How do I verify a ski shop’s brand dealer accounts will carry over?
Dealer accounts usually belong to the shop on the brand’s terms, not to the seller to hand over. Ask the seller for each agreement, then contact each brand yourself, with the seller’s permission, to learn whether it will approve you. Make that approval a condition of the purchase.
Start with a list of every brand the shop carries and the paperwork behind each one: dealer agreement, pricing sheet, minimum orders and any territory or display requirements. Note which are exclusive and which are open. The brands that bring in the most customers matter most, so rank them by sales.
Brands often decide for themselves whether a new owner qualifies. Ask the seller to introduce you, or to let you call the rep. Find out what the brand wants to see: a business plan, financial statements, a store visit or a credit review. Ask whether the early-order terms and any rebates stay in place.
Check money owing both ways. Look at what the shop owes each brand and what rebates or credits are owed to the shop. Your lawyer can write the purchase agreement so the sale only closes if the key brands agree. If one important brand refuses, you will want to know before you commit, not after. Also ask whether any brand has recently changed its terms or pulled back its dealers. Keep a calendar of ordering windows and brand deadlines, because missing one after closing can strain a brand relationship before you have built any history with it.
Key takeaways
- Rank brands by sales and read each dealer agreement for transfer and approval terms.
- Speak to each important brand directly, with the seller’s permission.
- Ask your lawyer to make brand approval a condition of the purchase.
Related reading
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Due diligence
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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 CanadaGovernmentMajor pitfalls to avoid when negotiating a purchase agreement
- 03Business Development Bank of CanadaGovernmentWhat are accounts payable?
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