Sonitrol franchisees, Stanley reach deal

SSN Staff  - 
Thursday, January 21, 2010

NAPERVILE, Ill.—After three 14-hour days spent at the negotiating table, representatives of the Sonitrol National Dealers Association and Stanley CSS leadership have hammered out a new franchise agreement. The agreement is amenable to the franchisees, who have now agreed to scuttle a lawsuit in front of a judge and sign a letter of intent to sign the new franchise agreement once it’s filed in all 50 states.

“Stanley Convergent Security Solutions is pleased with the recent ruling granting Stanley CSS’s motion for summary judgment of lawsuit brought by the SNDA on behalf of its member franchisees,” Stanley executives responded in an email interview. “The suit was filed against the former owners on April 17, 2008, prior to Stanley CSS’s acquisition of Sonitrol in July 2008. The order granting Stanley CSS’s motion for summary judgment was issued by the court on December 22, 2009. The SNDA has filed an appeal of the ruling; however, the parties have agreed to suspend pursuit of the litigation in light of the successful contract negotiations which concluded last week.”

“There were five of us,” said Doug Curtiss, owner of the Sonitrol of Hartford franchise and past president of the SNDA, “they had their guys, and everybody went into the meeting really thinking about looking forward instead of looking backward. That was one of the critical differences this time around: We approached it as, ‘If we’re going to live together, how can we do that?’”

In the lawsuit, the franchisees argued that Stanley was not living up to its end of the franchise bargain by providing a proprietary product for them to sell and by giving them dedicated territory in which to sell.

Curtiss said both issues really came down to an issue of territory, and that new rules of engagement have been ironed out. “Stanley will sell the product in their territory, and not in ours,” Curtiss said. “As it relates to national accounts, which is an area of significant growth, that’s what Stanley brings to the table. So, we figured out a way to run a national accounts program where if a location happens to be in a franchisee’s territory, the franchise will install it, and there will be a single point of contact with Stanley.”

Further, Curtiss said, new standards have been set for royalties being paid back to Stanley by the franchisees. Now, “increases in royalties will come from a mutual growth in business,” he said. “In other words, they can’t just raise royalties for the sake of raising royalties. They raise their revenue by giving us good product and growing our business.”

“Stanley CSS’s priority throughout this process has been to conclude discussions with the SNDA for a new franchise agreement that is fair to both parties, and we are pleased that this new agreement supports our stated strategy of mainstreaming Sonitrol Audio Verification,” the Stanley executives said. “Aligning our interests and crafting a great solution for the mainstreaming of verified alarms is a positive outcome for all involved. We are looking forward to a prosperous future working together with the Sonitrol franchise network, and we are pleased that we were able to overcome our differences and fashion an agreement that will allow us to continue to deliver exceptional service to our customers.”

Curtiss said the SNDA is pleased as well. “The Stanley people are serious about mainstreaming audio-verified alarms, and they can’t do it without the true believers, the franchisees, and we can both help each other there. They’ve got world-class manufacturing. We need them as much as they need us.”

The individual franchisees will still have to decide on their own whether to accept the franchise agreement once it’s registered in all 50 states, “but this is a good agreement,” Curtiss said, “and it’s a good agreement that anybody can get behind. We’re all singing ‘Kumbaya’ now.”