Offer Subject to Change on 30 Days’ Notice

by Charles Cohon, President and CEO, MANA

My local donut shop once offered a “Buy 11 donuts, get the 12th donut free” punch card. “Terms subject to change on 30 days’ notice.”

A new owner terminated the punch card program. I had nine punches, but it was not a big deal. After all, it was only a donut.

The first Internet Service Provider (ISP) I ever used offered one year of service at a very reasonable price.

Three months into the contract I received notice that my monthly rate was doubling. I wrote to the company’s president: “I still have nine months to run on my one-year contract, so this letter was sent to me in error.”

More than two decades later I am still mad about his reply: “I sold my company and the new owners have new rates. As you can see your contract is subject to change on 30 days’ notice.”

Replacing my ISP was such a huge hassle that I ended up eating the difference. This was a bigger deal than just a donut, so I started paying more attention to “subject to change on 30 days’ notice.”

Most reps I know have a horror story about a big order and a “subject to change on 30 days’ notice” rep agreement. They had signed a contract with a manufacturer whose character was beyond reproach, but later faced a new owner eager to find a way to avoid paying commission on a very large order.

That’s why many reps now only accept agreements with extended post-termination commission or Life of Part/Life of Program (LOP/LOP) language. After investing years of work to earn a big order, “subject to change on 30 days’ notice” rep agreements are too big a risk.

And a six-figure or seven-figure commission is not just a donut.

Charles Cohon, CPMR, is CEO and president of MANA. In 2016 Cohon earned the Certified Association Executive (CAE) designation after completing American Society of Association Executives (ASAE) coursework and testing. Cohon also earned an MBA with honors and with concentrations in strategic management and entrepreneurship from the University of Chicago Booth School of Business, and was founder and owner of a very successful Illinois manufacturers’ representative firm for nearly 30 years before joining MANA.