Non-Compete - tanTALK

jimijam · 09-22-2004, 08:47 AM

Hi all, I'm in the negotiation phase of buying a very nice salon in an excellent location . Owner is selling due to infamous "other business interests". Says he's getting out of tanning and moving on to "bigger and better things". Only one problem, he doesn't want to sign a non-compete for more than 2 years & 2 miles. This person has a lot of experience in tanning (I do not) and I'm worried about what he may be planning. If he's getting out of tanning, why's he concerned with the non-compete? Any thoughts/opinions would be appreciated!

Soakinuptherays · 09-22-2004, 09:21 AM

I would never buy a salon without a 3 year - 5 mile Non-Compete (depending on market size/dempgraphics). If he will not sign then you need to lower the price of the salon or simply pass. That would scare me.

It's your money, you have the power to walk away and start a new salon somewhere else. Make a smart decision.

perfecttan01 · 09-22-2004, 12:22 PM

Agreed!!!!

ALOHATANCA · 09-22-2004, 01:36 PM

Yes, why should they care???

MATT A · 09-22-2004, 01:40 PM

A NON-COMPETE is totally worthless. It may sound good which is and it is a legal document. However I have seen this happend a couple times. Owner signs NON-COMPETE then opens a salon under his sister in lawas name. Another one was his girlfriend. The money trail leads to the owner but you can't prove it. TOTALLY WORTHLESS If someone wants to open around you they will.

Neon Beach · 09-22-2004, 01:42 PM

Hmmmm! Good point.

sizzlestan · 09-22-2004, 01:54 PM

They are very hard to enforce yet always a good idea in theory. We have one with the owners we are buying out but I know them personally and know for what we are paying them they arent bringing $100k out of their pocket to start another one. We got a steal of a deal.

RandyR · 09-22-2004, 01:59 PM

Maybe if you word the non-compete is a way as to close any loopholes. Something like "you may not participate in, profit from, be associated with, or be involved any way in the the business of UV tanning or UV free tanning within a five mile radius of....". Check with your lawyer of course...you are using a lawyer I hope. Otherwise it would be a no-deal for me.

sizzlestan · 09-22-2004, 02:04 PM

Randy

Even with that wording in order to file a lawsuit they would need proof that they profited and I am sure they are not willingly going to give up bank statements because you asked. Its a tough situation to be in. Sounds like the guy may be wanting to sell his dying horse in order to buy a stronger one right across the street (all with your loot). Read between the lines. What people say and how they act are different, especially in this case.

Alan

jimijam · 09-22-2004, 02:08 PM

Thanks for all the replies. I'm glad to see everyone seems to feel the same way I do. It'll be disappointing if this is a deal breaker because I've spent a lot of time on this and was very excited with the opportunity. But if he won't agree to the NC, then it's highly likely it's not such a good opportunity (for me at least)

_________________
[ This Message was edited by: jimijam on 2004-09-22 14:10 ]

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
Best way to compete with mega salon? Beware, they\'re heading to San Diego next!	CCTan	General Tanning Industry Discussions	2	07-07-2005 06:22 AM
Non Compete agreements\\Employee agreements	Tanmand	Tanning Salon Management	6	03-04-2004 08:01 PM

09-22-2004, 08:47 AM	#1 (permalink)
jimijam Join Date: Aug 31 2004 Posts: 2 Rep Power: 0	Hi all, I'm in the negotiation phase of buying a very nice salon in an excellent location . Owner is selling due to infamous "other business interests". Says he's getting out of tanning and moving on to "bigger and better things". Only one problem, he doesn't want to sign a non-compete for more than 2 years & 2 miles. This person has a lot of experience in tanning (I do not) and I'm worried about what he may be planning. If he's getting out of tanning, why's he concerned with the non-compete? Any thoughts/opinions would be appreciated!

09-22-2004, 09:21 AM	#2 (permalink)
Soakinuptherays I love Derf!! Join Date: Oct 19 2000 Location: Tampa, Florida Posts: 1,160 Rep Power: 24	I would never buy a salon without a 3 year - 5 mile Non-Compete (depending on market size/dempgraphics). If he will not sign then you need to lower the price of the salon or simply pass. That would scare me. It's your money, you have the power to walk away and start a new salon somewhere else. Make a smart decision.

09-22-2004, 12:22 PM	#3 (permalink)
perfecttan01 Join Date: Aug 31 2002 Location: U.S.A. Posts: 491 Rep Power: 22	Agreed!!!!

09-22-2004, 01:36 PM	#4 (permalink)
ALOHATANCA Tan Talk Industry Pro member Join Date: Nov 14 2003 Location: CALIFORNIA Age: 65 Posts: 3,455 Rep Power: 24	Yes, why should they care???

09-22-2004, 01:40 PM	#5 (permalink)
MATT A I'm Banned Join Date: Sep 6 2004 Posts: 13,921 Rep Power: 0	A NON-COMPETE is totally worthless. It may sound good which is and it is a legal document. However I have seen this happend a couple times. Owner signs NON-COMPETE then opens a salon under his sister in lawas name. Another one was his girlfriend. The money trail leads to the owner but you can't prove it. TOTALLY WORTHLESS If someone wants to open around you they will.

09-22-2004, 01:42 PM	#6 (permalink)
Neon Beach Join Date: Nov 30 2000 Location: Ontario Age: 61 Posts: 38,594 Rep Power: 107	Hmmmm! Good point.

09-22-2004, 01:54 PM	#7 (permalink)
sizzlestan Join Date: Jul 25 2004 Posts: 446 Rep Power: 20	They are very hard to enforce yet always a good idea in theory. We have one with the owners we are buying out but I know them personally and know for what we are paying them they arent bringing $100k out of their pocket to start another one. We got a steal of a deal.

09-22-2004, 02:04 PM	#9 (permalink)
sizzlestan Join Date: Jul 25 2004 Posts: 446 Rep Power: 20	Randy Even with that wording in order to file a lawsuit they would need proof that they profited and I am sure they are not willingly going to give up bank statements because you asked. Its a tough situation to be in. Sounds like the guy may be wanting to sell his dying horse in order to buy a stronger one right across the street (all with your loot). Read between the lines. What people say and how they act are different, especially in this case. Alan

09-22-2004, 02:08 PM	#10 (permalink)
jimijam Join Date: Aug 31 2004 Posts: 2 Rep Power: 0	Thanks for all the replies. I'm glad to see everyone seems to feel the same way I do. It'll be disappointing if this is a deal breaker because I've spent a lot of time on this and was very excited with the opportunity. But if he won't agree to the NC, then it's highly likely it's not such a good opportunity (for me at least) _________________ [ This Message was edited by: jimijam on 2004-09-22 14:10 ]

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)