March 4, 2011
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Questions and comments
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Ken,
I hope you are well. Would you please explain your statement:
" I think ADT could still prevent dealers from soliciting the accounts sold to Brink/Broadview, but that’s because the law implies a restriction in that situation, not because of the contract in place."
FYI, we were advised to retain an attorney in Texas, since that's where the contract was written. In doing so, she also concluded, as you did, that the contract is unenforceable. However, she didn't mention another legal restriction.
Thanks for your time,
G B
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Ken,
I would love to see some of the feedback that you received on this! I have spoken to so many dealers looking for a way out, and you spurred more phone calls. I hope you will share some of the questions that I would guess were sent following this post.
Regards,
K
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Ken
I was a Brinks/Broadview dealer and in May 2010 when the official change took place I was able to receive a release from my contract. I did not desire to move forward under the ADT name. Like many other dealers I was more comfortable selling against ADT. I had heard that after my release ADT put a stop to Broadview executives granting releases to dealers. However, prior to my release, I had consulted my attorney. He stated that only terms he deemed would be enforceable would relate to contracts sold to Broadview for a period of 10 years.
Thank you,
JB
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WOW
Bart A. Didden
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Response
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You can be restricted in business pursuits in more than one way. One way is by an agreement containing a restrictive covenant. But another way is implied by law, and that would include a situation where you sell your subscriber account to another. In such situation you should not be permitted to solicit that very account. Of course you can change that by agreement, but no buyer is likely to agree to that.
I think we are going to have more comments and discussion on this topic, not only ADT's take over of Broadview, but dealer programs in general. As you all should know from my articles, I am not a fan of dealer programs that require dealers to "sell" their subscriber accounts to the Program. That process may give better cash flow, but leaves the dealer without equity.