What changes if I buy a business in the same location as one I own?

Owning a business at the same location, or in the same trading area, changes the purchase in two ways. The business you are buying may compete with yours or sell to the same customers, which brings competition law into the deal. And you may want to merge the two sites or leases, which depends on the landlord and the lease rather than on you.

Competition law looks at overlap

The Competition Act defines a merger widely: acquiring control of, or a significant interest in, all or part of a business of a competitor, supplier, customer or other person. Filing is required only above set thresholds, but the Competition Bureau says it may review any merger regardless of size, asking whether competition would be substantially lessened or prevented in a relevant market. On the Commissioner’s application, the Tribunal can order a completed merger that substantially lessens competition dissolved, or assets or shares sold.

Merging sites runs through the lease

If you plan to move the acquired business into your premises, or to take over its premises as well, the leases decide what is possible. In Ontario, a clause barring assignment without the landlord’s consent is treated as subject to that consent not being unreasonably withheld, unless the lease expressly says otherwise, and a court can rule on a refusal. Other provinces differ. Read both leases before fixing a merger date.

Customers, staff and licences overlap

Customers who used both businesses may react when they see one owner, so ask the seller for sales by customer and by site before assuming revenue simply adds together. Ask the municipality and any industry regulator whether the acquired business’s licences and permits cover a combined operation. Single-location vs multi-location compares the two structures.