How can I check an HVAC company’s dependency on one equipment brand?

Start with the numbers. A sales mix by brand shows whether the dependence is real or just a habit of talking about one name. Check the invoices behind the mix, and look at margins by brand if the seller tracks them. A single brand that brings most of the revenue deserves close attention to its terms.

Then read the arrangement itself. Is the company a dealer under a written agreement, and does it need the brand’s approval to continue under a new owner? Does the brand supply leads, rebates or financing offers to customers? Ask how much of the company’s reputation depends on the brand’s name, and how customers would react if the company switched.

Finally, ask about the technicians. Are they trained and certified on this brand’s equipment, and would retraining be needed for another? Ask what the brand would say about a change in ownership, ideally by meeting its representative. Your lawyer can read the dealer terms, and your accountant can confirm rebates and the effect on the statements. Ask what the company would do if a model were discontinued or supply tightened, and whether it has ever sold another line.

Key takeaways

• Break sales down by brand and test the figures against invoices.
• Read the dealer terms for consent, territory, minimums and what happens on a sale.
• Check technician training and meet the brand’s representative before closing.