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Can central station demand exclusivity
November 10, 2021
Can central station demand exclusivity
          We  have been using a central station for several years and they just sent us a Dealer Contract to sign.  I was surprised that the contract requires that put all of our accounts in this central station.  We already have some accounts at another central station.  Is this a common and reasonable requirement and do we have much choice?  The central station basically said take it or leave it.
          A central station can certainly demand exclusivity, requiring that all of your accounts be programmed to its central station.  The real question is should a central station make such a demand, is it common, is it reasonable and what can you do about it?
          There may be circumstances when exclusivity is warranted, expected and required by a central station in its dealer contract.  For instance, the central station may have offered a steep discount off its customary monitoring rates or it may have offered free months or even an outright forgivable loan to the dealer.  That kind of consideration would warrant something more from the dealer and the central station would have a right to stipulate what that consideration should be.  If the dealer wants the perks it has to accept the terms.
          But negotiated terms is one thing, fine print in the central station’s dealer agreement with one way bargain is another.  If a dealer is paying customary rates without any perks or breaks a central station should have a difficult time justifying a demand for exclusivity.  More likely a large dealer will promise a large number of accounts, either all at once or over a period of time, get a discount in price or other perk, all with the understanding that the central station will be the exclusive monitoring provider, at least until a minimum number of accounts are met. 
          Absent special circumstances I don’t think it’s reasonable for a central station to demand exclusivity.  If a dealer is so small that a central station is prepared to say “all or nothing” then the dealer probably doesn’t have enough accounts for the central station to care if it stays or leaves.  That sounds like bad business judgment by the central station, especially when there are plenty of competitor central stations prepared to be reasonable, even for a smaller sized dealer.
          There are a bunch of other provisions that a dealer needs to be careful about and I think every one of them is addressed in the Rider to Central Station Dealer Agreement.  When a dealer calls me to discuss or get involved with a central station dealer agreement my advice is almost always, “just get the Rider to the dealer agreement”.  The Rider will smooth out all of the provisions in the dealer agreement that you shouldn’t like and shouldn’t agree to, absent a very good reason.  Even if the central station will not acquiesce to all of the Rider terms at least you will be much aware of what the central station is not agreeing to change and what you are now being asked to agree and commit to.  Then you can exercise your ultimate choice, finding another central station that may be more reasonable.  If you are on that search start with The Alarm Exchange where you may find it easier to negotiate your monitoring deal. 

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301