Top 3 Issues Involved When Buying or Selling a Business

America is a nation of small business owners.  In fact, there are over 22 million of us.

Why do people want to go into business for themselves?  In surveys done several years ago, the number one response was the potential for higher income.  But now in the most recent survey, the top reason was “control of one’s own destiny.”  The change is most likely a reaction to the recent economic times.

More and more individuals are now viewing small business ownership as a viable alternative to the vagaries of corporate America.  As the founder of Sunbelt Business Brokers said recently, “There is no more job security.  The only job security you’ve got nowadays is the person looking at you in the mirror.”

As a business broker, I’m often asked about the issues involved in buying or selling an existing  business.  In my opinion, these are the top three issues:

1. Confidentiality

Confidentiality is critical to the successful transfer of a business.  If word gets out that a business is for sale, several things start happening and none of them are good for the seller or buyer of the business.  First, key employees start looking for other jobs, fearing that a new owner may not retain them.  In the uncertainty, customers may begin shopping elsewhere.  Suppliers get nervous.  Competitors can take advantage of the situation.

This is why a prospective business buyer will be asked to sign a non-disclosure confidentiality agreement early in the process of looking at a possible business acquisition. In this agreement, the potential buyer confirms that he/she will not disclose the fact that the business is for sale except to professional advisors.

If you show that you take the need for confidentiality seriously, you will be regarded as the professional that you are.

2. Valuation

Nothing causes the buyers and sellers of businesses more anxiety than the problem of valuation. The question of selling price haunts both parties. The seller doesn’t want to price his business too low and “leave money on the table.”  On the other hand, the buyer of the business is afraid he’ll pay too much and not get the best possible price.

Formal, fully documented business appraisals are now readily available.  In addition, there are rule of thumb guidelines that can be used to quickly estimate the value of a business.  As just one example, we know that a full service restaurant with liquor license is worth about 30% of its annual gross revenue as an ongoing business.  This assumes – big assumption – that the business is earning the average bottom line profit for its peer group.

There are rule of thumb guidelines for almost all categories of business from ice cream stands to manufacturing plants.  But again, these guidelines provide only quick estimates.  And written, fully documented business appraisals are now done by several respected national firms at a cost similar to real estate appraisals.

3. Financing

The toughest problem facing business buyers and sellers for the past three years has been financing.  No question about it.

These are five possible sources for business acquisition loans:

BANKS – Although most people seeking a loan to buy a business will think first of a traditional bank loan, I can tell you from years of business brokerage experience that banks generally do not make business acquisition loans.  There are exceptions but this is more true than ever in today’s economy.

SBA – The SBA, through its approved lenders, provides business acquisition loans.  The SBA does not make direct loans, but rather guarantees a portion of the loan that is made by the approved lender.   It’s known as the SBA 7(a) program.  Wells Fargo Bank is currently the top volume SBA lender nationally.

The SBA route for a business acquisition loan is sometimes frustrating because of the time and detail that is involved.  However, keep in mind that the SBA will approve loans that others have turned down and will usually approve them with a smaller down payment.  In most cases, it’s worth the wait.

FAMILY – Many times the older generation in a family will loan the down payment or the entire amount needed to a promising member of the family’s younger generation.  If your family is willing to loan you the money, one word of advice is in order.  Have a very clear understanding as to how the debt is to be handled and put it in writing in the form of a legal note.

THE SELLER – In the majority of the business transfers that I handle as a business broker, the owner of the business finances a portion of the purchase price for the buyer.  Some sellers cannot offer owner financing for a variety of reasons, but when they can, it conveniently solves the problem of financing.

The fact that the business owner is willing to finance the sale of his company provides more than a convenient finance plan.  More importantly, it provides a strong validation of the owner’s belief that the business will support the owner and earn enough cash to pay back the loan.  You can’t get any better recommendation on the business than this.

The normal down payment for owner financing ranges generally from around 30% to 50% of the purchase price of the business.  Interest rates are generally market driven but there is more flexibility here than in other forms of financing.

401(K) FUNDS AND IRA ACCOUNTS – The use of these funds to buy a business, without tax penalty, is a fairly recent development.  Several national CPA and attorney groups have developed a plan, approved by the IRS, which allows you to use your funds for business acquisition.  There are legal and accounting fees involved, but they are a small fraction of the tax penalty that would be assessed for cashing in these accounts early.

The above ­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­five sources of financing are not exclusive to each other.  I recently handled a transaction in which three of the five sources were used to buy the business.

It’s called creativity!

For further reading, here are additional related articles:

• How to Use Valuation Guidles to Estimate the Value of a Business
• How to Analyze a Business You’re Considering Buying
• How to Make a Written Offer to Buy a Business
• Seven Negotiating Rules When Buying of Selling a Business
• How to Conduct the Due Diligence When Buying a Business

And now for the ad.  (Hey, you don’t mind a promotional item stuck in here, do you?)  You can take a look at the businesses I have listed for sale at www.WilliamBruce.net.

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William Bruce is an Accredited Business Broker and Appraiser assisting buyers and sellers of privately held businesses in the transfer of ownership.  His practice includes consulting services nationwide to business owners and buyers. 

 

His article on how to analyze a business that you may be interested in buying can be read by clicking here.  He may be reached at (251) 990-5934 or by email at WilliamBruceOnline@gmail.com.  His business brokerage website may be viewed at www.WilliamBruce.net.

 

 

Follow @WilliamBruce

Some Franchises Are Not Qualified for SBA Guaranteed Loans

The following information and long list of franchises that are are ineligible for SBA financing are taken directly from the Small Business Administration website at http://www.sba.gov/content/franchise-findings.  Note that franchise transfer issues are the most commonly cited problem in disqualifying franchises for SBA financing.

Quoting the SBA:

SBA attorneys have assembled a listing of Issues of Eligibility they have identified in various franchise/license/dealer/jobber or similar agreements (Agreements), which SBA calls Franchise Findings.  This list contains the names of those franchises and systems that have requirements in their Agreements that could cause the business to be ineligible for SBA Financial Assistance.  This list is made available for use by Lenders/CDCs in evaluating the eligibility of a small business that operates under an Agreement. This list is only a guide and is not a substitute for a full review of the Agreement.

The issues listed on the Franchise Findings list reflect SBA’s rules, regulations and SOPs in effect at the time of the attorney’s review. Agreements are constantly updated and changed; therefore, the items on the list may no longer be an issue in the current version of an Agreement. There may, however, be other issues that have not been identified on the list. If you have a specific issue which you need to discuss please contact local SBA District Counsel.

Agreement Name	Type of Agreement	ISSUES
10 til 2 Franchising	Franchise Agreement	1. Transfer
1-800 Home Services	Franchise Agreement	1. Transfer 2. Appraiser Issue
1-800 Plumber	Franchise Agreement	1. Transfer; 2 Appraiser Issue;3. Franchisor determines permenant disability
7-Eleven	Franchise Agreement	1. Transfer   2. Excessive Fees  3. Require receipts to be deposited in Franchisor Account.  4 Franchisor owns assets of business. 5. Franchisor provides payroll services for franchisee and employess. 6. Appraiser Issue
Aaron’s Rent	Franchise Agreement	1. Transfe 2. Possible passive business
Ace Hardware	Brand Agreement	1. Transfer
ADECCO	Franchise Agreement	1. Franchisor controls hiring of franchisee’s employees. 2. Franchisor provides payroll services franchisee’s employees
Affiliated Foods	Franchise Agreement	1. Transfer
AKP International, Inc.	Franchise Agreement	1. Transfer
Al & Ed’s Autosound	Franchise Agreement	1. Step In; 2. Apprasial; 3. Right of First Refusal on a Partial Transfer
Alamo Drafthouse Cinema	Franchise Agreement	1. Franchisor determines permenant disability
Alfy’s (Olsen Franchise Group)	Franchise Agreement	1. Transfer
All American Finance	Franchise Agreement	1. Franchisor controls the receipts and billing
Allen Oil Co	Dealer Agreement (Gas)	1, Transfer
Allstate	Agent Agreement	1. Transfer
AmCheck	Franchise Agreement	1. Step In Issue ;2. Franchisee remains liable after transfer.
American Express	Franchise Agreement	1. Transfer; 2. Franchisor contorls the hiring of franchisee’s employees in some cases
American Family Insurance	Agent Agreement	1. Franchisor controls hiring of franchisee’s employees. 2. Transfer
American Honda	Dealer Agreement	1.Transfer
Ameriprise Financial	Franchise Agreement	1. Transfer
Anago franchising	Franchise Agreement	1. Transfer
Anytime Fitness, Inc.	Franchise Agreement	Franchisor controls the receipts and billing services for the franchisee
Apple Spice Junction	Franchise Agreement	1. Transfer. 2. Appraiser Issue
ARCO/AM PM	Dealer Agreement (Gas)	1. Transfer; 2. Step In Rights; 3. In Real Estate Transactions, ARCO records a Deed Restriction which requires that the property only be used for the Sale of ARCO Branded Gasoline -
Arena Sport	License Agreement	1. Transfer
Arizona Fuel Distributors	Dealer Agreement (Gas)	1. Transfer
Arizona Pizza Company	Franchise Agreement	1. Appraiser Issue
Ashland Petroleum LLC	Dealer Agreement (Gas)	1. Purchase Option for real estate
Ashley Homestore	Franchise Agreement	1. Transfer
Assist-2-Sell, Inc.	Franchise Agreement	1. Transfer
Associated Wholesale	License Agreement	1. Transfer
AT&T Exclusive Dealer Agreement	Dealer Agreement	1. Transfer
Atlanta Bread Company	Franchise Agreement	1. Appraiser Issue
Atlas Oil Co	Dealer Agreement (Gas)	1. Transfer
Atlas Van Lines	Dealer Agreement	1. Transfer
Auto Apprasial Network	Franchise Agreement	1. Transfer; 2 Step In; 3. Franchisor determines permanent disability; 4. Right of First Refusal on a partial transfer
Auto Check	Franchise Agreement	1. Transfer
Auto Driveaway Co. Agency Agreement	Franchise Agreement	1. Required receipts to be deposited into franchisor’s account
Auto Star Licensing	License Agreement	1. Transfer
Avon	License Agreement	1. Multi Level Sales Arrangement (pyramid sale distribution plan)
B&G Milkway	Franchise Agreement	1. Transfer
Baby’s Room USA	Franchise Agreement	1. Step In Issue
Backyard Burgers	Franchise Agreement	1. Transfer
Bally’s Fitness	Franchise Agreement	1. Franchisr controls the receipts and billing services for the franchisee
Bar Louie Development	Franchise Agreement	1. Transfer
Barnie’s Coffee & Tea Company, Inc.	Franchise Agreement	1. Appraiser Issue
Barrick Ent.(Mobil)	Dealer Agreement (Gas)	1. Transfer
Beadniks	Franchise Agreement	1. Transfer. 2. Franchisee remains liable after transfer
Bear Creak Coffee	Franchise Agreement	1. Transfer
Beard Papa’s	Franchise Agreement	1. Transfer 2: Apprasial
Bee Hive Homes	Franchise Agreement	1. Step In Issue. 2. Purchase option for Real Estate
Bellacino’s	Franchise Agreement	1. Step In Issue
Bellair Express	Franchise Agreement	1. Transfer
Belzona Inc.	Jobber Agreement	1. Transfer
Best Value Inn	Franchise Agreement	1. Transfer
Biggy Coffee	Franchise Agreement	1. Indemnification Issues
Bikram’s Yoga College of India	Franchise Agreement	1. Transfer
Billy McHale’s	Franchise Agreement	1. Transfer
Black Bear Diner	Franchise Agreement	1. Transfer
Blinds Mart	Franchise Agreement	1. Transfer
BMW of North America	Motorcycle Dealer Agreement	1. Transfer
BNI	Membership Agreement	1. Transfer;2 Excessive Fees;3 Possible Development Agreement Issues
Bo Concepts	Franchise Agreement	1. Transfer. 2. Step In Issues
Bobby Salazars	Franchise Agreement	1. Appraiser Issue. 2. Step In Issues
Bob’s Big Boy	Franchise Agreement	1. Franchisee remains liable after transfer
Bonfare Markets	Franchise Agreement	1. Franchisor handles all of Franchisees accounting including tax returns and payroll. 2. Franchisor percures and maintaines the required insurance coverage for the franchisee. 3 Apprasial
Boomer McLoud	Dealer Agreement	1. Apprasial Issue
Boston Pizza	Franchise Agreement	1. Transfer Issue  2. Apprasial Issue. 3. Purchase option for Real Property. 4. Step In Rights
Boyett Petroleum	Dealer Agreement (Gas)	1. Transfer
BP	Dealer Agreement (Gas)	1. Transfer; 2. Dealer sets net profit; 3. Brand Covenant Restrictions in some cases; 4. Dealer/Jobber in some cases ownes the equipment
BP Amco Contract Supply Agreement	Dealer Agreement (Gas)	1. Transfer
Bridgestone	Dealer Agreement	1. Transfer
BrightStar Healthcare	Franchise Agreement	1. Step In Issues
Bruster’s Real Ice Cream	Franchise Agreement	1. Transfer
Budget Host Int’l	Membership Agreement	1. Transfer
Bull Market, Inc.	Jobber Agreement	Transfer 2: Agreement does not include language which allows reasonable transfer;
Bumper Man	Franchise Agreement	1. Franchisor handles the billing services for the franchisee
Burkett Oil	Dealer Agreement (Gas)	1. Transfer
Butterfly Life	Franchise Agreement	1. Apprasial Issue
Caffino	Franchise Agreement	1. Right of first refusal. 2. Transfer. 3. Step In Rights
California Tortilla	Franchise Agreement	1. Franchisor has the ability to determine permenant disability
Cam’s Pizzeria	Franchise Agreement	1. Transfer. 2. Franchisor has the ability to contorl the sale of the business
Cannon Office Imaging Retail Dealer	Dealer Agreement	1. Transfer. 2 Franchisee remains liable after tranfer
Canteen Vending Services	Franchise Agreement	1. Appraisal Issue
Captain D’s Restaurant	Franchise Agreement	1. Transfer
Cargill Pork	Distributor Agreement	1. Transfer
Carl’s Jr.	Franchise Agreement	1. Transfer
Carlson Wagonlit	Franchise Agreement	1. Possible Excessive Liquidated damages
Carnett’s Franchising	Franchise Agreement	1. Apprasial Issue
Carribean Petroleum LP	Dealer Agreement (Gas)	1. Transfer
Carrier Transicold	Dealer Agreement	1. Transfer
Carthage vision Clinic	Franchise Agreement	1. Transfer
Car-X	Franchise Agreement	1. Apprasial Issue. 2 Purchase Option for Real Estate. 3. Step In Issue
Case Corporation	Dealer Agreement	1. Transfer
Cash Plus	Franchise Agreement	1. Transfer. 2. Appraiser Issue
CB Tax	Franchise Agreement	1. Transfer
Cellcom	Agent Agreement	1. Transfer
Cena Franchising	Franchise Agreement	1. Transfer
Central Bark Doggie Daycare	Franchise Agreement	1. Step In Rights
Century 21	Franchise Agreement	1. Transfer
Certified Oil Company	Dealer Agreement (Gas)	1. Transfer
Charter Practices International, LLC	Franchise Agreement	1. Agreement allows the franchisor to control the hiring of agent’s employees. 2.  Receipts deposited into account controlled by franchisor. 3. Transfer. 4. Franchisor controls the accounting for franchisee
Cheeburger Cheeburger	Franchise Agreement	1. Appraisal Issue
Chester Fried Chicken	Franchise Agreement	1. Transfer
Chevron	Dealer Agreement (Gas)	1. Transfer;2 Brand Covenant;3. ROFR contains language for partial transfer; 4. Purchase Option
Chicken Dijon	Franchise Agreement	1. Transfer; 2 Step In; 3 Franchisor requires a purchase option on real estate; 4. Franchisor requires payment of purchase of assets by a carry back Note; 5. UCC Issue
Chicken Express	Franchise Agreement	1. Transfer. 2. Step In Issues. 3. Security Interest Issue
Chicken Kitchen	Franchise Agreement	1. Transfer. 2. Appraiser Issue
Chico’s Int’l Tecate Grill	Franchise Agreement	1. Transfer. 2. Secuirty Interest Issue. 3. Franchisor has an option for the purchase of Real Estate
Chuck e  Cheese	Franchise Agreement	1. Transfer. 2. Appraiser Issue
Chuy’s Mesquite Broiler’s	Franchise Agreement	1. Transfer
Chyten Education Center	Franchise Agreement	1. Transfer; 2 Step In
Cindy’s Cinnamon Rolls	Franchise Agreement	1. Transfer;2 Step IN Rights; 3 Apprasial Issues
Citgo/Clipper Petroleum	Dealer Agreement (Gas)	1. Transfer; 2. Brand Covenant/Deed Restriction Issues
City Looks Salon	Franchise Agreement	1. Franchisee remains liable after transfer
CKO Kickboxing	Franchise Agreement	1. Transfer; 2. Step In Rights
Clarion Inn (Choice)	Franchise Agreement	1. Transfer
Cleaners Depot	Franchise Agreement	1. Step In Rights; 2. Franchisee continues to remain liable after transfer
Cleaning Authority	Franchise Agreement	1. Transfer
Cleannet USA	Franchise Agreement	1. Transfer
CleanStay USA, Inc.	Franchise Agreement	1. Transfer
Cleats Restaurant	License Agreement	1. Transfer
Clothes Mentor	Franchise Agreement	1. Step in Issues
Club Car	Distributor Agreement	1. Transfer
Club One Fitness Centers	Franchise Agreement	1. Transfer 2. Franchisor has ability to  direclty control hiring and firing employees.
Colbert-Ball Tax Service	Franchise Agreement	1. Transfer; 2. Step In Rights
Coldwell Banker	Franchise Agreement	1. Transfer
Comet Cleaners	Franchise Agreement	1. Transfer
Convenient food Mart	Franchise Agreement	1. Step In Rights
Cost Cutters	Franchise Agreement	1. Franchisee remains liable after transfer
Counter Custom Built Burgers	Franchise Agreement	1. Purchase Option for real estate
Country Inn & Suites	Franchise Agreement	1. Transfer – Reasonable Business judgment issues
Country Kitchen	Franchise Agreement	1. Transfer. 2. Franchisee remains liable after transfer
Country Waffles, Inc.	Franchise Agreement	1. Transfer. 2. Appraiser Issue
Coverall Services, Inc.	Franchise Agreement	1. Franchisor controlls billing services for franchisee
Creating Wellness	Franchise Agreement	1. Transfer
Creno’s Pizza Co.	Franchise Agreement	1. Apprasial Issue
Culligan	Franchise Agreement	1. Transfer
D.Vine	Franchise Agreement	1. Franchisor determines permenant disability
D.W. Drum Workshop	Distributor Agreement	1. Transfer
Daily Brew	Franchise Agreement	1. Transfer
Dairy Queen  (Please note there are multiple Dairy Queen Agreements for different locations – some of these have  been approved on the Franchise  Registry – you need to check the specific location for your agreement)	Franchise Agreement	1. Transfer 2. Franchisee remians liable after trasnfer
Dalworth Clean	Franchise Agreement	1. Franchisor controls money, clients and bookings
Dash In Food Stores	Franchise Agreement	1.Agreement calls for excessive franchise fees (50%). 2. Agreement calls for all receipts to be deposited into a common account servicing a number of franchise locations and controlled by franchisor. 3. Agreement allow the franchisor to pay the employees of the franchisee.4. Franchisor leasses the equipment to franchisee
Dashing Divas	Franchise Agreement	1. Transfer; 2. Liquidated Damanges
Dealer Specialties	Distributor Agreement	1. Step In Issues
Diedrich Coffee	Franchise Agreement	1. Transfer
Del Rancho Restuarants	Franchise Agreement	1. Transfer
Del Sol	Franchise Agreement	1. Transfer
Del Taco	Franchise Agreement	1. Apprasial Issues
Delta Powersports Inc	Dealer Agreement	1. Transfer
Dennys	Franchise Agreement	1. Transfer. 2. Appraiser Issue. 3. Credit Card Issue; 4. Franchisee remains liable after transfer
DHL	Agent Agreement	1. Transfer
Dial Oil Co.	Dealer Agreement (Gas)	1. Transfer
Dickey’s BBQ	Franchise Agreement	1. Apprasial Issue. 2. Permanent Disability determined solely by franchisor
Digital Zone	Franchise Agreement	1. Apprasial Issue
Discovery Point Child Developmnt Ctr	Franchise Agreement	1.  Transfer. 2. Apprasial Issue
Dish Network	Agent Agreement	1. Transfer  2. Franchisor controlls the biling for franchisee.
Do It Best Corporation	Membership Agreement	1. Transfer
Doctor’s Express	Franchise Agreement	1. Transfer
Dollar Rent a Car	Franchise Agreement	1. Overbroad indemnficiation agreement
Ducati North America	Dealer Agreement	1. Transfer
Duncan Oil, Co.	Dealer Agreement (Gas)	1. Transfer
Dysarte Service	Franchise Agreement	1. Transfer
Eastern Petroleum	Dealer Agreement (Gas)	1. Transfer; 2. Possible Environmental Indemnficiation Issues
EDT Learning	Franchise Agreement	1. Transfer
Eggspectation	Franchise Agreement	1. Transfer; 2. Apprasial Issues
El Chico Restaurant	Franchise Agreement	1. Transfer. 2. Step In Issues
El Pollo Loco	Franchise Agreement	1. Apprasial Issues
Elements for Women	Franchise Agreement	Transfer 2: Franchisee must supply “affidavit” and “Floor Plan” as noted in the SOP as the franchise appears to cater to one gender.
Englert LeafGuard	Dealer Agreement	1. Transfer Issues
Entrée Vous Kitchens	Franchise Agreement	1. Transfer. 2. Apprasial Issues. 3. Step In Issues
Entrepreneurs Source (The)	Franchise Agreement	1. Transfer
Environmental Control	Franchise Agreement	1. Receipts deposited into account controlled by franchisor
Epicor Software	License Agreement	1. Transfer; 2. Franchisor controls the billings
ERA Real Estate .	Agent Agreement	1. Transfer
Erie Insurance Group	Agent Agreement	1. Transfer
Esso Standard Oil	Dealer Agreement (Gas)	1. Transfer
Estrella Insurance	Agent Agreement	Excessive Control  1(d) Receipts deposited into account controlled by franchisor
Expert Heating and Cooling	Dealer Agreement	1. Transfer
Express Personnel Services **	Franchise Agreement	1. Temporary Employment Agency where Franchisee hires the employees on their payrol. 2. Franchisor controlls the billing for the franchisee
Extreme Pizza	Franchise Agreement	1. Transfer; 2. Step In
Exxon	Dealer Agreement (Gas)	1. Transfer; 2. Brand Covenant/Deed Restriction Issues
ExxonMobil Oil Corp	Dealer Agreement (Gas)	1. Transfer; 2. Brand Covenant/Deed Restriction Issues
Farm Bureau Life Insurance Company	Agent Agreement	1. Transfer
Farmer’s Insurance	Agent Agreement	1. Transfer. 2. Apprasial Issues
Fatburger	Franchise Agreement	1. Transfer
FedEx Ground	Agent Agreement	1. Transfer
Fed-Ex Home Delivery	Agent Agreement	1. Transfer
Firestone	Distributor Agreement	1. Transfer
Firestone Building Products	Distributor Agreement	1. Transfer
Firkin Pubs, LLC	Franchise Agreement	1. Permanent disability determined solely by franchisor
Fish City Crill	Franchise Agreement	1. Permanent disability determined solely by franchisor
Five Guys Burgers	Franchise Agreement	1. Permanent disability determined solely by franchisor
Flooring America	Dealer Agreement	1. Transfer
Foster’s Grille	Franchise Agreement	1. Step In Rights Issues
Fuddrucker’s	Franchise Agreement	1. Transfer
G & G Oil Co.	Dealer Agreement (Gas)	1. Transfer
Gambinos Pizza	Franchise Agreement	1. Apprasial Issue
Gateway Station LLC	Dealer Agreement (Gas)	1. Transfer; 2. Dealer/Jobber controls net profits
Geico	License Agreement	1. Transfer; 2. Licensor controls bank account
Gene’s Seafood of America	Franchise Agreement	1. Transfer
Gente Linda	Franchise Agreement	1. Transfer
George Weston Bakery	Franchise Agreement	1. Transfer issue on death of franchisee
Getty Petroleum	Dealer Agreement (Gas)	1. Transfer
Gillison’s Variety Fabracation	Dealer Agreement	1. Transfer
Gioninos Pizzeria	Franchise Agreement	1. Transfer
Gloria Jeans Gormet Cofffee	Franchise Agreement	1. Transfer
GMAC Real Estate Franchising	Franchise Agreement	Transfer 2: Agreement does not include language which allows reasonable transfer;
GN Hearing Care Corp	Franchise Agreement	1. Transfer
GNC (General Nutr Center)	Franchise Agreement	1. Transfer
Godfather’s Pizza	Franchise Agreement	1.Transfer
Gold Star Chili	Franchise Agreement	1. Transfer; 2 Excessive Royalty Fees
Golden Corral Franchising System	Franchise Agreement	1. Transfer: 2. Apprasial Issue; 3. Franchee remains liable after transfer
Golden Spoon	Franchise Agreement	1. Transfer
Golden Spoon	Franchise Agreement	1. Transfer
Golfsmith	Distributor Agreement	1. Transfer
Goodyear	Distributor Agreement	1. Transfer
Gracie Barra	Franchise Agreement	1. Transfer
Grand Harbour License	License Agreement	1. Appraiser Issue
Grand Rental Station	Franchise Agreement	1. Transfer
Grand Traverse Pie	Franchise Agreement	1. Transfer
Great Florida Insurance	Agent Agreement	1. Transfer; 2. Franchisee remains liable after transfer
Green Cactus Grill	Franchise Agreement	1. Step In Rights; 2. Franchisor controls decision of Physian
Growmark, Inc.	Distributor Agreement	1. Transfer
Gulf	Dealer Agreement  (Gas)	1. Franchisee remains liable after transfer
Gulshan  Enterprises, Inc.	Jobber Agreement	1. Franchisor Sets Net Profits; 2. Transfer
H&R Block Tax Serv.	Franchise Agreement	1.Excessive Royalty Fee. 2. Transfer Restriction – property can only be used for an H&R business operation.
Haagen-Dazs (The)	Franchise Agreement	1. Transfer
Hallmark	Franchise Agreement	1. Transfer
Halo Candle	Distributor Agreement	1. Transfer
Hampton Inn	Franchise Agreement	1. Transfer; 2. Apprasial
Hampton Inn & Suites	Franchise Agreement	1. Transfer
Hand & Stone Massage Spa	Franchise Agreement	1. Transfer
Hardees	Franchise Agreement	1. Transfer
Harley-Davidson Motorcycles	Dealer Agreement	1. Transfer
Health Force	Franchise Agreement	1  Receipts deposited into account controlled by franchisor; 2. Franchisor controlls the payment of taxes and payroll
HealthCare Recruiters	Franchise Agreement	1. Receipts deposited into account controlled by franchisor; 2. Franchisor controlls the billing services
Healthy Subs	Franchise Agreement	1. Transfer
Herdrich Petroleum	Dealer Agreement (Gas)	1. Transfer
Heritage Home Health	Franchise Agreement	1. Apprasial Issue
Hess	Dealer Agreement	1. Transfer
Hilton Inns	Franchise Agreement	1. Transfer
Home 2 Suites by Hilton	Franchise Agreement	1. Transfer
Home Vestors	Franchise Agreement	1. Ineligible business operation due to investment reasons.
Home Video System Franchise	Franchise Agreement	1 Transfer
Honey Baked Hams	Franchise Agreement	1, Transfer
Hooters	Franchise Agreement	1. Ineligible business practice
Host Communications	License Agreement	1. Transfer
Hotbox Pizza	Franchise Agreement	1. Transfer
Hotstuff Foods Inc	Franchise Agreement	1. Transfer
HuHot Mongolian Grill	Franchise Agreement	1. Step In Rights
IGA, USA, Inc.	Distributor Agreement	1. Transfer
Illico Inc	Jobber Agreement	1. Transfer
Image Arts Etc.	Franchise Agreement	1. Transfer
Independent Wholesale	Distributor Agreement	1. Transfer
Intero Real Estate Services	Agent Agreement	1. Transfer
Interstate Batteries	Distributor Agreement	1. Transfer; 2. Apprasial; 3. Franchisor has the right to control property owned by franchisee.
Invisable Fence	Dealer Agreement	1. Transfer
Iowa Wireless	Agent Agreement	1. Transfer
J. C. Penny Catalog	Franchise Agreement	1. Transfer; 2. Franchisor has the right to control funds
Jack in the Box	Franchise Agreement	1. Step In
Jackson Hewitt Tax Services	Franchise Agreement	1. Transfer
Jacksons Sports Grill	Franchise Agreement	1. Transfer
Janbury Franchise	Franchise Agreement	1. Franchisor has controll over the hiring of employees.
Jani-King	Regional Franchise Agreement	1. Ineligible due to the fact that it is an development agreement
Jani-King	Franchise Agreement	1. Transfer; 2. Franchisor controlls all billing and payment services; 3. Franchisor determines permanent disability;4. Franchisor contorls the contracts and receipt of funds
Jan-Pro Cleaning Systems	Franchise Agreement	1.  Require applicant to deposit all receipts into account which F’or controls orfrom which withdrawals may be made only w/ F’or’s consent.; 2.  Excessive fees; 3. Possible development agreement issues; 4 Franchisor has direct involvement in the everyday business operation; 5. Franchisor has the right to control franchisee’s customers.
Java Dave’s Inc	Franchise Agreement	1. Transfer
Java Station, LLC	License Agreement	1. Transfer
Java’s Brewin Shoreline	Franchise Agreement	1. Transfer; 2. Step In Issues
Jazzercise, Inc	Franchise Agreement	1. Transfer
Jersey Mike’s	Franchise Agreement	1. Transfer; 2. Step In Issues; 3. Franchisor determines perminate disability
Jimmy John’s	Franchise Agreement	1. Step In Issues
John L. Scott, Inc.	Franchise Agreement	1. Transfer; 2. Franchisor has the right to control property owned by franchisee
John Robert Powers	Franchise Agreement	1. Transfer
Johnny Rockets	Franchise Agreement	1. Step In Issues
Jones Oil Co., Inc.	Dealer Agreement (Gas)	1. Transfer
Jumpin Juice & Java	Franchise Agreement	1. Transfer; 2. Step In Issues
Jumping Party	Franchise Agreement	1. Transfer
Jungle Quest Franchising	Franchise Agreement	1. Transfer
Kalolgie Skin Care	Franchise Agreement	1. Transfer
Keeway Motors	Dealer Agreement	1. Transfer
Keller Williams	Agent Agreement	1. Transfer; 2. Apprasial
Kelly’s Cajun Grill	Franchise Agreement	1. Transfer
Kelly’s Fudge	Franchise Agreement	1. Transfer
Kemp Associates	Agent Agreement	1. Transfer
KFC	Franchise Agreement	Transfer 2: Agreement does not include language which allows reasonable transfer; 2. In some cases the agreement contains an option to enter into a franchise agreement.
Kocolene Marketing	Jobber Agreemenet	1. Transfer
Kooler Ice	Franchise Agreement	1. Transfer
Kubota Tractor	Dealer Agreement	1. Transfer
Kudo Beans	Franchise Agreement	1. Step In Issues; 2. Franchisor controls perminate disability determination
Kumon Math and Reading Center	Franchise Agreement	1. Escessive Royalty Fees
Kyoto Bowl	Franchise Agreement	1. Apprasial Issue
Kwality Ice Cream	License Agreement	1. Transfer
La -Zy Boy	Distributor Agreement	1. Transfer
Lady of America		1. Transfer; 2. Excessive Royalty Fees; 3. Franchisor controlls billing and collection services for the franchisor; 4. Step In Rights; 5. Apprasial Issues;  6.Possible Women only facility and franchiee would have to provide proof that they will not discreminate and proof to two bathrooms
LaMar’s Donuts	Franchise Agreement	1. Transfer; 2. Step In Issue
Lampost Pizza	Franchise Agreement	1. Step In
Laptop Xchange	Franchise Agreement	1. Apprasial Issue
Larson Glastron Boats	Dealer Agreement	1. Transer
Le Bleu Corp	Distributor Agreement	1. Transfer
Le Peep License Agreement	License Agreement	1. Transfer
Leo’s Coney Island	Franchise Agreement	1. Transfer; 2. Apprasial
Lil’Kickers	License Agreement	1. Transfer
Link Staffing Franchise	Franchise Agreement	1. Franchisor controls the franchisee’s billings and payroll
Little Ceasers	Franchise Agreement	1. Transfer; 2. Franchisor requires senior lien on all personal property collateral
Lloyd Staffing	Franchise Agreement	1. Excessive Royaltys;2 Franchisor controlls the billing services;3. Franchisor controls emoloiyees
Long John Silver’s	Franchise Agreement	1. Transfer
Long Wong’s	Franchise Agreement	1. Transfer
LSAA LLC	Jobber Agreement	1. Transfer
LunchStop, Inc.	Franchise Agreement	1. Franchisor owns all M&E  – and leases to franchisee
Macs Convenience Store	Franchise Agreement	1. Transfer
Madmoe Corporation	Distributor Agreement	1. Step in Rights
Mahon Distribution	Distributor Agreement	1. Transfer
MaidPro Franchise	Franchise Agreement	1. Transfer
Maid-Rite Corp.	Franchise Agreement	1. Step In Rights
Mainstay Suites	Franchise Agreement	1. Transfer
Maple Ridge Health	Franchise Agreement	1. Transfer; 2. Step In
Marathon	Dealer Agreement (Gas)	1.  Transfer
Marathon Gas	Dealer Agreement (Gas)	1. Restrictive Covenant
Marble Slab Creamery	Franchise Agreement	1. Transfer;2 Apprasial
Massage Envy	Franchise Agreement	1. Transfer
Master Shield Gutter Protection	Dealer Agreement	1. Transfer
MasterCraft Boats	Dealer Agreement	1. Transfer
Mastic Spa	Franchise Agreement	1. Transfer
Mayflower	Agent Agreement	1. Transfer
Mazzio’s Italian Eatery	Franchise Agreement	1. Franchisor determines permenant disability
McAlister’s Deli	Franchise Agreement	1. Step In Rights
McCullough /CITGO	Dealer Agreement (Gas)	1. Brand Covenant/Deed Restriction Issues
McDonalds	Franchise Agreement	1. Transfer; 2. Step In; 3 Franchisor requires existing franchsiee to remain liable once the franchise has been assigned
McPherson Oil	Dealer Agreement (Gas)	1. Transfer
MellowMushroom Pizza	Franchise Agreement	1. Transfer
Menchies	Franchise Agreement	1. Transfer; 2 Apprasial
Mercury Marine	Dealer Agreement	1. Transfer
Midias	Franchise Agreement	1. Transfer
Miki House	Distributor Agreement	1. Transfer
Mobil Oil	Dealer Agreement (Gas)	1. Transfer
Moe’s Italian Sandwiches	Franchise Agreement	1. Step In Issue
Monical’s Pizza	Franchise Agreement	1. Franchisee remains liable after transfer
Monster Mini Golf	Franchise Agreement	1. Transfer
Monterey Boats	Dealer Agreement	1. Transfer
Moorehead Communications	Dealer Agreement	1. Transfer
Mossy Oaks Prop.	Franchise Agreement	1. Transfer
Mountain West Farm Bureau Mutual	Agent Agreement	1. Transfer
Mr. Greek, LLC	Franchise Agreement	1. Franchisor determines permanent disability
Mr. Payroll	Franchise Agreement	1. Transfer; 2. Possible Eligiblity Issues regarding percentage of business related to check cashing
My Friend’s Place	Franchise Agreement	1. Apprasial  Issue
NAPA	Distributor Agreement	1. Transfer
Nathan’s Famous	Franchise Agreement	1. Transfer; 2. Apprasial
Nathan’s Frank and Fry	License Agreement	1. Transfer
National Tenant Network	Franchise Agreement	1. Step In Rights
Nationwide Insurance	Agent Agreement	1. Transfer
Nationwide Lifts	Franchise Agreement	1. Transfer; 2. Apprasial
Nature’s Table	Franchise Agreement	1. Step In Rights
New Tech Touch up System	Dealer Agreement	1. Transfer
Nissan Fork Lift	Dealer Agreement	1. Transfer
Nitro Fitness	Franchise Agreement	1. Possible eligiblity issue – men only fitness center – will need to compy with the SOP requirement of Affidavit and diagrammed layout with two sepearte bathrooms
Noco	Distributor Agreement	1. Transfer
Norrel Services	Franchise Agreement	1. Franchisor controls billings and payroll; 2. Excessive fees; 3. Franchisor hires and controls the employees ; 4. Excessive liquidated damages
Northwest Mutual	Agent Agreement	1. Transfer
Nothing Bundt Cakes	Franchise Agreement	1. Transfer; 2. Step-In Rights
Nutrishop	Franchise Agreement	1. Transfer
O’Charley’s	Franchise Agreement	1. Transfer
Olivier	Distributor Agreement	1. Transfer
On the Grill Franchising Corp	Franchise Agreement	1. Apprasial Issue
Open2View.com	Franchise Agreement	1. Step In Issues; 2. Franchisor requires receipts to be deposed into franchisor’s account; 3 Franchisor sets prices. 4. There are two separate agreements types, these comments relate to the real estate type agreement
Orange Tree Hot Dogs	Franchise Agreement	1. Transfer
Oreck Sales	Dealer Agreement	1. Transfer
Original Pancake House	Franchise Agreement	1. Franchisor maintains ability to purchase or lease real estate owned by franchisee
Original Pizza Pan	Franchise Agreement	1. Transfer
Overhead Door	Distributor Agreement	1. Transfer
Owens Corning	Distributor Agreement	1. Transfer
P. Jays Pizza	Franchise Agreement	1. Transfer
Pacific Cycle	Distributor Agreement	1. Transfer
Palace Resorts	Franchise Agreement	1. Transfer
Papa’s Pizza to Go	Franchise Agreement	1. Step In Issue
Parable Christian Stores	Franchise Agreement	1. Ineligible business  – Non franchise related
Park Hospitality	Franchise Agreement	1. Transfer
Park Inn	Franchise Agreement	1. Transfer
Party Land	Franchise Agreement	1. Apprasial Issues; 2. Step In Rights
Pat’s Pizza, Inc.	Franchise Agreement	1. Transfer
Paul Mitcehll Partner School	Franchise Agreement	1. Transfer issues on death and disability
Perkins Pancakes / Restaurant & Bakery	Franchise Agreement	1. Transfer 2. In some cases the agreement contains an option agreement which is not acceptable.
Perko’s Café	Franchise Agreement	1. Apprasial Issue; 2. Step In Rights
Permapave	Distributor Agreement	1. Transfer
Pettit Oil Company		1. Transfer
Philips 66	Dealer Agreement (Gas)	1. Transfer; 2. Dealer /Jobber has the right to control the price
Pik-a-Pop	Franchise Agreement	1. Transfer
Pillar to Post	Franchise Agreement	1. Transfer; 2. Apprasial Issues; 3. Step In Rights
Pioneer H-Bred	Distributor Agreement	1. Transfer
Pizza Guys	Franchise Agreement	1. Transfer; 2. Franchisee remains liable after transfer
Pizza Hut, Inc.	Franchise Agreement	1. Transfer
Pizza Pan	Franchise Agreement	1. Transfer
Planet Fitness	Franchise Agreement	1. Transfer
Play Date Drop in Child Care	Franchise Agreement	1. Step In Rights
PM Terminals, LLC	Jobber Agreement	1. Transfer
Polaris	Dealer Agreement	1. Transfer – Reasonable Business judgment issues
Port of Subs, Inc.	Franchise Agreement	1. Step In Rights; 2. Post Transfer Liability for Franchisee
Powell’s Sweet Shoppe USA LLC	Franchise Agreement	1. Transfer
Powerhouse Gym	Franchise Agreement	1. Transfer
Premier Garage	Distributor Agreement	1. Transfer
Premier Learning Center	Franchise Agreement	1. Apprasial Issue
Premier Rental Purchase	Franchise Agreement	1. Transfer
PrimoHoagies	Franchise Agreement	1. Apprasial Issue
Professional Auto Spa	Franchise Agreement	1. Transfer
Proforma	Franchise Agreement	1. Franchisor controls the franchisee’s billings and receipts
Prometric Testing Centers	Franchise Agreement	1. Franchisor controls the franchisee’s billings and receipts
Prudential	Agent Agreement	1. Transfer; 2. Franchisor controlls the franchisee’s billings and receipts.
Quality Tune-up Shops	Franchise Agreement	1. Security Interest Issue; 2. Franchisor has right to approve 3rd party loans including SBA loans
Quik Stop Markets	Franchise Agreement	1. Franchisor controlls the franchisee’s billings and receipts; 2. Franchisor owns all M&E and franchisee is required to lease
Radio Shack	Franchise Agreement	1. Transfer
Radisson Hotel	Franchise Agreement	1. Transfer; 2. Death or Disability Issue; 3. Reasonable Business Judgment Rule
Rascal’s Comedy Clubs	Franchise Agreement	1. Transfer; 2. Post trasnfer liability for franchisee
Raymond James Financial Services	License Agreement	1. Transfer
RE/MAX	Franchise Agreement	1. Transfer
Real Deals, Inc.	Franchise Agreement	1. Apprasial Issue
Red Lion Hotel	Franchise Agreement	1. Transfer
Red Mango	Franchise Agreement	1. Transfer
Red Robin	Franchise Agreement	1. Transfer; 2 Development Issues
Remedy Intelligent Staffing	Franchise Agreement	1. Franchisor controlls billing services for franchisee; 2. Franchisor controlls the employees;
Residence Inn by Marriott	Franchise Agreement	1. Trnasfer – Reasonable Business Judgment Issues 2. Deed Restriction Issue
Residential Pacific Mortgage	Franchise Agreement	1. Franchisor controlls billing services for franchisee
Rocky Rococo	Franchise Agreement	1. Apprasial; 2. Post transfer liablity for transferee
Roly Poly Franchise	Franchise Agreement	1. Transfer; 2. Step In rights
Romio’s Pizza	Franchise Agreement	1. Step in rights
Romp N Roll Franchise	Franchise Agreement	1. Step In rights
Roosters	Franchise Agreement	1. Transfer
Rosati’s Pizza	Franchise Agreement	1. Transfer; 2. Step In rights; 3. Apprasial
Rosie O’Grady’s Irish Pub	Franchise Agreement	1. Transfer
Roto Rooter	Franchise Agreement	1. Transfer; 2 Post transfer liability for transferee
Round Table Pizza	Franchise Agreement	1. Step in rights
Ruby Tuesdays	Franchise Agreement	1. Franchise
Rug Décor	Franchise Agreement	1. Transfer
Russo’s NY Pizza	Franchise Agreement	1. Apprasial Issue
Salvatores	Franchise Agreement	1. Transfer
Sam Snead’s Tavern	Franchise Agreement	1. Transfer
Samsung America	Franchise Agreement	1. Transfer
Samuel Mancino’s Italian Eatery	Franchise Agreement	1. Transfer
SAV-A-LOT, LTD	Franchise Agreement	1. Transfer
Scooter’s Coffee House	Franchise Agreement	1. Apprasial Issue
Scotts LawnService	Franchise Agreement	1. Purchase Option for real estate
Seagrave	Distributor Agreement	1. Transfer
Sedona Staffing Services	Franchise Agreement	1. Transfer; 2. Franchisor controlls employees; Franchisor controlls franchise billings and services; 2. Franchisor controls disability determination.
Sgt Peppers Chicken	Franchise Agreement	1. Step In Rights
Shape Up Sisters	Franchise Agreement	1. Step in rights
Sharkey’s	Franchise Agreement	1. Transfer; 2. Apprasial
Shave it Nation	Franchise Agreement	1. Transfer
Shell Oil	Dealer Agreement (Gas)	1. Transfer; 2. ROFR Contains unacceptable provisions; 3. Liquidation Damages recorded against the Real Estate
ShipOnSite	Franchise Agreement	1. Transfer
Signs by Tomorrow	Franchise Agreement	1. Transfer; 2. Apprasial; 3. Step in rights
Sinclair Oil	Dealer Agreement (Gas)	1. Transfer
Sizzler USA	Franchise Agreement	1. Transfer
Skewers	Franchise Agreement	1. Transfer
Sky Taxi	Franchise Agreement	1. Franchisor controlls billings services/payroll for the franchisee; 2. Franchisor controlls employees
Slender Lady	Franchise Agreement	1. Possible ineligible business – non-franchise related; 2. Transfer
Snap Fitness 24-7	Franchise Agreement	1. Transfer; 2. Franchisor controlls the franchisee’s billings and receipts.
Snap-on Tools	Franchise Agreement	1. Transfer
Snelling and Snelling	Franchise Agreement	1. Franchisor controlls the franchisee’s billings and receipts;
Soccer Post	Franchise Agreement	1. Transfer; 2. Apprasial;. 3 Step In Rights
Soho Hero	Franchise Agreement	1. Transfer
Sotheby’s International Realty	Franchise Agreement	1. Transfer
Southern Tsunami	Franchise Agreement	1. Franchisor controlls the franchisee’s billings and receipts.
Spectrum Home Services	Franchise Agreement	1. Transfer; 2. Step in rights
Speedy Car-X, Inc.	Franchise Agreement	1. Apprasial Issue
Spherion Workforce Architects	Franchise Agreement	1. Franchisor controlls the franchisee’s billings and receipts; 2. Franchisor controlls the employees
Sprint	Agent Agreement	1. Transfer
Stagecoach Pizza	Franchise Agreement	1. Step In Issues
Star mart	Dealer Agreement (Gas)	1. Transfer
State Farm	Agent Agreement	1. Transfer
Steak Escape	Franchise Agreement	1. Transfer. 2. Step In Rights Issues
Stop N’ Save	Franchise Agreement	1. Franchisor controlls the franchisee’s billings and receipts;
Streets of New York	Franchise Agreement	1. Transfer
Stride Rite	Franchise Agreement	1. Transfer
Strings Italian Café	Franchise Agreement	1. Apprasial; 2. Step in rights
Sunbelt Business Brokers Network	Franchise Agreement	1. Transfer
Sunoco	Dealer Agreement (Gas)	1. Transfer; 2. Receipts deposited into Dealer/Jobber’s account;3. Purchase Option; 4. Restrictive Covenant
SunShine RV, LTD	Franchise Agreement	1. Step in rights
Super America	Franchise Agreement	1.  Transfer
Super Petroleum Inc	Dealer Agreement (Gas)	1. Brand Covenant/Deed Restriction Issues
Superior Tool Sales	Distributor Agreement	1. Transfer
Superiour Walls of America	Franchise Agreement	1. Transfer; 2. Apprasial
Suzuki	Dealer Agreement	1. Transfer
Sweet Candy Franchise LLC	Franchise Agreement	1. Transfer; 2. Apprasial
Taco Bell	Franchise Agreement	1. Transfer
Taco Mayo	Franchise Agreement	1. Step In rights
Tan World	Franchise Agreement	1. Transfer
Taylor Rental	Franchise Agreement	1. Transfer
TBS Petroleum, LLC	Dealer Agreement (Gas)	1. Transfer
Team 21 Franchise	Franchise Agreement	1. Transfer
Teavana	Franchise Agreement	1. Transfer
Tesoro	Jobber Agreement	1. Transfer
Texaco	Dealer Agreement (Gas)	1 Transfer; 2. Restrictive Covenant
The Greene Turtle	Franchise Agreement	1. Franchisor determines permanent disability; 2. Apprasial; 3. Step In
The Meat House	Franchise Agreement	1. Transfer; 2. Apprasial
The Old Spaghetti Factory	Franchise Agreement	1. Transfer
The Pasta House Co.	Franchise Agreement	1. Step In Rights; 2. Franchisee continues to remain liable after transfer
The Tutoring Cente	Franchise Agreement	1. Step In Issues
Thomas Petroleum	Dealer Agreement (Gas)	1. Transfer
Thrifty Nickle	License Agreement	1. Franchisor controlls the franchisee’s employees; 2 Affiliation Issues; 3Apprasial Issues;4 Transfer;5
Tilted Kilt	Franchise Agreement	1. Ineligible business pracitce
Tim Horton’s	Franchise Agreement	1. Transfer;2 Franchisee containues to remain liable after tranfser; 3. Franchisee needs franchisor’s consent to obtain security interest.
Time Oil	Dealer Agreement (Gas)	1. Transfer
Tire Factory	Franchise Agreement	1. Transfer
T-Mobil	Agent Agreement	1. Transfer
Tom’s Foods, Inc.	Franchise Agreement	1. Apprasial Issues
Tony Roma’s	Franchise Agreement	1. Apprasial Issues
Too Hottiest	Franchise Agreement	1. Ineligible business practices;2.Transfer;3. Franchisor controls billing services
Tosco / Union 76	Dealer Agreement (Gas)	1. Transfer; 2. Appraisal Issue
Toshiba America	Dealer Agreement	1. Transfer
Town Place Suites by Marriott	Franchise Agreement	1. Transfer(reasonable business judgement issues)
Trane Company	Distributor Agreement	1. Transfer
TRAQ Ltd	Franchise Agreement	1. Transfer2. Step In rights
TriVision Energy, LLC	Dealer Agreement (Gas)	1. Transfer
TriVision Energy, LLC	Dealer Agreement (Gas)	1. Transfer
Truck Options	Franchise Agreement	1. Apprasial Issues
True Value	Membership Agreement	1. Trnasfer
TSO Marketing, Inc.	License Agreement	1. Transfer
Tutti Frutti	Franchise Agreement	1. Transfer
Twirl Inc	Franchise Agreement	1. Transfer
U.S. Lawns, Inc.	Franchise Agreement	1. Apprasial Issues
U.S. Pizza Company	Franchise Agreement	1. Transfer
Umbria Pizzeria	Franchise Agreement	1. Step In Issues
Union 76 Branded Reseller Agreement	Dealer Agreement (Gas)	1. Transerr
Union Distributing Company	Jobber Agreement	1. Transfer
Union Distributing Company	Dealer Agreement (Gas)	1.Transfer; Receipts deposited into Dealer/Jobber ‘s Account
Unique Pizza	Franchise Agreement	1. Transfer
United Hardware	License Agreement	1. Transfer
Vagabond	Franchise Agreement	1. Transfer
Valentino’s of America	Franchise Agreement	1. Apprasial Issue
Valero Refining Company	Dealer Agreement	1. Transfer; 2. Dealer (borrower) remains liable after transfer
Velocity Sports Performance	Franchise Agreement	1. Transfer; 2 Appraisl Issue
Verizon Wireless	Agent Agreement	1. Transfer
Village Coffee	Franchise Agreement	1. Transfer
Vintner’s Cellar	Franchise Agreement	1. Transfer; 2. Apprasial
Vision Source	Franchise Agreement	1. Transfer; 2. Apprasial
Voo Doo BBQ & Grill	Franchise Agreement	1. Apprasial;2 Franchisee remains liable after transfer
Wachovia Security Financial Network, LLC	Agent Agreement	1. Transfer;2 Franchisor has ability to close out accouts.
Wahoo’s Fish Taco LLC	Franchise Agreement	1. Transfer
Wellcraft Marine	Dealer Agreement	1. Transfer
Wendy’s	Franchise Agreement	1. Apprasial; 2. Franchisor has the ability to purchase the real estate
Wheat Montana	Franchise Agreement	1. Transfer
Wheaton Van Lines	Agency Agreement	1. Transfer
Wheel Repair Solutions Intnl., Inc.	Dealer Agreement	1. Transfer; 2. Apprasial Issues.
Which Which	Franchise Agreement	1. Franchisor determines permanent disabiltiy
Whiskey Creek	Franchise Agreement	1. Step In Rights Issues
White House Chicken	Franchise Agreement	1. Step In Rights
Wienerschnitzel	Franchise Agreement	1. Transfer
Wine Loft	Franchise Agreement	1. Apprisal; 2. Framchisee containes to remaine liable after transfer; 3. Franchisor determines permanent disability
Wings To Go	Franchise Agreement	1. Step In Rights
Wolford America, Inc	Franchise Agreement	1. Transfer
World Gym	Franchise Agreement	1. Transfer
Xerox Corporation	Distributor Agreement	1. Transfer
Yamaha Motor Corp	Dealer Agreement	1. Transfer
Yogurtland	Franchise Agreement	1. Step In Rights
Yogart Mountian	Franchise Agreement	1. Apprasial
Zeus	License Agreement	1. Transfer
Zodiak Boats	Dealer Agreement	1. Transfer

Business-for-Sale Activity Spikes in First Quarter

BizBuySell.com, the Internet’s largest business-for-sale marketplace, has released its latest economic data for the first quarter of 2013. The latest data shows that closed transactions spiked up by 56 percent in the first quarter of the year when compared with the same period last year. The results are based on aggregate business-for-sale transactions reported by participating business brokers nationwide.

In total, 1,897 closed transactions were reported in the first quarter of  2013, a dramatic bump over the 1,218 recorded in the same period of 2012. The number represents the highest number of businesses sold in a quarter since the second quarter of 2008. The 56% year-over-year jump is also the largest such increase since small business sales bottomed out in mid-2008.

Across the board for all industries, the average selling price was 2.2 times the company’s discretionary cash flow or approximately 60 percent of gross annual revenue.

The spike in small business sales can be attributed to a number of factors.

For a few years now, small businesses financials have been improving as the economy slowly recovers. Business owners who have been looking to exit their business, particularly baby boomers ready to retire, finally have their businesses in sellable shape and are more confident that they will receive an appropriate financial return on their sale. This proved true in the first quarter of 2013 as the median sale price of a sold business was $180,000, the highest level since 2009.

Business transaction fundamentals are strong with a latent supply of owners ready to sell and improving buyer demand due to ongoing unemployment, recovering stock portfolios and the slowly improving lending situation. Just last month a BizBuySell.com survey of national business brokers found that 75.2 percent of respondents said they are seeing the same or more deals getting done as compared to 2012. When asked about the number one factor causing the increase, the top two answers were the increase in the number of interested buyers and the increase in the number of owners looking to sell.

As the stock market and overall economy have improved, so have the financials of small businesses across the country. According to the data, the median cash flow of a small business sold in the first quarter of 2013 reached $100,000, a 20.45 percent increase from the same quarter in 2012. Median revenue also improved, jumping from $360,000  to $401,213 from the same quarter last year, an 11.45 percent increase.

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William Bruce is a business broker, an Accredited Business Intermediary and a business appraiser.  His practice includes consultations nationally on matters involving business valuations and transfers.  He may be reached at (251) 990-5934 or by email at WilliamBruceOnline@gmail.com.  His business brokerage website may be viewed at www.WilliamBruce.net.

How to Sell Your Business: Getting Your Business Ready to Sell

This series of articles covers the issues involved in selling your business.  In our last article, we discussed possible reasons for selling your business and the importance of being able to give a legitimate reason for the sale.

This time we’ll talk about getting your business ready to sell.  The time, effort and expense that you expend in getting your business ready to take to market will pay handsome dividends. Don’t underestimate the crucial importance of preparation.

Your Location

In short, spiff up the place! Start first with curb appeal. Stand back and take an objective look at your business location as you approach from the street. Look critically and make a list of the things that need attention. Prune the overgrown shrubs, haul off the trash, clear the sidewalks, paint the building. Do whatever you need to in order to give a good first impression.

Even in the sale of a business, first impressions really do count. You might think that business buyers would normally concentrate on the profit and loss statement to the exclusion of appearance, but some prospective buyers that I’ve worked with were just never able to get over a shoddy look when they turned into the parking lot.

On the other hand, I’ve had some buyers tell me they knew from the moment they saw the business that it was the one they wanted. And this was before they saw any of the financials! The first impression was just that good.

Next, go inside your business with the same critical eye and clean it up. Get all those files off the floor and back into the cabinets. Steam clean the carpets and wax the floors. Paint the dirty walls. Replace the light bulbs. Put inventory on the shelves. In summary, make the place look neat and inviting. After all, the prospective buyer is trying to convince himself that your business is where he ought to spend the next ten to twenty years. Make it easy for him to picture himself enjoying the nice, neat, bright environment of your business.

In summary, there is just no sense in taking the chance of getting off on the wrong foot with an otherwise good prospect because of a poor appearance. This is one phase of the selling process that you can control one hundred percent. Take control, and turn it to your advantage.

Your Books

Business buyers – and their lenders – will expect, at some point in the process, to see at least three years of your financial statements and tax returns. As we’ll discuss later, you should not give these records to every Tom, Dick and Harry; however, qualified prospects who have signed a confidentiality agreement will expect to be able to review the financial performance of the business.  Accordingly, you should make sure that all of your financial statements and tax returns are up to date.

Which brings us to a real problem. Your profit and loss statements and tax returns, if they are like the books of most privately held businesses, don’t show much profit. They may even show a loss.  It’s because – let’s see, how shall I delicately say this – most business owners do not keep books to pay income taxes. In fact, most business owners make strenuous efforts to write down any profits. You may be making an excellent living out of your business, but you’re taking advantage of all available possibilities to reduce the profit that you show Uncle Sam.

As an example, take the sale of a large restaurant that I recently handled.  The profit and loss statement from the business was actually showing a small loss.  However, the owner’s wife drove a Lincoln Navigator which was listed on the books of the business as a company vehicle. The company also paid for all her gas and maintenance on the Navigator although she has no role in the operation of the restaurant. Same for the daughter’s Honda which she drove back and forth to college.  The daughter was also on the payroll as an employee of the restaurant which furnished her with spending money at college, although she never actually worked at the restaurant. The family ski vacation to Colorado was charged to the business  because the owner attended a business meeting for a couple of hours while in Aspen.

You see where I’m heading here, don’t you? By the time all these items plus any non-cash expenses were accounted for, the restaurant was actually producing a nice yearly cash flow for the family.  (Hey, I’m not with the IRS and don’t express an opinion here!)

But the situation presents a problem for a potential buyer of the business. The owner’s bookkeeping practices camouflage the actual cash producing ability of the business. The solution for someone selling his or her business is the cash flow worksheet.

Computing Cash Flow

So first let’s define cash flow. Some business brokers refer to it as owner’s discretionary cash  flow or ODCF. Owner’s discretionary cash flow is defined as that amount of cash that the business produces in a year’s time that is available (1) to pay back any debt that the owner of the business incurred to buy the business, and (2) for the owner’s compensation.

Another way to express it is that ODCF is the amount of cash the business produces after all necessary operating expenses – and only the absolutely necessary operating expenses –have been deducted.

This process of computing cash flow is referred as the recasting or normalizing of income. In recasting a profit and loss statement, this is the procedure that is used to compute ODCF:

• Start with the company net profit (or loss) as shown on the profit and loss statement or tax return.
• Add any non-cash deductions that have been taken such as depreciation and amortization. (These are “paper deductions” allowed by the IRS for which no check is written.)
• Add any interest expense (because you will be selling the assets free and clear so the buyer will not incur this expense. It will be available for his debt service, if any.)
• Add the owner’s salary and perks (because this amount will be available to the new owner for his own compensation.
• Add any family perks (cars, vacations, non-working employees, etc) that have been run through the business as a business expense.
• Add any one-time, extraordinary expense items that will not be routinely incurred again (such as a major repair bill).

The total of these items will give prospective buyers a more accurate assessment of the cash producing ability of your business and is referred to as owner’s discretionary cash flow (ODCF).

You should have a cash flow worksheet prepared for each of the last three years, plus an interim worksheet for the current year. If you’re using a business broker, he has a form and software for quickly producing this report. But he’ll need your help in identifying the items on your P&L that are not necessary business operating expenses, so plan on sitting down with him and assisting in this project.

There is one more point I need to make here before we leave the subject of cash flow. If you have had cash income that you cannot prove, just remember that this is part of the owner’s income that you have already benefited from and, if you can’t prove it, then it cannot be reflected in your selling price.

Now that you’ve spiffed up the place and cash flow has been computed, we’re ready to talk about how to value your business, which will be covered in the next article.

How to Sell Your Business: First, Have a Good Reason

Selling Your Business

The decision to sell your business may not be easy.  In fact, it may be agonizingly difficult.

You probably have an emotional attachment to the business.  Over the years, you have attracted a lot of customers and developed many friendships among them.  You have also hired and trained a talented group of employees who look to you for their very livelihoods.

And in America, people are identified by how they make their living. Your identity is directly tied to your business, so it’s no wonder that the decision to part with your business is difficult.

But things change.  And at some point in their life, most business owners decide, for good reasons, that the time has come to sell their business.

One of the motivations for writing this is that many business owners have told me the same thing.  They say that once they make the decision to sell, they don’t have a very clear idea of how to go about it.  They have spent their business lives managing their company – and in most cases doing a very good job of it – but they have never actually sold a business. It’s definitely a different “ballgame.”  Selling a business in today’s business environment is a major project fraught with many pitfalls. It can be compared to a narrow path winding through a field of landmines. The issues are numerous including pricing, confidentiality, offers, negotiations, financing, due diligence, taxes, and government regulations to name just a few.

Professional advice and assistance to guide you through the minefield is the best “insurance policy” you will ever buy.  But then, I’m prejudiced.  You see, I have one of the best jobs in the country.  In case you haven’t yet guessed, I’m a business broker!

In this series of articles, I’ll be discussing various issues involved in the sale of a business.  More will be posted later, but my first piece of advice to an owner considering selling his or her business is: “Have a good reason.”

This may seem obvious.  However, it’s important to be able to give a good reason for selling your business. The very first question most prospective buyers ask is “Why is the business for sale.”

Buyers are naturally suspicious.  For most, buying a business will be the most important financial decision they will make in their lifetime, and because of it, they will have a heightened level of anxiety about the whole situation.

Some of the business buyers with whom I’ve worked in the past have expressed the thought that if a business is for sale, there must be something wrong with it.  This is not always the case, of course, and being able to answer this concern with a logical response will be of tremendous value in the sales process.

There are valid reasons that some very good privately held businesses are for sale.  The first reason most people would think of is retirement.  Another is the fact that the owner may be experiencing health problems which prevent him or her from managing the business as usual.

Other reasons may involve estate planning situations in which the owner would rather leave liquid assets that can be split more easily among several heirs than a business entity.

Still other legitimate reasons could involve friction among the owners.  This kind of situation can become particularly serious if the friction is among family members who jointly own the business.  I recently handled the sale of a business in which the real motivation to sell was to prevent further deterioration of the family relationships.  The differences among the partners were serious enough that they would surely have led eventually, if they stayed in business together, to an ugly family split-up.  The partners correctly decided that it was better to sell the business and preserve the family.  Each partner took their portion of the cash from the sale and went their separate ways.  And now they are still congenial when they get together at Thanksgiving and Christmas!

Perhaps the most common reason that a business is for sale is one that might not be readily apparent.  But as a business broker, I see it frequently.  And I’ll simply label it as “burn out.”  After an owner has operated the same business for a number of years, some just plain get burned out.  Some people are more prone to burn out than others.  It’s highly subjective but certainly understandable.

On a personal note, I experienced it a previous business that I owned.  After twelve years, when it got to the point that I hated seeing customers come in the front door because I knew I’d have to spend time with them, I knew it was time to get out!  Burn out is real and I see a lot of it.

So in summary, be able to give a good reason for selling your business.  It’ll get you started off on the right foot.

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William Bruce is a business broker, an Accredited Business Intermediary and a business appraiser.  His practice includes consultations nationally on matters involving business valuations and transfers.  He may be reached at (251) 990-5934 or by email at WilliamBruceOnline@gmail.com.  His business brokerage website may be viewed at www.WilliamBruce.net.

The Business of Beer

“Without question, the greatest invention in the history of mankind is beer.  Oh, I grant you that the wheel was also a fine invention, but the wheel does not go nearly as well with pizza.”                       -Dave Barry

Beer is a huge worldwide business.  With pleasant memories of Oktoberfest, an event involving copious quantities of beer, I thought we might take a moment to look at the business side of the brew.

Beer is the world’s most widely consumed and probably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea.

Interestingly, the Czech Republic is the world’s largest per capita consumer of beer.  Folks there each consume 42 gallons per year of the brew.   In second place – no surprise – is Ireland where those jolly folks annually drink 32 gallons per person. Rounding out the top five counties in consumption are Austria, Germany and Romania.

The United States actually ranks 15th in the world in per capita consumption.  We each quaff an average of 21 gallons of beer per year which is slightly more than the average American person drinks in milk.

Within the U.S. it’s surprising that the top three states in per person consumption of beer are New Hampshire, Montana and North Dakota. What gives with that?  It’s cold as the dickens in those states.  You would think that the hottest states would be the top consumers.  My personal consumption skyrockets in August to help me survive the dreaded month in Alabama.

As you might imagine, the citizens of the Mormon dominated state of Utah consume the least amount of beer.  I’ll give you 10 to 1 odds that Mitt Romney never, ever in his whole life enjoyed a brew (although there is no doubt that it would help him assuage his recent defeat).

The largest beer company in the U.S. by far is Anheuser-Bush, brewers of Budweiser,  which has captured 48 percent of the market.  MillerCoors is in second place with 29 percent of the American market.  The remainder of the market is scattered among smaller brewers with Pabst at three percent of the market and my favorite, Yuengling, garnering one percent market share.

Anheuser-Busch Companies, Inc. was an American brewing company which operated 12 breweries in the United States and 18 in other countries.  In 2008, Anheuser-Busch was acquired by InBev, a large Belgian and Brazilian brewer for $52 billion. The acquisition created the world’s largest brewer, uniting the maker of Budweiser and Michelob with the producer of Beck’s, Stella Artois, Hoegaarden, Leffe, Bass, Labatt and Brahma. The combined companies have yearly sales of more than $36.4 billion.

Not everyone was pleased with the sale of Anheuser-Bush to InBev.  Shortly after the sale, one industry watcher said, “Within six months, InBev turned a family-led company that spared little expense into one that is focused intently on cost-cutting and profit margins, while rethinking the way it sells beer.”

Anyway, if I run into you in the neighborhood beer joint, maybe you could buy me a beer during my next elbow aerobics class!

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William Bruce is a business broker, Accredited Business Intermediary, business appraiser and beer drinker.  He may be reached at WilliamBruceOnline@gmail.com or (251) 626-4949.  His business brokerage website may be viewed at www.WilliamBruce.net.

American Metro Areas Ranked Best to Worst for Economic Vitality

The latest rankings of “On Numbers Economic Index” computed by The Business Journal contain some interesting information.

The index is computed monthly by The Business Journal, a unit of Advance Publications Inc.  Advance, headquartered in Staten Island, New York, also publishes the Newhouse Newspapers including the recent seven-to-three-days-a-week New Orleans Times Picayune, the Mobile Press Register and the Birmingham News.

The index ranks America’s largest 102 metropolitan areas for overall economic vitality using an 18-point formula that accounts for private sector job growth, unemployment, housing price changes, earnings, construction activity and retail sales.

For January, the top ten ranked metro areas in economic vitality were:

• Oklahoma City
• Austin
• Houston
• Columbus
• Tulsa
• Provo, Utah
• Honolulu
• Omaha
• Pittsburgh
• Des Moines

The state with the most metro areas listed in the top 20 was Texas with Austin at number 2, Houston at number 3, Dallas-Fort Worth at number 12 and San Antonio listed at number 19.

Since the metro areas are ranked monthly by The Business Journal, the movement within the list from month to month may be more revealing of the relative vitality the various markets.

The metro with the most impressive upward movement in the rankings for January was Chattanooga.  The Chattanooga market leapfrogged an amazing 20 places on the list from its December position to rank at number 29 overall in January.  Also impressive was New Orleans which moved up 18 spots to number 35, and Baton Rouge which had the third largest gain on the list by jumping 16 slots to be ranked at number 16 overall on the list of 102 metro areas.

The metro areas that fell the most from the December to the January rankings were Buffalo NY, Allentown-Bethlehem PA, Grand Rapids MI, Greenville SC, and Columbia SC.

The bottom five markets on the list overall for economic vitality were Jacksonville FL, New Haven CN, Riverside-San Bernardino CA, Colorado Springs CO and the very worst metro of Providence RI.

To find your metro area’s ranking, here’s a link to the complete list.

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One Year After the Carnival Shipwreck Off Italy, We Take a Closer Look

It’s been one year since Carnival’s ship, the Costa Concordia, ran aground off the coast of Italy.  The ship remains on her side, half submerged just yards off the the tiny Italian island of Giglio.

The disaster left 32 people dead, and hundreds of others injured.

The captain of the cruise ship, Francesco Schettino, a philanderer, alleged coward and proven liar remains free.  He has not been charged with any crimes yet but is living with court restrictions while Italian authorities consider whether to indict him.

Schettino is now saying he “slipped or fell” into one of the first lifeboats, a “fall” which allowed him to leave thousands of passengers and crew members to fend for themselves.  He has also said he wasn’t in command when the ship ran aground.  But the recovered “black box” shows that he was.

The Costa Concordia is ultimately owned by Carnival Corporation, also the parent company of  Carnival Cruise Lines.  The shipwreck disaster has prompted us to take a closer look at the company.

Carnival Corporation and  PLC (its sister corporation) comprise eleven individual cruise line brands, operating a combined fleet of 96 ships.  Brands include Carnival, Cunard, Holland America, Princess, Seabourn and four others.

Carnival Corporation was initially formed in 1972.  After achieving its position as one of the world’s most popular cruise lines, the company made an initial public offering of 20% of its common stock in 1987. This provided an influx of capital that allowed the company to begin its expansion through acquisitions. In 1989 its first acquisition was the premium operator Holland America Line.  Others quickly followed.

The CEO and owner of controlling interest in Carnival is Micky Arison, son of the founder.  Arison was born in Israel of Romanian ancestry and now lives in Miami as an American citizen.  Forbes lists him as one of the world’s wealthiest individuals.  His compensation from Carnival in 2009 was over $7 million.

In 1988, Carnival Cruise Lines expanded into airlines with the purchase of Pacific Interstate Airlines, which was subsequently renamed Carnival Air Lines.  This venture ended ten years later in bankruptcy court with creditors holding the bag.

Carnival owner, Micky Arison, also owns the professional basketball team, Miami Heat.  Miami area governments built Arison a $250 million dollar waterfront stadium 10 years ago in exchange for a rental agreement.  Now 10 years into the rental contract, thanks to creative accounting by Arison, Miami has received no rent from the Heat or Arison, according to a columnist for the Miami New Times.

Then there is the fact that Carnival Cruise Lines shafted the City of Mobile, Alabama for $20 million.  After enticing the city to spend over $20 million for a cruise ship terminal facility, Carnival left town without even the good manners of a courtesy notice to local leaders.  It was a “Wham bam, thank you m’am” without the “thank you.”

At the website RipoffReport.com, over a hundred individuals have filed reports of being ripped off by Carnival.  I can believe that.

Many families of the victims of the Costa Concordia have now filed lawsuits against the company.  However, if the lawsuits prove too financially painful, Arison will probably throw the company into bankruptcy court and just walk away.

It’s his modus operandi.