buying a business: revenue lower than when negotiating

[flaker]

".......will take a "wait-and-see" approach if they get to hear about a change in ownership. Jumping ship before the event is... a bit unusual."

I would imagine there would be a restraint of trade clause in place ??

[Dave A]

There could be plenty of perfectly valid reasons contributing to a drop-off. For example, if you're a supplier to the metals industry right now, a drop off would not be surprising at all.
If you were a supplier to the platinum mines during their big strike this year, sales probably did not so much drop as plummet.

I'm just suggesting areas to examine. No use paying school fees if you don't get around to understanding the lesson.

[Leonp]

not sure i understand. commission to the seller based on future sales. makes sense but i believe its a bit late now. the damage has been done.

had a looong conversation with seller yesterday and she insists all cancellations are valid.

[Leonp]

yes i agree. we don't supply the metals industry but we revenue from salary earners in the industrial sector, so im sure its related. This can be negated though, by engaging the individuals who want to cancel and offering them a 3 month pause in contract responsibilities or a reduced fee, etc, on a case by case basis. This was not done though, and we weren't given a heads up or opportunity to intervene. We've now taken over all cancellations to stop the exodus.

[Leonp]

2 things:

its a franchise, so she cant compete directly in restricted area.
and the base for selling is her intention to move to cape town and run same franchise there.