Mark Pestronk
Mark Pestronk
Q: In your law practice, what are the most common questions that small and startup travel company owners ask you? What advice do you give in answer?


A: Here are the eight most common questions that I am asked, ascending Letterman-style, with No. 1 being the most common:

8) Do we really have to register as a seller of travel in states where I have just one or a few sales, with no location there? If we don't, what can happen to us?

A: Yes, you really have to, unless you qualify for an exemption. Let's focus on the two states with a track record of enforcing the law against out-of-state companies. For Florida, you can be an exempt agency if you have been in business for at least three years under the same ownership and don't issue vacation certificates. If you are an independent contractor of a registered host, you can be exempt if you meet the criteria here.

For California, you can be exempt from registration if you meet all the criteria here.

While willful failure to file is a crime in both states, I have never known of any criminal prosecution. For California, the penalty is $5 per day up to a maximum of $500. For Florida, the penalty is "up to" $5,000, but it typically begins with a warning letter, and then you must register to avoid penalties.

7) If my agency's employee quits, goes to work for another agency and transfers bookings, am I still entitled to the commission?

A: Yes. The agency that originally made the sale is entitled to the commission. You could sue the new agency or the supplier. It doesn't matter if the supplier has already paid the new agency.

6) Do a corporate client's traveler profiles in your GDS belong to the corporation?

A: No. They belong only to you, unless a contract with the client provides otherwise.

5) How do I prevent chargebacks for unauthorized credit card charges?

A: You can't prevent them 100%, but you can lessen their occurrence if you don't accept phone, fax or email charges from unknown people. If you do anyway, at minimum, get copies of the front and back of a driver's license and credit card and match the names.

4) If an employee signs a supplier contract without my permission, can I get out of it by claiming that he was not authorized?

A: Yes. If the employee's title is not a corporate officer's title, and if you took no action to indicate to the supplier that the employee was authorized, such as making a payment, you can void the contract.

3) How do I find a buyer for my business?

A: Here's the order of likely success (with the most likely first): your host agency if you have one; a fellow hosted IC; a member of your association, consortium, or franchise; an experienced businessperson in your community; a national agency-consulting service like Innovative Travel Acquisitions; a local broker; or an employee.

2) Could I be liable for failing to disclose a destination danger such as State Department travel warnings for a Mexican state?

A: As a travel counselor, you have a duty to disclose destination dangers that you know of or should know about by reading the trade press, unless the danger is obvious or well-publicized. On the other hand, you do not have a duty to proactively investigate destinations or hotels, for example. To prevent frivolous claims, use a disclaimer that directs the client to the State Department travel website.

1) Do you have a free sample disclaimer?

A: Certainly. Go to www.pestronk.com/free.html. You'll find several samples there.
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