What should I check before buying a bannered or franchised liquor store?

A store under a banner or buying group is a different purchase from an independent shop. Part of what you are buying is a relationship with the banner, and the store may not be able to keep the sign, the suppliers or the support without it. Ask the seller for the full agreement and every amendment, and read it with your lawyer before you read the sales.

What the banner requires

List the obligations: signage, fees, required purchasing, marketing contributions, store standards and reporting. Ask how each is charged and who audits compliance. Then ask the seller whether the store meets every standard today. A store that has fallen behind may carry a fix-up cost that you would inherit, so ask for any notice the banner has sent.

Consent, suppliers and rebates

Find out whether the banner must approve you, and what it asks of an applicant. Then look at supplier and rebate terms tied to membership. If the rebates or pricing belong to the member, check whether they carry over to you. A change of owner can change them. The difference between a banner and a franchise is explained in a related page, though the details vary by arrangement.

Leaving the banner

Ask what happens if you leave later. Look for exit fees, rules on removing signs, limits on competing nearby and the period during which the banner can still contact your customers. Whether franchise disclosure rules apply is a legal question, and your lawyer should answer it before you sign anything.

• The full banner agreement and amendments
• Whether the banner must consent to a new owner
• Rebates and supplier terms tied to membership
• Any compliance notices from the banner
• Exit terms and limits after leaving