Ready to Buy a Franchise or Business? Here’s What to Do Next

So, you’ve done your homework, evaluated your options and found the franchise or business opportunity that feels like the right fit. Now comes a crucial step: due diligence.

This next step is where your dream becomes a reality—and it’s important to approach it with a clear understanding and the right professional support. Here’s what to expect as you move closer to finalizing the deal.

Bring in the Pros

Purchasing a franchise or a business isn’t just a financial decision—it’s a legal and operational one too. That’s why it’s important to seek expert help.

• An Attorney who specializes in franchise or business law can help you navigate the legal side of the purchase. They’ll review and explain contracts, evaluate the terms of the franchise agreement and make sure your rights are protected.
• An Accountant will help you analyze the financial health of the business and assess the full cost of ownership—including taxes, operating expenses and potential revenue. Their insights can help you project profitability and make smart financial decisions.

With franchises, tax rules and legal obligations can be complex. Therefore, having a team of professionals on your side is important.

Key Documents to Review

With your legal and financial advisors by your side, you’ll want to carefully examine the documents that outline the details of the sale.

Here are the most important ones:

• Letter of Intent (LOI) -This outlines your interest in purchasing the business and sets the tone for formal negotiations.
• Nondisclosure Agreement (NDA) -Before you access sensitive financial or operational data, you may be asked to sign an NDA to protect the seller’s information.
• Contracts and Leases -Review all existing agreements with vendors, employees and landlords. These can affect your ongoing costs and obligations.
• Financial Statements and Tax Returns -These documents give insight into the business’s financial health, cash flow, liabilities and profitability.
• Sales Agreement -This finalizes the terms of the sale, as well as price, included assets and any warranties or representations.
• Purchase Price Adjustment -Sometimes the final purchase price is adjusted based on inventory levels, accounts receivable or other factors. Make sure these adjustments are clearly defined.

Take Your Time, Ask Questions

Buying a franchise or a business is a big investment. Use this opportunity to ask every question, review every number and read every word of your contracts. With the right preparation and a knowledgeable team by your side, you’ll be ready to step into ownership with confidence.

Partner with a Bank that Understands Businesses

At Bank of New Hampshire, we support aspiring business owners every step of the way. Our experienced commercial banking team can help you explore financing options tailored to your needs—so you can move forward with clarity and confidence.

Visit BNH.Bank to schedule an appointment.

Credit: U.S. Small Business Administration