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Early Termination Fees

Are Early Termination Fees fair business practice or a great way to lock customers into high costs and bad service?

Like many small businesses, dental practices use various third- party service providers to help run their operations. For example, credit card processing and business phone and internet.

And while these services are essential, the long contracts and unfavorable terms sometimes associated with them can be costly. What gets presented as a “partnership” in the initial sales pitch, often turns out to be anything but that.

One of the most damaging elements of a service contract is the early termination fee (ETF). But ETFs are not inherently bad. When used correctly and ethically, they represent a fair way for these service providers to protect themselves.

If the provider incurred out-of-pocket costs while onboarding you, it’s reasonable for them to recoup what would’ve otherwise been lost because of the early cancellation. For example, maybe they provided equipment and installation upfront at no charge and/or incurred labor costs such as training.