This article attempts to help give the investor a broader basis upon which to decide whether a dealership merits their time, money and attention.

Interviewing Factories and Financial Institutions

Lenders have an affirmative duty not to  rvs promiscuously disclose the financial condition of their debtors. In addition, most Sales and Service Agreements contain confidentiality agreements, with respect to the unauthorized disclosure of a dealer's business. Consequently, questions directed to factories and finance companies should be limited to pertinent, non-confidential questions.

The Buyer's Responsibilities

230 Kan. 684, 640 P2d 1235 held that not only was a bank under no duty to disclose information to a borrower intending to purchase a dealership, but that the investor could not avoid responsibility of exercising reasonable diligence for his own protection. See too: 387 NW2d 373 (Iowa) and 773 F2d 771 (7th Cir.) A buyer may not abandon all caution and responsibility for his own protection and unilaterally impose a fiduciary relationship on another without a conscious assumption of such duties by the one sought to be held liable as a fiduciary. 724 SW2d 343

Courts have even held that a seller's accountants upon discovery its client's financial statements were misleading at the time they were given out, had no duty to correct them, even though they were included in a prospectus. See: 513 FSupp 608 N.D. Ga.

The Physical Inspection of the Dealership

Due diligence requires more from a physical inspection of the dealership then searching for defects in the facility, or potential EPA or OSHA problems. A skilled advisor can surmise how well a potential seller is operating by a visit to the facility. Such things as whether the sales people are energetic, or lethargic; the amount of time it takes sales personnel to greet customers; whether the store is clean and well maintained; whether awards plaques are kept up to date, all indicate the financial condition of the dealership.

Public Information

Data can be obtained from public information to determine not only the financial strength of the dealership, but it can also suggest how to structure an offer more attractable to a seller. Sometimes a seller will accept less money because of the manner in which the offer was structured. Determine what a seller needs, then find a way to enable him or her to get it.

UCC-1, title and mechanic's lien searches all supply information without having to seek permission to obtain credit reports and without violating contractual relationships with lenders.