I have a response to the GR's question that read : 
    "We acquired a company that had been using your All in One Contracts.  One of the customers, a large school district, canceled midway into a yearly renewal term.  When we contacted the customer to make good on the remainder of the contract they informed us that their attorney said that automatic renewal contracts are not legal in Colorado?"  
    Excellent response (as usual) from Ken regarding the legal aspects of the agreement; now for my humble take on the business aspects of a Buyer getting into this situation in the first place.  When performing due diligence we run into agreements like this in nearly every transaction.  When we encounter contracts with governmental or institutional customers, and even property management firms, we strongly encourage the Buyer and Seller meet with the customer ahead of the closing and determine their willingness to continue on in the agreement. Most of the time, the customer asks some questions and gives us some assurance that they will continue on, very important when paying 40x or more for a year to year contract.  It is also not uncommon for a successful Fire Alarm or Systems Integration company to have $20,000 or more RMR from this type of customer (many times concentrated in a handful of actual customers).   Even if GR was able to enforce the contract, the customer doesn't appear to be in the game for a longer term than the multiple that he paid. 
    This is one of many reasons why it is important to retain an experienced transactional team (including Ken's group) when entering into a transaction. 
Mitch Reitman
Reitman Consulting Group
Fort Worth, TX 76133
    Too often buyers rush into a purchase without giving enough consideration to the composition of the seller's subscriber base.  Not always of course, especially when the buyer is sophisticated in acquisition deals, but the buyer who makes one or a few purchases may not give enough thought to this issue.  It's not just a select group of subscribers who make up a disproportionate part of the RMR, rather, it's the type of subscribers.  A buyer with a primarily commercial subscriber base may not be successful in acquiring a seller's residential subscriber base.  I've even had deals where the seller had many accounts that required a "cash" pick up each month.  While that may seem like the kind of problem you'd like to have, the buyer didn't want to continue that practice and the loss of accounts during the gurantee period became an issue.  [yes, you guessed it, I agreed to make the pick ups]  [only kidding].  
    Sometimes it's the personal relationship between the seller and the subscriber that's essential for the larger accounts.  This is when modification of the typical guarantee language may be appropriate.
    Growth by acquisiton is another topic that needs careful consideration, especially now that financial companies, using other people's money, have entered the industry and compete for the deals.  

     Our Alarm Acquisitions & Sales Department assists alarm companies throughout the country with company acquisitions and sales, company valuations, and provide expert consultation on how to maximize the value of your alarm company.  For assistance contact Jesse Kirschenbaum, Esq. at (516) 747-6700 x. 317 or Jesse@Kirschenbaumesq.com.