RV dealership due diligence

Due diligence on an RV dealership has to work through more layers than a typical small-business purchase, because the inventory sits behind a floorplan lender’s security interest, the right to keep selling depends on manufacturers who are not party to the purchase agreement, and the buyer’s own eligibility depends on a provincial regulator’s separate review. A diligence plan built around these three layers, rather than the financial statements alone, catches the findings that actually matter in this sub-sector. None of these checks are unusual for a business this size, but the number of separate approving parties involved makes it easy to verify one layer thoroughly and assume the others are equally solid without actually checking.

Reconcile the floorplan before you trust the balance sheet

Request current floorplan lender statements and match them against a physical, unit-by-unit inventory count rather than relying on the book value carried in the financials. The finding that matters most here is a payout shortfall — inventory actually worth less than what is owed against it under the floorplan facility — because that changes the deal’s economics directly, not merely something to note and move past. Ask, too, whether any units have already been discounted below floorplan payout in anticipation of a season-end clearance, since that is a cost the current owner may be absorbing quietly rather than reflecting fully in the historical financials.

Pull the manufacturer file on every line the dealership carries

Request current standing correspondence for each manufacturer line, any outstanding facility-standard notices, and the sales or performance benchmarks the dealership is or is not currently meeting. A line already carrying an internal concern from the manufacturer is a materially different finding than a line in clean standing, even where neither has escalated to a formal termination notice, and it directly affects how confident you can be that your own approval for that line will go smoothly. Where a manufacturer has recently revised its facility or performance standards nationally, confirm the dealership has actually been measured against the current version rather than an older one that may no longer apply.

Verify the financing and warranty-administration relationships

Request documentation for the arrangements that support customer financing and warranty-claim processing, and confirm whether they are formal, assignable arrangements or informal relationships the outgoing owner maintained personally through years of dealing with the same contacts. An arrangement that exists mainly as a personal relationship is a finding worth pricing, not ignoring, because a new owner may need real time to rebuild the same level of service before customers and warranty processing run as smoothly as they did under the previous owner. Ask specifically who at the dealership actually manages these relationships day to day, since that person’s continued involvement — or departure — is itself a piece of information the seller may not raise unprompted.

The registrar search most buyers skip

Check the seller’s compliance history with the applicable provincial dealer registrar — the Ontario Motor Vehicle Industry Council in Ontario, or that province’s equivalent elsewhere — and be aware that the same registrar will be reviewing your own application in parallel. A complaint history attached to the business or to a principal is worth surfacing early, both because it may affect the transaction itself and because a manufacturer conducting its own review is likely to see the same history.

PPSA and execution searches against the floorplan collateral

Run a Personal Property Security Act search to confirm exactly what is registered against the inventory and equipment, and check that the floorplan lender’s registration matches what you were told rather than something broader. Pair this with execution and judgment searches against the corporation and against the seller personally, which catch claims that could attach to the assets you are about to buy. Where the seller has more than one lender registered against different asset classes, confirm each registration matches an actual, current debt rather than a stale filing nobody has bothered to discharge.

Facility and service department verification

Confirm the facility currently meets each manufacturer’s present-day standard rather than the standard in place when the line agreement was originally signed, since these standards get revised and a facility that qualified years ago may not qualify today. Separately, pull the service and warranty-administration claim history to test how much of the reported recurring service revenue is genuinely independent of new-unit sales volume, since some of it may be warranty-claim reimbursement tied to units the dealership sold itself.

Findings that most often kill or reprice a deal

• A floorplan payout shortfall discovered against the physical inventory count
• A manufacturer indicates it is unlikely to approve the buyer for one or more lines
• The provincial registrar flags either the buyer’s own application or the seller’s compliance history
• Facility limitations that cap achievable inventory and service volume below what the historical financials assume