Contract Issues in Buying/Selling a Sweeping Company

by Ranger Kidwell-Ross In latter 2020 a seasoned business owner we’ll call John tried to purchase a power sweeping company. He was incentified by a COVID-related, low-interest loan program the SBA was offering so the pursuit was somewhat time-sensitive. Unfortunately, the buyer and seller were ultimately not able to come to an agreement. Although the primary reason for that included several factors, the most major was that a significant amount of the sweeping company’s business was sweeping WalMart lots, which was all being done through a third party vendor, City FM. And, WalMart’s Master Service Agreement (MSA) includes language that gives WalMart the sole discretion to decide whether or not to allow a new owner, one who has acquired 50% or more of a vendor company, to keep the current contract. (As was learned later, a long-time WalMart manager said that the third party vendor’s contract allowed it to use contractors regardless of WalMart’s MSA.) As you will hear in the audio podcast linked below, which was held with the fairly sophisticated potential buyer, a variety of advice is offered about recommended actions for both the buyer and seller. Part of that includes advice about how a business owner should ‘package’ their company as well as how personal disbursements should be minimized, in the several years preceding a decision to sell. He also discusses what his financial organization wanted to see in order to approve a loan for the purchase of a business. Whether you are interested in buying or selling a business, there is information in the following @25 minute conversation you will find of interest. You can listen to the podcast interview at this location: www.worldsweepingpros.org/audio/SellBusinessContractIssues9.20.mp3