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Ship-Shape Documents a Must to Smooth M&A



Franchise systems that fail to collect and store all their documents in an electronic database aren’t merely disorganized—they also may lose the deal altogether when a potential buyer comes to look at their firm.

 So said a panel today covering due diligence during franchise mergers & acquisitions, at the International Franchise Association’s Legal Symposium in Chicago, which runs through May 6.

“You have to keep in mind that the due diligence process is a job interview for the general counsel, because we want to have top-tier management,” said Jeremy Holland with The Riverside Company, a private equity firm that buys growing concepts under $250 million in revenue. “You’re being evaluated, all of senior management is being evaluated. We want people that run a tight ship.”

Gaylen Knack of Gray Plant Mooty, moderator of the panel, said a deal recently fell through for a disorganized buyer, and Holland added oftentimes the price offered will decline. “You’re not changing your price because of disorganization, but because of exposure” to risks that can’t be answered by a thorough document review, Holland said.

Grayson Brown is senior corporate counsel for TBC Corp., which franchises Big O Tires and Midas, among other brands. “You need to help the franchisor have a system and procedure, to have everything in order,” he said. “I do an annual review” of all documents in the system, “because you have to be ready for a transaction on a moment’s notice.”

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The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




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