KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** What’s better, long-time customer or long term contract October 18 2022 ******************* What’s better, long-time customer or long term contract ******************* Ken Our initial contract is 3-years and renews month to month. Would you say a term contract more important than a long-time customer? Jason ********************* Response ********************* I’d say that both issues are important. Nothing beats a long term customer. Since your contract renews month to month after the initial term, whatever that term may be – in your case three years – your contract with the customer is essentially terminable at will on 30 day notice. While you operate your company you may not really care since the customer is long term and expected to stay with you. However, when you decide to sell your accounts a potential buyer is not likely to have the same comfort level with this customer and all the other ones in similar contractual status. You can expect a lower multiple or a longer guarantee period. Potential buyers don’t typically look at and price each contract, but the multiple ultimately offered will blend the accounts so that if all are month to month as opposed to term contracts you can expect a different multiple. Of course the character of the account and the customer is an important consideration when valuing the account portfolio. Bottom line, long term customers are the best, but it’s also a good idea to keep them in term contracts and you do that by getting new contracts signed as the older ones terminate. ******************* To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
