From Storefront Employee to Your Own Business: Who Owns Clients? | TravelResearchOnline

From Storefront Employee to Your Own Business: Who Owns Clients?

Hi Mary,

I’m working my way through the 7-Day Set Up and had a question about the piece on a Tale of Two Agents. I tried to comment directly on the page, but couldn’t get it to post. (I’ll have to check on that issue – probably a cookie setting).

I’m a little confused (and concerned) about the comment made in the piece on Wendy’s World Travel: “Even if you worked in a storefront, those are the agency’s clients and they don’t go with you.”

From everything that I’ve read (admittedly, somewhat limited), clients don’t actually belong to anyone. While booking with an agency under their IATA, the client’s booking belongs to the agency. However, if an agent leaves and former clients decide to follow them, new bookings belong to the agent under their new host/business and its IATA.

“After employment ends, either party is entitled to try to keep the client.” As per the article here:

https://www.travelweekly.com/Mark-Pestronk/Law-makes-no-distinction-when-it-comes-to-personal-clients-

Mark has covered this topic several times from different perspectives.

Could you please clarify the statement in the article here and where this information is coming from? Just trying to be sure I’m covering bases as I make my leap to an HA.

Thank so much for the site and the 7-Day program!

Gabrielle in Colorado

 


 

Hi Gabrielle!

Thanks for reaching out! This is a really good question, and it can be such a blurry line when it comes to transitioning from a storefront (employee) situation to starting your own business as an IC with a host (or independent).

As you said, if a travel agent leaves a storefront and the client chooses to follow that agent, the client is free to do so. The exception to this is if the storefront has a non-compete contract with their employees, which would bar an agent from booking that same client for a certain number of years. This will vary from agency to agency as there’s no uniform contract. Admittedly, these contracts are difficult to enforce on the agency end, but they exist nonetheless.

It’s legally problematic to cancel a booking with the former agency and rebook it through the new agency. This opens up the new travel agency to liability. As Mark stated in another (albeit older) article, “For work in progress, such as cruises and tours under deposit when he leaves the old agency, there is an additional consideration: If he tries to take the booking away, then the old agency can successfully sue him for the lost commission.” The best thing to do in this scenario is to make a clean break. If an agent works for a storefront and is in the middle of booking a trip, it should be passed back to the storefront agency to complete the booking.

Beyond legality, I’m also of the opinion that it’s not ethical to recruit/poach or entice a client to move with a travel agent to their new agency. One thing to keep in mind is that the agency has invested in their employees––the marketing and training––that has enabled that agent to book the clients in the first place. The thing is that a lot of storefront travel agencies are also small businesses trying to make it in the industry too. So while it’s admittedly difficult to venture out on one’s own, hopefully the departing agent will respect the fact the agency has invested time and resources in them. This to me is a matter of best practices.

Now, if a former client is to seek out departing travel agent at their new agency, that’s a different issue entirely. (Hopefully it goes without saying that family and close friends would be among those to choose to follow the agent!) So if a client searches for their agent online or bumps into them in the grocery store and asks to reconnect to book their travel, then that agent can and should feel good about acquiring their business (unless, of course, there is a non-compete clause with their former storefront agency).

Granted, it’s difficult to start a business/ travel agency and it can be very tempting for an agent to ask clients to move with them. But at the end of the day, I’m of the opinion that it’s the client that should initiate this move, not the agent…it’s best for everyone involved and for the agent’s reputation in the industry long term.

Also on this note, this is a good reminder that travel agent employees can negotiate contracts or agreements. So, if an agent starts working at a storefront agency as an employee and they are bringing a book of business to that agency (whether it be family, close friends, or a group cruise they book annually), they can talk to the agency about who the booking belongs to when/if they leave (and get it in writing). While it might be an awkward conversation, the agency would hopefully be impressed by the number of clients that are coming in the wake of that agent.

If you’re wanting more legal clarity around the issue, you can always refer to our travel lawyer resources to touch base with a travel lawyer like Mark personally.

That’s my two cents (well, okay, maybe it’s more like ten cents). Let me know your thoughts, Gabrielle.

This is a great topic! Thanks for the question!

Mary


Mary Stein joined Host Agency Reviews in 2016 as its editor. She’s passionate about supporting aspiring travel agents to turn their dreams into their livelihood.
A writer by trade, she can be found working on her novel and teaching creative writing workshops when she’s not tooling around on Host Agency Reviews writing articles and newsletters.
She has received awards for her writing from the Minnesota State Arts Board, the Jerome Foundation and the Loft Literary Center. She lives in Minneapolis, and loves hiking, camping, and traveling (of course!).

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