How do I check the service contracts on a print shop’s digital presses?
Get a copy of every service agreement and read who covers what: parts, labour, consumables, and click or usage charges. Ask whether the agreement transfers to a new owner and what it costs to end it. Then check the service record to see how often the machine actually needed help.
List each press and attach its paperwork. For every agreement, note what it covers and what it leaves out. Some include parts and visits but not the supplies; others charge by volume printed. Read how renewal works and what notice is needed to end it, so there is no surprise charge after you take over.
Ask whether the contract can pass to a buyer or needs the supplier’s consent. Your lawyer should read the transfer and termination wording; do not guess at it. Also check for leased machines, where the lease may be the bigger commitment than the service.
Then test the machines against the paper. Ask for the technician’s visit history. Frequent calls to the same press suggest a tired machine, however good the contract looks. Speak to the operators about response times and how long breakdowns lasted. If a press is old, ask whether the maker still supports it, since a fine contract is little use if parts are gone. Add up what all the agreements cost across a full year, including usage charges, and compare that figure with what the shop actually earns from the presses. A heavy fixed cost on a lightly used press is a warning sign worth raising with the owner. Also ask when each agreement was last reviewed or renegotiated, and whether anyone has compared it with other providers.
Key takeaways
- Read what each agreement covers and what it leaves out.
- Ask your lawyer whether it transfers and how it ends.
- Compare the contract with the real visit history.
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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