What should I check before buying a sewing machine dealership?

A sewing machine dealership is a retail business built on a relationship with one or more brands, plus a repair bench that keeps customers coming back. It is not a garment factory, and the checks are different. What you are really buying is the right to sell and service those brands in a territory, and the goodwill of customers who trust the shop to look after their machines.

The brand agreement and territory

Ask for the dealer agreement with each brand. Find out whether it can be transferred to a buyer, whether the brand must approve you, and what the territory covers. The brand may have its own training or standards for dealers. Ask the brand directly, get its answer in writing and have your lawyer read the agreement. A dealership without its brands is a very different business.

The service bench and its technician

Repair work is often what holds the customer base together. Ask who the technician is, how long they have worked there, what they are certified in, and whether they would stay with you. A skilled technician is hard to replace. Look at the backlog of machines waiting for repair, and at what parts and tools come with the sale.

Promises already made to customers

• Warranty and service commitments on machines already sold, and who stands behind them after the sale.
• Demo, floor and trade-in machines, and whether each is owned outright or held on the brand’s terms.
• Prepaid classes, service plans and layaway or deposit arrangements.
• Consumer financing offered through a lender, and whether that arrangement continues.

Ask your accountant how deposits and unfinished service jobs will be handled at closing.