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No Compete Agreements

by buckeye04
9 replies
For those of you who sign a "No Compete Agreement" with your clients, how do you charge for that? Is it monthly, one-time, or what? I'm just trying to figure out a good amount to charge if I'm going to be working exclusively with certain clients in a specific niche. Also, what's a good range/radius to work with? I know with bigger cities it's more flexible since there are so many areas within the city.

If anyone has a sample agreement they wouldn't mind sharing that would be helpful as well!

Thanks,

Mike
#agreements #compete
  • Profile picture of the author David Miller
    I don't quite understand why you would want a non-compete? What if your client sees another client of yours as their competitor, even if it's not a direct competitor?

    For example, suppose you sign up a plumber and you execute a non-compete with him. Then your next client is a hvac contractor, although it's not technically plumbing, there is some plumbing type of work involved. Now the plumber can say you are working with a competitor. I can see where it could get VERY messy.

    You sign a bankruptcy lawyer, you're going to have to rule out every lawyer that offers bankruptcy in their practice even if it's a referral between lawyers...I just can't imagine how any client would even consider asking this of you.
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  • Profile picture of the author apolwar
    No compete agreements?

    You mean, they can't get any service like yours from anyone? Or you won't offer any service they purchased from you to other people? Exclusivity contracts?
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    • Profile picture of the author MikeFriedman
      I don't use a separate non-compete agreement. It is part of my contract. And it is specific to services they have purchased and to their market area. I do not charge extra for it. I think it is implied that if a retailer is going to pay me monthly to market their business online, it would be a complete conflict of interest for me to also be marketing their top competitor.

      To be honest, it only makes sense. I cannot take on 10 restaurants for SEO services in the same county. Only one of them can be ranked #1 and one of them is going to have to be ranked #10.

      Now if I am working with a fine dining restaurant in an area, I wouldn't hesitate to take on a pizza shop. Although in the same industry, they are not in competition with eachother.

      Of course, there can be some variation to this. If a real estate agent comes to me and wants a website and facebook page setup with no other services other than hosting, yeah I'm going to keep going after other real estate agents. Once you tread into the territory of consistently marketing a business online and charging a monthly fee for it, I do not believe you should be providing the same service to direct competition. If the client knew you were doing that, how could they really feel comfortable and trust that you are making every effort to promote their business?
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      • Profile picture of the author misterme
        Originally Posted by MikeFriedman View Post

        I don't use a separate non-compete agreement. It is part of my contract. And it is specific to services they have purchased and to their market area. I do not charge extra for it. it only makes sense. I cannot take on 10 restaurants for SEO services in the same county.
        On the other hand, it works against you, doesn't it, in that if you specialized only in, say, high scale steak houses, you could become the industry's go to guy and command premium rates. Marketing them wouldn't be just about getting listed first in SERPs, which many people can do, but about campaigns and promos that work to bring in their types of customers.

        So it's not a no-compete policy you'd have, but a non-disclosure policy where you don't speak of another person's business to your clients. Even though you will use what you learn about each and every one of them to help your high paying clients.

        Just a thought.
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  • Profile picture of the author k60mall
    I always do a No compete agreements for a "key word" rather than a specific niche like a plumber.
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    • Profile picture of the author sprks79
      Normally if I have to do a no compete, I would almost always charge 2-3x what I would normally. So far most of my clients understand that in order to have my services all to themselves it is going to cost. Depends on the customer and area of business.
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  • Profile picture of the author itsmybusiness
    Just let you guys know there is a difference between non-compete, and exclusive services. What you guys are talking about here is exclusive services meaning that you agree to perform services exclusively to this particular company for a specific time frame. Non-compete is generally used when you hire Independent Contractors, and they agree not to start a business like your in a specific geographical area for a specific time frame after working with you.
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  • Profile picture of the author localbusinessguy
    It would be difficult to work with a client within one niche as you are cutting down the amount of people you can work with. I agree with k60mall in that I sell keywords not a niche so I can work with more clients in one niche.

    This is also a great way to up-sell to more keywords for the same client.
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  • Profile picture of the author bit twiddler
    Non_Competes are typically for large provider & client relationships, when in the marketing space. There are as many ways to use these as there are providers and clients. On the scale of offline marketers though, especially if the clients are are contracted for less than $25k per year, they are unacceptable and should not be part of the relationship.

    If you are contracting for a period of a year or less, and the contract is considerably larger than $25k, then it may or may not be suitable to consider the use of a non-compete. Never let a non-compete exist, or be enforceable, for a period greater than the contract itself.

    If you do enter into a non-compete, it must be explicit as to what the limitations are. Especially the limitations defining the competitors you are to refrain from engaging as well as the geographic limitations. This document should not be created by those who do not have a business background. If you are going to enter into a non-compete agreement, make certain that your attorney has reviewed and approved the execution of this instrument. It is considered foolish, even among the most savvy business people, to enter into a non-compete without a full on legal review and approval.

    T J

    Originally Posted by buckeye04 View Post

    For those of you who sign a "No Compete Agreement" with your clients, how do you charge for that? Is it monthly, one-time, or what? I'm just trying to figure out a good amount to charge if I'm going to be working exclusively with certain clients in a specific niche. Also, what's a good range/radius to work with? I know with bigger cities it's more flexible since there are so many areas within the city.

    If anyone has a sample agreement they wouldn't mind sharing that would be helpful as well!

    Thanks,

    Mike
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