# How does a non-compete work after you sell a dental practice? After a sale, a non-compete bars the selling dentist from practicing within a set radius for a set period, and McLerran & Associates says DSO buyers often propose 2 to 5 years and 5 to 15 miles. The FTC’s 2024 rule was removed effective February 12, 2026, so state law decides enforceability at this stage of the [practice lifecycle](https://ddsintel.com/lifecycle). By DDSIntel Editorial Team. Source: DDSIntel, https://ddsintel.com/lifecycle/non-compete-after-a-sale. Published 2026-10-28; data as of 2026-10-02. ## Key numbers - **2** years, the short end of DSO non-compete proposals in one firm’s guide (McLerran & Associates (Dental Transitions), 2026-07-16; https://dentaltransitions.com/articles/dso-offer-comparison-dental-practice/) - **5** years, the long end (McLerran & Associates (Dental Transitions), 2026-07-16; https://dentaltransitions.com/articles/dso-offer-comparison-dental-practice/) - **5** miles, the smallest radius in that range (McLerran & Associates (Dental Transitions), 2026-07-16; https://dentaltransitions.com/articles/dso-offer-comparison-dental-practice/) - **15** miles, the largest radius in that range (McLerran & Associates (Dental Transitions), 2026-07-16; https://dentaltransitions.com/articles/dso-offer-comparison-dental-practice/) - **15** years over which a buyer amortizes a covenant tied to an acquisition (Internal Revenue Service, Instructions for Form 4562, 2026; https://www.irs.gov/instructions/i4562) ## Why do buyers require a non-compete? Buyers require one because they are paying mostly for patient relationships. If the seller could open an office nearby, much of the purchased [goodwill](https://ddsintel.com/glossary/goodwill) could leave with them. A sale-of-practice covenant protects that investment for a defined time and area, and both private dentists and DSOs ask for one. DSO deals often add a second covenant inside the seller’s post-close employment agreement, which can run from the end of employment rather than from closing. That makes the [work-back period](https://ddsintel.com/lifecycle/work-back-period) part of the same negotiation; the [non-compete](https://ddsintel.com/glossary/non-compete) glossary entry has the short definition. ## How long and how wide are dental non-competes? There is no national standard. McLerran & Associates says DSO buyers often propose non-competes of 2 to 5 years and a 5 to 15 mile radius, and the activity covered matters as much as length and distance. Dense urban markets tend to see smaller radii than rural ones, because patients travel shorter distances. Negotiate the measuring point (the office, not your home), carve-outs such as teaching or charity care, and what happens if the buyer ends your employment without cause. Comparing those terms across buyers is part of [comparing DSO offers](https://ddsintel.com/dso/comparing-dso-offers). ## Is a non-compete enforceable after selling a dental practice? Usually, if it is reasonable under your state’s law. The Federal Register records that the FTC voted on September 5, 2025 to dismiss its appeals and accept the vacatur of its 2024 Non-Compete Rule, then removed the rule effective February 12, 2026. Enforceability is therefore a state-law question for your attorney. States differ: some restrict non-competes broadly, while many treat covenants given in the sale of a business more favorably than employee covenants. Ask local counsel how your state treats both the purchase-agreement covenant and any employment covenant. The [purchase agreement clauses](https://ddsintel.com/for/dental-purchase-agreement-clauses) guide covers where the covenant sits. ## How is non-compete money taxed in a dental sale? Money allocated to the covenant is generally ordinary income to the seller. McLerran & Associates puts that at up to 37% federally, against up to 23.8% for long-term capital gain on goodwill, while the buyer amortizes either one over 15 years under section 197. That is why sellers usually push for a small covenant allocation. 26 U.S.C. 197 lists a covenant not to compete entered into in connection with an acquisition as an intangible amortized ratably over 15 years. Settle the allocation in the definitive agreement with your CPA; deal-structure context is in [practice valuation multiples](https://ddsintel.com/data/practice-valuation-multiples). ## What should a seller negotiate before signing? Negotiate before the letter of intent, while leverage is highest. Priorities are the radius and its measuring point, the duration and its start date, the activities covered, a non-solicitation clause limited to the sold practice’s patients and staff, and release triggers if the buyer terminates you without cause or misses its obligations. A non-solicitation clause limits whom you may approach rather than where you may work, so a stronger non-solicit can be a fair trade for a smaller radius. Align the [letter of intent](https://ddsintel.com/glossary/letter-of-intent) with the final agreement. Payer mix can change how much a buyer cares about the covenant; see [selling a Medicaid-heavy practice](https://ddsintel.com/dso/selling-a-medicaid-heavy-practice). Market timing is tracked through [dental transition signals](https://ddsintel.com/signals). ## Frequently asked questions ### How long is a typical dental non-compete after a sale? One firm’s 2026 guide says DSO buyers often propose 2 to 5 years. Private deals vary, and the scope is negotiable. ### What radius is common? The same guide cites 5 to 15 miles for DSO proposals, with smaller radii more common in dense urban markets. ### Did the FTC ban non-competes for dentists? No. The FTC’s 2024 rule was vacated, the FTC dropped its appeals in September 2025, and the rule was removed effective February 12, 2026. ### Can I keep practicing elsewhere after I sell? Only outside the covenant’s radius, duration and activity scope, or with the buyer’s written consent. ### Is non-compete money taxed differently from goodwill? Generally yes: it is ordinary income to the seller, while goodwill is usually long-term capital gain. ## Sources 1. McLerran & Associates (Dental Transitions). How to compare DSO offers for your dental practice (July 16, 2026). https://dentaltransitions.com/articles/dso-offer-comparison-dental-practice/ 2. Federal Trade Commission, via the Federal Register. Non-Compete Clause Rule: removal of 16 CFR part 910 (effective February 12, 2026). https://www.federalregister.gov/documents/full_text/html/2026/02/12/2026-02866.html 3. McLerran & Associates (Dental Transitions). Dental practice sale tax implications in a DSO transaction (October 2, 2026). https://dentaltransitions.com/articles/dental-practice-sale-tax-dso/ 4. U.S. Code (Cornell Legal Information Institute). 26 U.S. Code § 197, Amortization of goodwill and certain other intangibles. https://www.law.cornell.edu/uscode/text/26/197 --- DDSIntel is a dental transition intelligence platform that detects pre-market dental practice transition signals for brokers, DSOs, lenders and the firms that serve them.