Do outdoor power equipment dealer agreements transfer when I buy the dealership?

An outdoor power equipment dealer lives on the brands it is allowed to sell. Mowers, chainsaws and trimmers may come through a few manufacturers or distributors, each with its own dealer agreement. If one drops out at a sale, the shop you thought you bought may look very different. The question deserves attention before you spend money on anything else. Broader dealer types are covered in powersports dealership due diligence.

Whom to ask

Ask the seller for every dealer, distributor and service agreement, and for the name of the territory or regional manager at each brand. With the seller’s permission, speak to those contacts yourself. Some brands will talk to a prospective buyer directly. Others want the owner to make the introduction. Either way, the conversation should happen with the seller’s knowledge.

What approval looks at

Ask each brand what it wants to know about the buyer’s experience, finances, facility and plans for service and parts. Some may expect a business plan, a site visit or training for new staff. Prepare the same things you would give a lender, and ask each brand what it needs and how long its review takes.

Make the deal conditional

• Ask your lawyer whether closing can be made conditional on written approval from the key brands.
• Decide which brands matter most and which you could do without.
• Ask what happens to floor stock and parts orders if a brand declines.
• Check whether warranty claims owed to the shop carry over to you.

What the agreements mean in law

Whether an agreement can be assigned, and on what terms, depends on its wording. That is a legal question. Your lawyer should read each document before you commit to a closing date.