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The AMA Handbook of Due Diligence by Andrew J. Sherman, William M. Crilly

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ENTITY Form 10-23
237
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
SUMMARY OF FRANCHISE OPERATIONS - ENTITY AS FRANCHISEE
If the entity conducts any operations as a franchisee, please provide the following information.
YEAR NUMBER OF
FRANCHISE LOCATIONS
DOMESTIC/FOREIGN
GROSS
REVENUES
NET
REVENUES
PRETAX
INCOME
Dollars In Thousands
20 / $ $ $
20 /
20 /
20 /
20 /
Percent Change From Previous Year
20 %/ % % % %
20 /
20 /
20 /
20 /
FIVE LARGEST FRANCHISE LOCATIONS - MOST RECENT TWELVE MONTHS (1)
LOCATION GROSS REVENUES NET REVENUES PRETAX INCOME
Dollars In Thousands
$ $ $
Total - Five Largest Locations $ $ $
Percent Of All Locations % % %
Note: (1) Twelve months ending ___________________ .
ENTITY Form 10-24
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
238
FACTORS IMPACTING MARKETING ACTIVITIES
DECISION LEVEL
As a general rule, at what level in the customer’s organization is the buying decision made? Differentiate
between products and/or services, if appropriate.
Example: Top management, production management, purchasing department management, purchasing
department product specialist, etc.
SUCCESS FACTORS
What are the major factors that influence a customer’s decision to buy the type of product or service offered by
the entity? List in estimated order of importance.
Example: Quality, delivery, price, service, credit terms, warranty, return policy, etc.
MARKETING STRENGTHS
What are the major strengths of the entity’s marketing programs?
MARKETING WEAKNESSES
What are the major weaknesses of the entity’s marketing programs?
(Continued On Following Page)
ENTITY Form 10-24
239
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
FACTORS IMPACTING MARKETING ACTIVITIES (Continued)
MARKETING WEAKNESSES (Continued)
What programs are in place, or are recommended, to overcome these weaknesses?
REVENUE ENHANCEMENT PROGRAMS
How can sales be increased to the current customer base?
How can the customer base be expanded?
What can be done to further differentiate the entity’s products and/or services from those of its competitors?
Will an increase in working capital provide the basis for a significant increase in sales? [ ] Yes [ ] No
If so, how is it best deployed?
ENTITY Form 10-25
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
240
PRICING - ORGANIZATION
FORMAL ORGANIZATION
Does the entity have a formal pricing activity? [ ] Yes [ ] No If so:
What is the name and title of the individual heading this function?
What is the name and title of the person to whom the above manager reports?
How many full time people are assigned to this activity? _______
INFORMAL ORGANIZATION
If a full time pricing activity does not exist, what are the position titles of participants in the pricing process?
TITLE OF PARTICIPANT PRICING OF NEW
PRODUCTS
PRICE CHANGES
ON EXISTING
PRODUCTS
ULTIMATE RESPONSIBILITY FOR PRICE CHANGES
Who has ultimate responsibility for approving:
Prices for new products?
Name: _____________________________Title: ___________________________________________
Price changes on existing products?
Name: _____________________________Title: ___________________________________________
ENTITY Form 10-26
241
REF.
PREPARED BY REVIEWED BY
REVISION DATE SECTION PAGE
INTERNAL PRICING POLICIES
PRICING OBJECTIVES
The following responses should relate to the entity’s own pricing policies. It is recognized that competitive
conditions can have a major impact on the entity’s ability to implement its own concepts.
What is the pricing objective for competitive products?
What is the pricing objective for non-competitive products?
DISCOUNTS FOR VOLUME PURCHASES
Does the entity offer price breaks for volume purchases? [ ] Yes [ ] No
If so, please provide price schedules illustrating break points.
If a consistent “learning curve” approach is utilized, what percent “curve” is used? _______ %
MINIMUM ORDER QUANTITY
Does the entity specify minimum order quantities? [ ] Yes [ ] No
If so, are they established on the basis of a minimum number of units or minimum dollar value? _________
Can a mix of different products qualify for the discount? [ ] Yes [ ] No
PRICE PROTECTION
Does the Company provide “price protection” to its dealers? [ ] Yes [ ] No
If so, at what level (i.e., wholesale and/or retail) and under what circumstances?

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