Garage door and locksmith company due diligence

A buyer under a letter of intent can test a handful of assumptions: the calls will keep coming, the assets are free of other people’s claims, nothing is owed to a regulator, and the people and stock are what the seller says. Each assumption can be tested with a particular document or search. This guide lists them and what a bad result means. It assumes you have a lawyer and an accountant, because several of the searches below are provincial and the rules differ.

Test where the calls actually come from

Ask for call and job records by source for the past few years: search, paid ads, referrals, repeat customers. Then ask who controls each source. If calls drop once the seller’s ad accounts or phone number leave their hands, the revenue may not be the company’s own, so look for the evidence before closing, not after. Check the review history for gaps or sudden bursts, and ask the seller to walk you through every account with admin access shown on screen.

Search the registries for claims on the assets

Vans, tools and stock may be subject to a lender’s security interest. In Ontario, the Personal Property Security Act sets out when a security interest is perfected, including by registration, and the Ministry of Public and Business Service Delivery and Procurement runs a registry through which a lien can be searched. Other provinces run their own personal property registries; Saskatchewan’s Personal Property Registry, for example, has its own lien search on the ISC website. Search the seller’s legal name and any prior names, and ask your lawyer to require discharges at closing.

Confirm workers’ compensation is clear

Ontario’s WSIB says that a buyer or seller of a business’s assets should get a purchase certificate, that it must be requested before the date of sale and is valid for 30 days from the date of issue printed on it, and that without one it may hold the purchaser liable for amounts the vendor owes. WorkSafeBC says to contact it before buying assets because, if the seller owes unpaid premiums, the firm’s assets may be subject to a lien in its favour. WCB Alberta states a responsibility to get a clearance when buying a business, its stock or equipment. Whichever board applies, get the clearance, check its date against closing, and ask about open claims and the company’s classification.

Verify licences and staff checks

Ask which provincial rules apply to the locksmith side, then request evidence that each technician meets them. Ontario’s public registry confirms the licence status of an individual or agency for the services it regulates; ask whether the locksmith work falls within it, since the page does not name locksmiths. In Quebec, the Régie du bâtiment offers a licence holders’ repertory you can check. Where background checks are required or simply part of the company’s promise, request the records. A missing file is a finding in itself.

Which findings change the deal

Some results may reopen the price or end the process. Calls that fall away once the seller’s accounts and number are removed may mean the revenue was never the company’s. A registration against the vans or stock that the seller cannot explain may mean a lender holds a claim. An outstanding workers’ compensation balance may follow the assets to the purchaser. No licence or background-check evidence for staff in a province that requires it may leave you buying a compliance problem. Parts stock well below the books is a gap to raise in the price. For each finding, ask your lawyer whether it calls for a price change, a holdback, a closing condition or walking away.

Count the stock and read the contracts

Attend a physical count of springs, openers and cylinders, and compare it with the books. Read any franchise agreement for transfer conditions, fees and territory. Read vehicle leases, supplier terms and the lease on the shop or yard. Ask for insurance history and any claims arising from lockouts, damaged property or security incidents, because this work involves access to customers’ premises. Customer and job records also hold personal information, so agree with your lawyer how it is shared before closing.

• Call and job records by source, with proof of who controls each account and the main number
• Personal property registry searches for every legal and prior name, with discharges agreed for closing
• The applicable workers’ compensation clearance, dated close to closing, plus open claims
• Licence evidence and background-check records for each technician where the province requires them
• A physical parts count and the franchise agreement, leases and insurance claim history