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Comment on inflation and why RMR sells for a multiple / webinar registration – Miami building collapse  
July 16, 2022
Comment on inflation and why RMR sells for a multiple from article on June 27, 2022
          Re: Comment Newsletter 6/27/22:
          You and Mitch Reitman have provided excellent exposure of the details for determining “market value of RMR”.  It has made it easier for us sloppy amateur bean counters to follow…. or to challenge.  Some of us are still confused. 
           Mitch, where did you get the multiplier “X12” when determining the final value of your example? [“…over the next 12 years, our $22,500 of RMR would produce $1,519,909 of net cash flow,….”].  
          Current market research suggests much shorter life with much higher attrition for millions of existing “deterrent” type customers, when customers learn of slow or no police response to their alarm site. Big risk for investors.
Lee Jones
          I am not aware of any statistical study that suggests that alarm customers have a life span of 12 years, 144 months.  Certainly that’s not to suggest that some alarm customers remain customers for many years beyond that.  Theoretically a 10% attrition rate means you turn over 100% of your accounts in 10 years.
          What is the primary consideration a buyer of alarm accounts must focus on?  The answer is return on investment.  The profit generated by the customer has to enable the buyer to recoup the investment, make a profit, and also pay for the continued cost of servicing the account.  For example, and I haven’t done the math or analysis, a buyer pays 36 times for the account; gets a one year guarantee, and figures not to break even until the customer pays for 46 or more months; something like that.
          Lee’s continuing message is that be wary of alarm customer accounts because sooner or later they are going to figure out that police response is so slow or non-existent, the alarm is useless.
          I don’t agree.  I think we still have police response in most places.  Also, alarm systems have value even without police response.  Alarm systems serve as deterrence to crime and other unexpected events.
          What I can also confidently say is that if Lee is even partially right, you need proper alarm contracts all the more.  Customers suffering a loss that they think the alarm was designed to detect [and prevent] are going to fall back on you when there is a loss. 
          What consequences could follow?  Well join on the July 26, 2022 webinar presented by the fire alarm company owner for the building that collapsed, resulting in the billion dollar settlement and continued litigation – though know Securitas Security paid over half billion to settle against it. 

Announcing webinar on the Miami building collapse case presented by the fire alarm expert who installed and serviced the fire alarm and evac system.  If you do fire alarms you don’t want to miss this webinar.  Register today.
Webinar:  Champlain Towers South building collapse / alarm and security issues
When:  July 26, 2022  12PM  ET
Topic:  Hear from the fire alarm expert who serviced the fire alarm system and was intimately involved in the litigation involving Securitas Security.                 Some information that you should be aware of before the presentation:  Florida requires a voice evacuation system that provides speakers in every apartment so there can be floor by floor or building wide communication to evacuate.  This fire alarm system had that system and it was working.  Securitas provided security guards stationed at the building.  When the first fire alarm signal came into the security desk the guard did not determine the cause of the fire alarm or the zone, and did not utilize the evacuation system to alert residents.  Securitas has settled the Plaintiffs case paying over half of the almost one billion dollar settlement.  
Presented by:  Matt Haiman, Premier Alarm Systems – the fire alarm company for Champlain Towers South.  There will be ample opportunity for Q&A. 
Hosted by:  Ken Kirschenbaum,Esq
Who should attend:  Alarm owners installing and servicing fire alarm systems

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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