible via Slack/Teams for quick questions. Clarity here prevents later frustration.
Include monthly retainer amount, payment due date, and any performance bonuses if applicable. Most fractional CMOs invoice net-15 or net-30. Avoid hourly arrangements - they create the wrong incentives and are harder to budget. A monthly retainer aligns both parties on outcomes over activity.
All work product created during the engagement should belong to your company. The contract should explicitly state this. Include standard NDA provisions covering your business plans, customer data, and proprietary information. Verify there are no conflicts with other clients the CMO serves.
Insist on a 30-day termination clause for both parties. This gives you flexibility if the engagement isn't working and gives the CMO time to transition. Be cautious of contracts requiring 90+ days notice or substantial cancellation fees. A good fractional CMO is confident enough in their value that they don't need lock-in clauses to retain clients.
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