comments on how to handle access control tie-in to fire alarm system / How much can you expect to get for your alarm contracts July 7, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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comments on how to handle access control tie-in to fire alarm system / How much can you expect to get for your alarm contracts
July 7, 2018
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comment on how to handle access control tie-in to fire alarm system from June 29, 2018 article
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Ken
               Regarding your comments to the person questioning their responsibility and your agreement regarding the locking systems release by the fire alarm system, I do not agree that what you stated is adequate.   The Building Code addresses several requirements on this as well as the NFPA that include the release of doors after a specific period of time when electrical power is lost, not allowing the backup batteries to keep the system intact.   I do believe that there must be some notification with documentation, discussion and an attempted meeting with the fire alarm system vendor take place to insure that the proper interface is done and the operation, after completed, is confirmed to work.  Just putting the system out there and stating it is the responsibility of others to this is not the solution, if so the same would apply to elevator recall as well. 
                 A fire alarm system vendor or other trade vendor just by not being involved and by saying so in their contract it's not our problem does not absolve them from a responsibility/problem when the fire alarm inspection fails and he owner gets a summons with a fine.   There is a safety issue here as well when those locked doors do not release when the fire alarm system is active.   Go explain after the fact that I thought that others took care of what was needed and my contract stated it is not my problem.   Passing the buck is not the answer as it is being attempted to be done here.   By contacting the fire alarm vendor instead of making excuses is all that is needed accomplish what has to be.  
                Things are only as complicated as you make them.
anon
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Response
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               You should have read my response a little more carefully.  In fact I did caution the Access Contract vendor not to make the connection to the fire alarm.  The Access Control vendor needs to make it very clear in its contract that it will not be making the connection to the fire alarm and that the connection needs to be made by the Fire Alarm vendor.
               I am not sure how the connection is made or if it's so simple that the Access Control vendor can do it.  But if it can't, the contract needs to provide for the Fire Alarm vendor to make the connection.
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comment on How much can you expect to get for your alarm contracts from June 30, 2018 article
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Ken
               What is this constant fixation with the worth of a business?   All these vultures that act as brokers constantly state things that are not included, such as the firm's assets like vehicles, office equipment, inventory plus a lot more, but that is never included in the equation; or is it?   If someone is retiring they are not just looking to sell off accounts but want to sell the whole ball of wax.   That is never discussed.  
                As far as this AES radio sales limitations and owning your own telephone lines as are a constantly stated item, central stations do not just provide lines to a startup firm or a firm that does not have a specified amount of accounts unless you are paying a premium to get this.   Alarm receives have limitations for incoming lines and they are not just given out.   What is the problem with leaving the AES radio monitoring where it is if you do not have the ability to monitor it?   Any firm that buys accounts will do what is needed to reprogram accounts and if not there are plenty of firms out there that are account hungry that will and still pay the price.   Just look as your listings on The Alarm Exchange and I know of them as well.  
                In the case of NYC fire alarm accounts, you cannot just move them without going through a whole involved procedure and making a payment and only if your central station is approve to monitor them.
name withheld
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Response
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               Anyone who owns an alarm business, or any business for that matter, is, and should be, acutely aware of what that business is worth and which direction it is heading at any one time.  If you don't have your eye on that ball then you don't belong in the business.  If you want to run your business like a public service then maybe you should get a job in public service instead of operating a private business. 
                Most alarm companies are valued, and sold, based on the Recurring Monthly Revenue under contract.  Along with the contracts the “good will” is included in the calculation for that RMR.  You are correct that those involved in the merger and acquisition business [or practice for us lawyers] don’t often mention that certain hard assets will be valued and added to the purchase price.  Typically, vehicles and inventory will increase the purchase price.  Jobs in progress will need to be adjusted; sometimes accounts receivables.  Sometimes the alarm company being sold has other non-traditional alarm operations; maybe a locksmith business on the side; maybe it sells alarm stickers or has a website that sells DIY over the Internet.  These assets and operations will be considered if the buyer wants them and add value to the sale price.  I can’t say that these considerations are common, but they aren’t uncommon either.  In other words, they do come up regularly enough.  Sometimes if these other assets are minimal they will be included in the RMR calculation and it may be difficult to figure out how a buyer has valued them.  So a buyer may offer 38 times and say that number includes the kitchen sink.  Further discussion will reveal that the buyer has carefully evaluated these additional hard and other assets and decided what value they have to the buyer, which may be quite different than the seller’s perspective of the value. 
               What you should be cognizant of is that there are professionals who can help you evaluate and structure your sale, or your purchase.  You will find an extensive list on The Alarm Exchange under the broker category and you may find some buying or selling opportunities under the Merger and Acquisition category on The Alarm Exchange.  Self-serving as it may seem, you need to engage counsel early in the process.  In fact, counsel should be the first professional consulted and engaged.  Next week I am going to start a series on the forms and documents that you will need to be familiar with when you sell or buy a business.  The first document, agreement, will require that you have an experienced attorney review it and guide you if it needs changes.  If you don’t then you will be presented with documents and told “this is how we do it, and if you don’t like it then good-bye”.  Unless you’re selling or buying a pig in a poke [The English colloquialisms, such as, turn out to be a pig in a poke or buy a pig in a poke, mean that something is sold or bought without the buyer knowing its true nature or value, especially when buying without inspecting the item beforehand.] you need to be careful and you need counsel to review everything every step of the way.  That will be all the more apparent to you, after the fact, when problems arise and the attorney you engaged has 1) no idea how to handle it, or 2) no intention of helping you because that deal is done and he or she is on to the next one.  Call the Merger and Acquisition team at Kirschenbaum & Kirschenbaum first thing.  We will guide you through the entire transaction and be there for you before, during and after the transaction.  Call me any time, or if you want someone more sophisticated, call Jennifer Kirschenbaum,Esq at 516 747 6700 x 302 [she heads our Transactional Department].
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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
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com