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Automatic renewal question / Comment on covid and valuation
September 24, 2020
Automatic renewal question
            I have some questions in regards to our monitoring contract which was written by your office. On page 2 of the “Standard Commercial Security/Service Agreement” paragraph 4 it says the agreement shall automatically renew for a like term, but we were wondering if there was a reason it could not be automatically renew for 1 year.
            On the “Standard Commercial Security Agreement” on page 2 paragraph 5 it states it will renew month to month, and we were wondering if it could also be automatically renewed to 1 year.
 Thank you,
            The Commercial All in One [on contract it’s called Standard Commercial Security Agreement] has the same automatic renewal provisions as all Kirschenbaum Contracts ™.  That automatic renewal is month to month.  If the form you have before you has “renew for like term” or something else, then either you asked us to change it or you changed it yourself after we sent it to you.  
            Month to month does not run afoul of any automatic renewal provisions we are aware of, so it should be enforced.  I have previously advised whey month to month is recommended by me.  If you are in a state with no law on automatic renewal then you are of course at liberty to use any renewal term you are comfortable with.
Comment on covid and valuation from article on September 9, 2020
            Victor Harding is correct about pricing of assets based on the volume of the assets.
            For example, if you buy one account or 50 and re-label each site with stickers and signs okay, but if you go out and re-label 500 or more accounts that overlay your existing account base that is much more powerful in brand support and recognition which should drive future sales.
            Size does make a difference.
Bart A. Didden, President
U.S.A. Central Station Alarm Corp.
Port Chester, NY
Milford, CT
St. Paul, MN
            There is no question that more accounts will likely fetch a higher multiple, though each deal stands on its own.  Multiples are often figured based on intuition.  Sure mathematical calculations are used, but gut feeling plays an important role.  That’s why we see such variation in multiples.  

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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