How do I check a commercial cleaning company’s contracts before buying?

A commercial cleaning company is largely a bundle of contracts with property managers and building owners. If those contracts are short, unwritten or tied to the seller personally, the business may be smaller than it looks. Reviewing them site by site is the most useful work you can do before buying.

Cancellation and renewal terms

Note which sites are on fixed terms, which are month to month, and how much notice either side must give. A client who can leave on short notice is a client you must keep earning. Ask when each contract ends or renews, and whether any notices of cancellation or complaint have been received.

Rebids and consent to assign

Property managers may send cleaning work back out for quotes at set intervals. Ask which sites are due and what the seller knows. Then check whether each contract can be assigned to you or needs the client’s written consent, and ask the seller to arrange introductions.

Who holds the relationship

Find out who at each client chooses the cleaner and who the seller deals with day to day. If the owner is the main contact, plan a handover. Ask for client references, and ask which sites have supervisors the client already trusts.

Site-by-site cost and concentration

• Labour hours, supervisors and supplies for each site.
• Sites that look busy but earn little after their costs.
• Your largest accounts and how much of the work they represent.
• Insurance, bonding and security requirements the client imposes.

For the general rules, see whether customer contracts are transferable, and ask your lawyer to review the contracts.