Non-Compete Agreements

Non-Compete Agreements

It is one of the least talked-about subjects among salon owners is the infamous Non-Compete Agreement. Whether you love 'em, hate 'em, don’t understand 'em or want to learn more about 'em, most salon owners must consider them at one time or another.

Salon owners generally fall into three categories of opinion on this subject - Confused, Against, or Wishy Washy. But Non-Compete agreements have existed in corporate America for a long time. In our industry, NC’sbecome a hot topic on the day that  salon owners unexpectedly lose a key service provider -  usually to a competitor within a short distance away. 

I have legally enforced non-compete agreements against former employees at my salon.Several years ago, my salon was at the point where it had lost nine service providers over a three-year period to the same salon located about two miles away -- totaling over $1 million in annual sales. After I lost a tenth service provider to that salon, I reached a breaking point. At that moment, I decided to take control of the future my company.

Here's the skinny:

WHY HAVE NON-COMPETE AGREEMENTS? 

Simple: because it’s your salon, your dream, your future, your retirement plan, it's in your name, so it should be on YOUR TERMS!

WHAT SHOULD BE IN A NON-COMPETE AGREEMENT?

Consult with your attorney. Tax laws and  legal statutes differ from state to state. In general terms, every NC Agreement needs a few components: Termination; No-Work Radius; No contact with salon guests; Penalties: and Signature required.  

TO ENFORCE OR NOT ENFORCE . . . WHERE TO GO FROM HERE?

When you need to enforce one - if a stylist leaves -  you must follow through and take legal action. If you choose not to enforce the agreement, then there is NO point in having any. 

The idea of filing a legal suit against someone can be both expensive and scary.  But salon owners stand to lose their entire business because they took "the honor system" for granted. It's easy to lose sight of the fact that if we came to work one day and nobody was there, we’d still have to pay the bills!

**For specific information & additional ideas on how to implement this program (or others), please email SSBC’s Heather Bagby at hbagby@summitsalon.com to arrange for individual telephone coaching with SSBC Salon & Spa Marketing Specialist Marc Rockquemore. Marc is available to speak to you by telephone at an hourly-rate, and can tailor the session to include any other Marketing-related subjects you may need assistance on. Please note that the opinions of all SSBC blogs represent the personal opinions of the author, and do not necessarily represent the opinion of Summit Salon Business Center.