QoE Needed on Franchise Acquisition?

searcher profile

September 17, 2025

by a searcher from Ball State University in Indianapolis, IN, USA

Looking for community feedback on the need for QoE on acquiring an existing multi-unit franchise. Lender isn't requiring it (I've always heard it is best practice) but due to entity structure, could be costly (almost $30k). $4.75M revenue, $525k EBITDA, Enterprise Value $2.1M across 5 entities. If no full QoE, any other recommendations to help validate financials?
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commentor profile
Reply by an intermediary
from Arizona State University in Houston, TX, USA
Luke, thanks for the tag. I’m firmly pro–due diligence. If I were writing $2M+ check (likely with a personal guarantee to the lender), I’d absolutely invest in a Quality of Earnings and legal review to validate the numbers and the narrative. Too many buyers skip QoE or minimize legal, then spend multiples of that cost trying to claw back value post-close. Even with airtight documents, litigation is slow and expensive. Spend the money up front to verify and protect the investment.
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Reply by a searcher
from The University of Chicago in Los Angeles, CA, USA
Financial due diligence will differ based on the business. I would reach out to several providers and come up with an approach that works for your business. The definition of costly is buying something that you weren't expecting to buy.
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