Purchase of a childcare business can involve complex issues. You may purchase a childcare business along with land and building (Freehold Business) or a business operation with staff, clients, equipment and lease obligations (Leasehold Business).
The evaluation of a childcare business is commonly referred to as Due Diligence.
General Due Diligence involves the preliminary analysis of publicly accessible data. Factors to be taken into consideration include but are not limited to the location, accessibility, centre configuration, license numbers, and general lease terms.
Operational Due Diligence is the second step for assessing the purchase. Comprehensive data including revenue reports, government funding statements, employment contracts and expenditure records will provide an insight into the business’s status and area competition. The related issues you may consider include:
- Does the centre have room configuration, or a licence based on places?
- How are the occupancy rate of each room within the centre?
- How long have the staff been associated with the centre?
Following an informed decision-making process based on the general and operational due diligence procedures, legal professionals may be involved to:
- conduct a thorough examination of the existing leasing terms;
- perform comprehensive council searched to ensure compliance with building approvals, zoning regulations and car parking requirements;
- negotiate and prepare the contract of sale incorporating special conditions;
- facilitate the obtaining of Provider Approval and transfer of licence approval;
- negotiate property settlement date and conditions;
- prepare documents for settlement and transfer of lease.
How can I learn more?
Kelly Brown.
Associate.
- Property and Wills & Estates
- 03 9890 3321
- Email Address: k.brown@robinsongill.com.au
Serena Ding.
Principal.
- Property, Business & Public Notary
- 03 9890 3321
- Email Address: s.ding@robinsongill.com.au
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