KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Do manufacturing have dealers over a barrel
October 26, 2026
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Private meetings at ISC EAST
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To arrange a private meeting with K&K and staff at ISC East on November 4 or 5 please contact Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com or Stacy Spector,Esq at 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com. We are planning half hour appointments between 10:30 and 3:30 on November 4 and 5. If you think you need more time let us know. We look forward to seeing you at ISC; meetings will be outside the hall at the food court area.
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IT’S PARTY TIME - SAVE THE DATES - Two parties
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The annual K&K party in New York will be on December 1, 2026 in Old Westbury, NY.
This year we are also starting what we hope will become tradition, a holiday party in Boca Raton, Florida, which will be on December 10, 2026.
To RSVP for either party notify Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com, or Stacy Spector, Esq at 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com. RSVP only if coming and let us know if you will be bringing someone with you.
Be sure to RSVP asap so we can plan, and a gate pass will be sent for the Florida party. Parties will be 6:30 to 9:30 pm, casual dress. Hope to see all of you at one or both parties.
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do mfg have you over barrel
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Ken,
You wrote about negotiating agreements with manufacturer’s a while back. It’s a timely topic again.
Last year, Potter coerced me into buying inventory I didn’t need in order to maintain my dealership and pricing column. There was language in my dealer agreement that I should have pushed back on. Ultimately, I dropped them in favor of Hochiki for better pricing, technology and exclusivity. The greasy business practice undermined a lot of goodwill that took years of building to get me away from Gamewell.
DMP pressures dealers to maintain purchase levels threatening them with pricing column demotion and ultimately being placed on repair-only status.
Last week, OpenEye emailed me after I sent over two purchase orders saying my price level dropped from gold to silver, which added significant cost. In this case, they violated the agreement we signed by not making timely notification of the change. Ultimately, I’ll get gold pricing for the job, but the ick factor has me about to award an upcoming 70 recorder job to Speco.
This is a timely topic for pre- and post- ISC East. Think “before you open up with a new manufacture” use your Concierge time to negotiate an agreement. My consulting practice has picked up momentum helping several clients select distributors, manufacturers and central stations (and of course, legal counsel).
Is there any industry leverage here? What do you think?
name withheld
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Response
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I wonder how ISC would feel about dealers walking around with negative signs asking dealers to negotiate and fight back? Not well is my guess. In many respects it all starts with the manufacturers and software developers. Sure, their audience are the alarm dealers, and they need the alarm dealers. No one would suggest that manufacturers are not entitled to make a profit, and they are entitled to decide what that profit will be. In a capitalistic society and economy, which we still seem to have, albeit with significant government oversight and interference, its competition and need for a product that influences price. Of course the cost of production plays a major role. A manufacturer or software developer, or any vendor to the industry [lawyers, insurance companies and accountants too] have to consider the need for their product or services and competitive alternatives. Some vendors do enjoy a reputation that makes them more desirable than competitors, but I wonder if that also means they have no competitors [like industry contracts and K&K legal services].
The first question a dealer has to ask is whether there is any real bargaining power with the vendor. That will generally determine if there can even be a discussion regarding prices and other terms. You should up to rent a car at the airport a few times a year don’t expect much negotiations from the clerk at the desk. But call corporate and ask to negotiate renting hundreds or thousands of cars or referring hundreds of thousands customers to the desk for their discount, you will likely catch someone’s attention. Same goes for vendors to the alarm industry. You have 10 accounts don’t expect the central station sales department to spend time negotiating; call the central station with a potential of 10,000 accounts and you can negotiate.
I don’t sense that anyone is accusing the alarm vendors of restraint of trade, which is prohibited; but similar pricing is not enough to prove that.
There are a few options that come to mind. You can often drop a name, like KK, to at least get a conversation. Probably more productive, join a buying group, like AIN. While you don’t have the clout to negotiate, AIN does.
The other important issue is, do you have options? Apparently you do, and perhaps you need to explore them; do your homework or hire an appropriate consultant to guide and assist you.
Do you need to read the manufacturer’s contract, terms and conditions? Even if you can’t change a word the only acceptable legal advice is that you should read the contract. There’s going to be plenty of provisions you don’t like, others you may not fully understand. It’s the provisions you don’t understand that you need advice on and Concierge Clients should not hesitate to use their free half hour each month for those questions. While you can’t change the terms you can decide to seek alternatives. I am less familiar with the competing products as I am with the competing central stations. For central stations the Rider to Dealer Agreement is a must for dealers and you should not do business with a central station that won’t sign it; simple as that. If a manufacturer has terms that will be certain to make you fail then you should not agree to those terms. There are too many manufacturers, products and services for you to waste your time on business that will not allow you to succeed; you’re not in business to make someone else rich.
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STANDARD FORMS Alarm / Security / Fire and related Agreements. click here: www.alarmcontracts.com
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CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
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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
www.KirschenbaumEsq.com
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