How long should due diligence take?

Long enough to get the third-party reports back and short enough that the seller does not lose their nerve. The items with the longest lead time — environmental work, licensing, lender conditions — should be started on day one rather than when the easy items are finished.

What should I ask for first?

Three years of tax returns, twenty-four months of monthly sales, the lease, the payroll, and a list of the equipment with its age. Almost every serious question comes out of those five documents.

The seller will not give me the financials. Is that a red flag?

Not before a confidentiality agreement is signed — that is normal and sensible. After one is in place, continued reluctance to show source documents rather than summaries is worth taking seriously.

Do I need an attorney and an accountant?

Yes. Use your own, not the seller's, and involve them before you sign a purchase agreement rather than after. The purchase agreement is where risk is allocated, and by the time it is signed most of the leverage has gone.

What to Check Before You Buy

Diligence is not a pile of documents. It is a short list of things that would change your price, checked in the order that protects your timetable.

Written by the Northland Retail Acquisitions team · Reviewed 2026-09-13

Start the slow things immediately

Some checks depend on other people's calendars: an environmental consultant, a municipal licensing meeting, a lender's credit committee, an appraiser. Those set the real closing date. Begin them the week your offer is accepted, and do the quick document review while you wait rather than the other way round.

Item	Why it can't wait	Who controls the timing
Environmental (fuel sites)	A Phase I takes weeks and a Phase II adds more.	The consultant and the lab.
Alcohol licensing	Approval usually happens at a scheduled meeting.	The municipality.
Lease assignment	The landlord's consent may take longer than you assume.	The landlord.
Financing	Conditions surface late and often require more documents.	The lender.

Verify the earnings rather than accept them

Three years of tax returns, read against the profit and loss statements
Twenty-four months of sales by month, so you can see the seasonality
Bank deposits reconciled to reported sales
Supplier and distributor statements, which are hard to overstate
Every add-back explained and evidenced, one at a time
A full market wage inserted for the owner and any unpaid family
Any recent jump in sales traced to a specific cause

Read the documents that outlive the seller

The lease, the supply agreement, equipment finance, service contracts and any franchise or brand agreement all continue after closing. Each can carry assignment terms, early termination costs or obligations you would not have agreed to. Read the originals, not summaries.

Look at the people

Ask who actually opens the store, who holds the supplier relationships, and who the customers ask for by name. Then ask what happens if that person leaves the week after closing. In small retail, one long-serving manager is frequently a larger risk than anything in the financial statements.

Cost the first three years of equipment

Coolers, compressors, dispensers, wash equipment, HVAC, the roof, the lot surface. Write down the age of each and what replacement costs. That total is part of your purchase price whether or not anybody calls it that.

Walk the site at the times that matter

Visit on a Friday evening and a Tuesday morning. Count the cars. Look at the competitor a mile away and see whether it is busier. Check the approach, the parking and the signage from the road. An afternoon of this will tell you things no spreadsheet will.

Put the findings into the agreement

Diligence only protects you if it changes the paperwork. Conditions on licensing and environmental outcomes, a defined inventory method, warranties on the financial information, and a plan for anything you found — that is where the work becomes money.

Common questions

How long should due diligence take?: Long enough to get the third-party reports back and short enough that the seller does not lose their nerve. The items with the longest lead time — environmental work, licensing, lender conditions — should be started on day one rather than when the easy items are finished.
What should I ask for first?: Three years of tax returns, twenty-four months of monthly sales, the lease, the payroll, and a list of the equipment with its age. Almost every serious question comes out of those five documents.
The seller will not give me the financials. Is that a red flag?: Not before a confidentiality agreement is signed — that is normal and sensible. After one is in place, continued reluctance to show source documents rather than summaries is worth taking seriously.
Do I need an attorney and an accountant?: Yes. Use your own, not the seller's, and involve them before you sign a purchase agreement rather than after. The purchase agreement is where risk is allocated, and by the time it is signed most of the leverage has gone.