How does your firm advertise and still maintain the confidentiality of my school?

As a company that specializes in the early education industry, we understand and appreciate the extreme need for confidentiality. We put tremendous effort into branding our company as a specialty firm and as such we are always looking for qualified buyers for facilities of all types and sizes.  Most of our marketing is non specific in nature. We will never advertise your name or address to the general public.

Can your company sell my franchised preschool?

FranchiseYes, our company has solid experience working with franchise re-sales. We have concluded many transactions with some of the nations top franchise preschool brands. Here at New Generation Realty & Investments we understand the complexities that surround the sale of a franchise preschool. We will work closely with you and your franchise representative to move a qualified buyer through the approval process. We also understand that many franchises have first rights to purchase your location and/or the right to help you sell it. We work in conjunction with the efforts of your franchise, not against them. We have special contracts for franchise business owners which exclude those rights entitled by your franchise. In other words, you will never be obligated to pay two commissions.

How does your firm help me to establish a fair and marketable selling price for my business and/or property?

There are several steps that go into evaluating your property and/or business.  Although there does exists simplified “rules of thumb”, as a specialist, we go beyond the basics to establish a true understanding of your particular property or operation. In general, we will incorporate a combination of comparable sale data (which many times comes directly from in-house transactions due to the lack of public information), cash flow analysis, CAP rate analysis, surrounding area land/building sales data, surrounding area building lease data, and national statistical data.

We spend a great deal of time carefully reviewing the documentation and analyzing the financial information provided to us in order to come up with a fair and reasonable (by market standards) range in value for your anticipated transaction.

How long will it take to sell my childcare business?

This is probably the most common question asked and yet the most difficult to answer. Our experience has shown that demand in your market and the cash flow from operations are the two most significant factors related to faster sales. On average, most opportunities will sell within six months to one year of being placed on the market. However, depending on the two factors mentioned above as well as other factors, some will sell in significantly less time. Conversely, some more complicated transactions may take significantly longer.

Transactions requiring third-party (bank) financing on average take longer to close. Mainly because of the increased amounts of paperwork and due diligence requirements. This is even more the case when real estate is involved.  This is not to say that 100% cash transactions necessarily move through the process more rapidly. They can, due to less constraints and requirements, however, our experience has shown that when all of the financing is being provided by the purchaser that they tend to be much more cautious and thorough in their due diligence.

What do you consider to be an important factor when selling a childcare business?

Most definitely cash flow! It is the cash flow from the operation of the business that fuels buyer demand and determines whether a lender will provide financing to one of our qualified buyers. Opportunities that are positioned to receive bank financing are more likely to sell faster than those that are not.

Your company is located in North Carolina and my center is located in another state, how are you able to sell my school?

Selling a childcare business is much different than selling a residential home or other type of commercial property. In order to maximize the confidentiality of the sale, certain common elements of traditional brokerage are not utilized in the sale of a child care center. As a firm that specializes in childcare opportunities, we have developed a unique set of procedures that we follow for every transaction no matter where the center is located. It is important to note that once we have determined that the contemplated transaction is viable, we will schedule a time that is convenient for you (day, evening or weekend) to meet at your facility to conduct an onsite tour and consultation.

What is the required down payment “Equity Injection” for the purchase of a business with or without real estate?

First, it is important to understand that most loans pertaining to business purchases will involve the Small Business Administration (SBA).  Although lenders have some control over cash injection requirements, you will find that most lenders follow a similar pattern. In general, the requirement will depend on the type of purchase you are making i.e. business only, real estate only, or business with real estate combination, as well as the loan program for which you are applying. For real estate purchases, the equity injection requirement can be as low as 10%. When purchasing a business with real estate, again the requirement can be as low as 10% but generally will be a blended rate which will be determined depending on the price ratio (business vs. real estate). For business only loans, the amount of equity injection will vary depending on the strengths of the buyer, the business, and the transaction as a whole. The amount can be as low as 10% (not as common) but is generally between 20% – 25%. Transactions where intangible assets i.e. goodwill exceeds $500,000 the equity injection will be at least 25%