Buyer’s Due Diligence Checklist

To assist you in purchasing an existing MOLLY MAID business, we have listed below the information and reports that we have found helpful when candidates conduct their "due diligence" in preparation for the purchase of an existing MOLLY MAID business. Please be aware that you may request information outside of the scope of this checklist and the owner will respond, as appropriate, to the request. In short, this list is in no way complete or exhaustive, and Molly Maid does not warrant the completeness of this list or the results of your “due diligence” investigation. You may also find it helpful, and possibly necessary, to acquire the services of an attorney and/or accountant to assist you in the negotiation of the sale.

Financial Information

 Current Year to Date and Prior Year Profit and Loss Statements.  12 months of Royalty Reports, plus any additional requested.  Three years of income tax returns (1120 or 1120S for corporations, 1040 for sole proprietorships) or, if the business has not been in operation for three years, tax returns for each of the years seller has have filed.  Information on Outstanding Loans/Liens  Accounts receivable report.  A list of liabilities that are to be assumed through sale of the business or a statement that assigns responsibility to pay/receive:  vacation accrued  employee security deposits  vehicle leases, lease payments, deposits  yellow page account balance  outstanding insurance claims  open worker's compensation claims  unredeemed gift certificates  accounts payable report (in most cases, new owners purchase the assets of the business and the accounts payable remain with the selling owner)

Employee Information

 Current Year 941 and State Unemployment Quarterly filings.  Copies of employee files to determine existence of W-4, I-9, employee pay records, employment applications, bonding applications, employment agreements, workers compensation claims, etc.  A list of employee benefits currently in effect including vacation policy, employer participation in health/medical benefits etc.

Customer Information

 Current customer list including names and addresses, frequency of service, first and last date serviced, and service fee – NOT TO BE SHARED WITH A CANDIDATE BUYER UNTIL APPROVED BY MOLLY MAID HOME OFFICE.  Past route schedules for HSP teams.  A random sample of route manager reports.  Active and inactive files of customer estimates.  Evidence of customer satisfaction like Quality Checks, customer notes, etc.  Documentation and custody of customer property: key control list, customer keys, and security codes.  Disclosure of any customers being serviced outside exclusive territory and any executed Request for Authorization to Service Customers Outside Territory.  Disclosure of any customers with payment terms other than cash at the time of service.

Contracts/Insurance Information

 Office Lease  A list of contracted services/equipment currently used (equipment lease, pagers, cellular phones, advertising, etc.) and their transferability. Copies of agreements.  Correspondence Regarding Defaults Under Contracts  Documentation of financial responsibility to transfer/assign vehicle leases, equipment leases, office lease, future marketing requirements, warranties and assignment of lease deposits.  Copy of current insurance coverage showing levels of coverage, deductibles, payroll estimates, classifications, MOLLY MAID additional insured party, etc. Is coverage transferable?

Assets/Operational Information

 A list and value of each asset owned including: office equipment, furniture, pre-paid business expenses that will benefit the new owner, vacuums, cars, uniforms, supplies, forms, marketing pieces, etc.  Visual and safety check of HSP and estimate vehicles including odometer readings, decals (see attached), etc.  Visual inspection of vacuum cleaners.  Confirm HSP’s properly attired in current MOLLY MAID HSP uniform.  Review Directory listing for the minimum trademark ad.  Name of business accountant.  Assumption of SUTA rate (state unemployment), if applicable.  Company Minute Book  List of Litigation Pending or Threatened

MOLLY MAID decal placement