Negotiating non-compete terms

If you're a seller, the non-compete is the second-most-important clause in the deal after price. Don't sign the standard template without negotiating.

Negotiation priorities (in order).

1. Geographic scope. A 100-mile radius is usually overreaching. Push back to the actual served area + a buffer (say, 25 miles beyond your farthest stop).
2. Duration. 5 years is common; 2–3 years is often achievable, especially with a smaller deal. Shorter duration is more valuable than narrower geography for most sellers.
3. Activity scope. "Pool service" is appropriate. "Any business related to pools, spas, or aquatic equipment" is too broad, it would bar you from working as an equipment salesperson, a pool-store employee, a service consultant.
4. Carve-outs. Pre-existing relationships (a friend whose pool you've serviced for free for 10 years), inadvertent customer contact, employment by an unrelated employer in the industry.
5. Liquidated damages. What happens if you breach? Standard language often allows the buyer to pursue actual damages plus injunctive relief. Try to cap liquidated damages at a reasonable multiple of the breach's actual harm.

Tactical advice.

- Make non-compete asks concrete and small individually. "Can we shorten by one year?" lands better than "the whole clause is too aggressive."
- Trade non-compete concessions for things the buyer wants (faster close, lower escrow, broader reps and warranties).
- Engage an attorney to redline the language, small word changes ("services" vs. "businesses related to") have large enforcement implications.
- Read the choice-of-law clause: a non-compete governed by the buyer's home state may be more enforceable than one in your state.

The "reasonable" trap. A non-compete that's "too broad" is often *partially enforced* by courts (modified to be reasonable), not voided entirely. Don't sign overreaching language assuming a court will save you, negotiate the scope you can live with.