What should I check before buying a fireplace and hearth store?

A fireplace and hearth store sells product, and a buyer should also check the people and permissions around it: the brands it is allowed to sell, the crews who put the units in, and the customers waiting on a job. A chimney service business is a different trade, covered in what to check before buying a chimney sweep business. This page is about the retailer-installer.

Manufacturer dealer agreements

Most hearth stores sell under dealer agreements with a few manufacturers. Ask to read each one. Look for territory, how long it runs, and whether the manufacturer must approve a new owner. A brand that carries the showroom can walk away at a change of ownership, so many buyers speak to the main suppliers, with the seller’s permission, before they finalize anything.

Showroom displays and install crews

Burning displays are part of the sales pitch, so ask who owns them and whether the manufacturer supplied them on loan. Then look at the install side. Are the installers employees or subcontractors? Who holds their tools and vehicles? If the best installer is also the owner’s cousin, find out whether that person plans to stay. Your lawyer can tell you how the crew arrangements are treated in a sale.

The fall order book and deposits

Hearth work tends to bunch up in the fall. Ask for the list of open orders, the deposits taken and the jobs promised for dates after closing. Customer deposits are money the business holds for work it has not yet done, so your lawyer and accountant should say how they are handled between you and the seller.

Warranty and service callbacks

Past installs can bring service calls. Ask how many callbacks the store handled in a typical year, whether the manufacturer reimburses warranty visits, and whether any complaint is open. Review the inventory count too, since display units and slow-moving stock are not the same as saleable stock. BDC’s guide to due diligence is a useful companion.