THE SHORT ANSWER
Verify the actual agreement book: signed scope, prices, renewal eligibility, cancellations, remaining visits and transfer questions. Reconcile retained customers and earned revenue to records, then test delivery costs and technical coverage. A large plan count, automatic billing or collected annual fees does not establish transferable profit or cash available to spend after closing.
Inspect the terms behind the agreement count
Request authorized samples and a dated register showing service scope, start/end dates, renewal, pricing, cancellation and assignment/change-of-control questions. Distinguish expired plans, duplicates and customers with more than one system. Have advisors identify required customer and provider approvals.
Review unperformed visits, priority-response commitments, discounts, warranties, refunds and balances. Identify which obligations the buyer would accept and the proposed closing treatment. Use the consent register rather than assuming residential plans transfer implicitly or commercial arrangements are always longer and better.
Define the renewal calculation before interpreting it
| Invented eligible-renewal count | Result |
|---|---|
| Plans due for renewal in the specified period | 120 |
| Those plans renewed under the stated definition | 100 |
| Count renewal rate: 100 ÷ 120 | 83.3% |
Reconcile the denominator, renewal status and observation dates. Track renewed fees and service costs separately; a higher count can coexist with lower revenue or increased included work. Use the retained-customer worksheet for new, lost and expanded revenue instead of mixing them into the renewal count.
Verify delivery costs and qualified coverage
Trace visits and repairs to labor, parts, travel, rework and overhead. Test the actual schedule, skill mix and capacity for the agreed service scope. Review owner escalation and proposed technician involvement through the role handoff. Staff participation is not assured by a roster.
EPA’s Section 608 requirements identify covered technician activities and equipment-specific certifications.
(EPA: Section 608 technician certification requirements)Confirm actual coverage and the supervised apprentice exception with qualified reviewers. These requirements do not grant state/local contractor authority or prove the business can operate without the owner.
Reconcile access, prepaid work and acquisition cash
FTC guidance supports necessary information and restricted access.
(FTC: protecting personal information in business)Use approved redacted diligence, review provider terms and arrange lawful customer/system handoff. Customer details and access instructions are not unrestricted assets because a sale is proposed.
SBA acquisition guidance encourages full investment and operating-cost review.
(SBA: evaluating an existing business purchase)Model payroll, parts, dispatch, vehicles and the cost of prepaid work alongside price. Have the accountant distinguish cash received from earned fees, and agree treatment of remaining obligations. Use the value scope guide and the cash-flow tool. Neither an 83.3% hypothetical renewal count nor a service contract assures financing or price.
Buyer questions
Is count renewal the same as revenue retention?
No. Define the eligible group and separately track retained fees, pricing and delivery costs.
Are prepaid annual fees free cash at closing?
Review remaining services and refund obligations, accounting and the agreed treatment.
Do automatically billed plans transfer without consent?
Review the actual contracts, provider arrangements and applicable approval requirements.
Sources and review scope
Source review completed . The sources below support the identified concepts or rules; they do not validate hypothetical amounts or a valuation of your business.
- EPA: Section 608 technician certification requirements
Covered technician activities, equipment-specific certification types, supervised apprentice exemption and non-expiring credentials. July 15, 2026 update. Not a state contractor license, company-wide clearance or assurance of staff retention.
- FTC: protecting personal information in business
Information inventory, necessary access, authentication, encryption, service-provider oversight, retention and incident planning. General security guidance; not an M&A privacy-law compliance certification.
- SBA: evaluating an existing business purchase
Current consolidated planning page, acquisition sections: investment and operating costs, personal fit, infrastructure, investigation and professional document review. Not proof of off-market availability, superior pricing or financing approval. No franchise-specific conclusions taken from this source.
Confirm tax, legal, accounting and lending applications with the relevant professionals. Historical market observations describe the stated period and reported sample.
This is educational material. Industry figures and program rules can change; check the original sources and your advisors before applying them to a transaction. Calculator scenarios are not appraisals, lending decisions, or offers.
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