What should I check before buying a kitchen fire suppression company?
Before buying a kitchen fire suppression company, check how often restaurant customers close or change hands and what that does to the route, how the company wins work through hood cleaners and kitchen contractors, which manufacturer or distributor authorisations it holds and whether they transfer, and what parts it keeps in stock.
A kitchen suppression company services the systems fitted over restaurant cooking lines. Its customers are restaurants, cafeterias and institutional kitchens, which means its book moves with the restaurant trade. The sprinkler pages on Deavo do not cover this segment, so use them only for general checks. This page lists what is particular to kitchens.
Customer turnover
Restaurants close, move and change owners often. Ask for the customer list with the date each system was last serviced, and look at how many have gone since the previous owner’s last review. Ask how the company learns that a restaurant has been sold, and whether the new operator keeps the service. Ask whether the route adds customers from new openings or only shrinks.
Where the work comes from
Many suppression companies get their work through hood cleaning companies, kitchen contractors and equipment suppliers. Find out which of these send the most work, whether any referral arrangement is written down, and what happens if a referrer is bought or leaves. Speak to the biggest sources of work, with the seller’s consent, before you rely on them.
Authorisations, parts and people
Ask which manufacturers or distributors authorise the company to install and service their systems, and ask each one in writing whether that authorisation passes to a new owner. Check the parts stock and the age of the tools. Ask who the technicians are, what training they hold, and whether the owner does much of the work personally. Your lawyer can read any distributor agreement with you.
Related reading
15 pages on the same subject, grouped by topic.
Buying
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Selling
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
- 02National Research Council CanadaGovernmentNational Fire Code of Canada 2020
- 03Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
- 04Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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