A practical, field-tested LOI framework built for home appliance service company acquisitions — covering purchase price, technician retention, earnouts, and due diligence terms specific to this industry.
A Letter of Intent (LOI) is the critical first document in any appliance repair business acquisition. It signals serious buyer intent, establishes key deal terms before attorneys get involved, and protects both parties during the due diligence period. For appliance repair businesses — where much of the value lives in technician relationships, manufacturer service authorizations, and a loyal repeat-customer base — a well-drafted LOI must go beyond generic boilerplate. This guide walks through every section of a purpose-built LOI for appliance repair acquisitions, explains why each clause matters in this industry, and shows you how to negotiate like a seasoned buyer. Whether you are an owner-operator buying your first shop, a home services roll-up platform adding a new territory, or an entrepreneur seeking a recession-resistant cash-flowing business, this template and guide will help you move from interest to exclusivity with confidence.
Find Appliance Repair Businesses to AcquireParties and Business Identification
Identifies the buyer entity and the seller, including the legal name of the appliance repair business, its principal operating address, and the seller's ownership structure. For appliance repair companies, this section should also note whether the business operates under a DBA, holds any manufacturer service authorization agreements in the owner's name, and whether multiple owners or family members hold equity stakes.
Example Language
This Letter of Intent ('LOI') is entered into as of [Date] between [Buyer Legal Name or Entity] ('Buyer') and [Seller Legal Name] ('Seller'), the owner(s) of [Business Legal Name], a [State] [entity type] operating under the trade name [DBA if applicable], located at [Address]. Seller represents that they hold 100% of the outstanding equity interests in the Business. Buyer understands that certain manufacturer service authorization agreements — including but not limited to those with [Whirlpool / LG / Samsung / GE, as applicable] — are currently held in Seller's name and will require assignment or re-application as part of the transaction.
💡 Confirm upfront whether any manufacturer service authorization agreements are held personally by the owner versus by the business entity. Authorization agreements with brands like Whirlpool, LG, or Samsung often require separate approval for transfer and can take 30–90 days. If re-authorization is required, negotiate a condition precedent or extended transition period to protect deal value.
Purchase Price and Valuation Basis
States the proposed purchase price and how it was derived. For appliance repair businesses, purchase price is typically calculated as a multiple of Seller's Discretionary Earnings (SDE), ranging from 2.5x to 4.0x depending on team depth, recurring revenue, brand strength, and owner involvement. This section should specify whether price is based on asset sale or equity sale and note any inventory or equipment included or excluded.
Example Language
Buyer proposes to acquire substantially all assets of the Business for a total purchase price of $[Amount] ('Purchase Price'), representing approximately [X.Xx] times the Business's trailing twelve-month Seller's Discretionary Earnings of $[SDE Amount] as represented by Seller. The Purchase Price includes all customer records, service history data, dispatch software licenses, technician employment relationships, trade name and goodwill, and parts inventory not to exceed $[Inventory Cap]. Vehicles will be [included at agreed value / excluded and leased back at market rate]. This transaction is structured as an asset purchase. Final Purchase Price is subject to adjustment following completion of financial due diligence.
💡 Push for a clear SDE add-back schedule before signing the LOI — appliance repair owners frequently run personal vehicle expenses, family payroll, and owner health insurance through the business. Confirm the SDE figure excludes these items. For businesses at or below $1.5M purchase price, SBA 7(a) financing is the most common structure; confirm the business is pre-qualified or initiate a lender conversation before entering exclusivity.
Deal Structure and Payment Terms
Outlines how the purchase price will be funded, including buyer equity, SBA or conventional financing, seller note, and any earnout component. Appliance repair acquisitions commonly use SBA 7(a) loans with a 10–15% buyer down payment, a seller note of 5–10% of purchase price on standby, and in some cases an earnout tied to technician retention or revenue performance.
Example Language
The Purchase Price shall be funded as follows: (a) Buyer cash equity of approximately $[Amount] ([X]% of Purchase Price); (b) SBA 7(a) loan financing of approximately $[Amount] ([X]% of Purchase Price), subject to lender approval; and (c) a Seller Note in the amount of $[Amount] ([X]% of Purchase Price), bearing interest at [6–8]% per annum, with a [24–36]-month term, subordinated to the SBA lender on standby. In the event that trailing twelve-month revenue at close falls below $[Revenue Threshold] or fewer than [X] technicians remain employed by the Business at close, Buyer reserves the right to renegotiate the Purchase Price or Seller Note terms prior to funding.
💡 Seller notes are a powerful negotiation tool in appliance repair deals because they align the seller's incentive with a smooth transition. If the business is heavily dependent on one or two technicians, propose an earnout or seller note adjustment tied to technician retention for 12–24 months post-close. Sellers often resist earnouts — frame the seller note as a simpler alternative that rewards them for staying involved during the transition period.
Due Diligence Period and Access
Defines the length of the due diligence period, what information the seller must provide, and buyer's right to access the business, its records, employees, and suppliers. For appliance repair businesses, due diligence must cover technician certifications, service dispatch records, parts supplier agreements, customer repeat rates, and manufacturer warranty revenue.
Example Language
Buyer shall have [45–60] calendar days from the date of this LOI ('Due Diligence Period') to conduct a thorough investigation of the Business. Seller agrees to provide, within [10] business days of LOI execution: (a) three years of federal tax returns and monthly P&L statements; (b) complete customer service history exported from [ServiceTitan / Jobber / Housecall Pro / current dispatch system]; (c) copies of all manufacturer service authorization agreements and warranty program contracts; (d) technician employment records, certifications, and compensation documentation; (e) parts supplier agreements and outstanding inventory list; and (f) a schedule of all vehicles, equipment, and tools included in the sale. Buyer shall have the right to speak with key technicians and parts suppliers with Seller present and upon reasonable notice.
💡 Insist on receiving service dispatch data, not just financial statements. Job history from platforms like ServiceTitan or Housecall Pro will reveal average ticket size trends, repeat customer rates, seasonal demand patterns, and which technicians are generating the most revenue. This data is often more revealing than the P&L for an appliance repair business. Allow 60 days if the business is larger or uses manual record-keeping systems.
Exclusivity Period
Grants the buyer an exclusive negotiating window during which the seller agrees not to solicit, accept, or entertain offers from other potential buyers. This is one of the most important protections in the LOI and should be triggered immediately upon signing.
Example Language
In consideration of Buyer's commitment of time and resources to conduct due diligence, Seller agrees that for a period of [60] calendar days following execution of this LOI ('Exclusivity Period'), Seller will not, directly or indirectly, solicit, entertain, or accept offers to sell, merge, or otherwise transfer the Business or its assets to any party other than Buyer. Seller agrees to promptly notify Buyer if any unsolicited third-party contact regarding a potential sale is received during the Exclusivity Period. The Exclusivity Period may be extended by mutual written agreement if both parties are making good-faith progress toward a definitive agreement.
💡 Sixty days is standard for appliance repair acquisitions; request an extension clause if SBA financing is involved, as lender timelines can push closing beyond the initial window. Sellers are sometimes reluctant to grant long exclusivity periods out of fear the deal will fall through — reassure them by presenting an SBA pre-qualification letter or proof of funds alongside the LOI.
Confidentiality and Non-Disclosure
Confirms that all information shared during due diligence remains confidential and may not be disclosed to third parties or used for competitive purposes. In appliance repair, this is especially important because customer lists and manufacturer authorization relationships are core competitive assets.
Example Language
Buyer agrees to maintain in strict confidence all information disclosed by Seller during due diligence, including but not limited to customer databases, service records, pricing structures, technician compensation, manufacturer authorization agreements, and supplier relationships. Buyer shall not use any such information for competitive purposes and shall not disclose it to any third party without prior written consent of Seller, except as required to facilitate SBA lender review, legal counsel, or accountant due diligence support, each of whom shall be bound by equivalent confidentiality obligations. This obligation shall survive termination of this LOI for a period of [24] months.
💡 If you have not already signed a standalone NDA before receiving financials, include a robust confidentiality clause here. Appliance repair sellers are especially protective of their customer lists and manufacturer relationships — honoring this concern builds trust and accelerates the process. Ensure your lender, CPA, and attorney understand the sensitivity of the information they receive.
Conditions to Closing
Lists the specific conditions that must be satisfied before the transaction can close. For appliance repair businesses, conditions should address technician retention commitments, successful transfer of manufacturer service authorizations, lender approval, and satisfactory completion of due diligence.
Example Language
The closing of this transaction is subject to satisfaction of the following conditions: (a) completion of due diligence to Buyer's reasonable satisfaction; (b) execution of a definitive Asset Purchase Agreement acceptable to both parties; (c) receipt of SBA or alternative financing approval on commercially acceptable terms; (d) confirmation that [minimum number] of current technicians have agreed in writing to continue employment with the Business post-close on terms acceptable to Buyer; (e) assignment or re-authorization of all material manufacturer service agreements, including [specific brands], to Buyer's entity or confirmation that re-application has been accepted; (f) no material adverse change in business revenue, customer base, or technician staffing between LOI signing and closing; and (g) execution of a Seller Transition and Consulting Agreement for a minimum period of [90 days].
💡 Technician retention and authorization transfer are the two highest-risk closing conditions in appliance repair deals. Negotiate a minimum technician threshold — if the business has four technicians and two leave before close, you are buying a fundamentally different business. Similarly, losing a Whirlpool or LG warranty authorization before close can eliminate a meaningful recurring revenue stream. Build these as hard conditions, not aspirational goals.
Seller Transition and Non-Compete
Specifies the seller's obligations after closing, including a training and transition period and a non-competition covenant covering the business's service territory. Transition is especially important in appliance repair where the seller may hold manufacturer relationships or be the primary point of contact for key customers.
Example Language
Seller agrees to provide transition consulting services for a minimum of [90] days following close, at no additional cost to Buyer, to include introductions to manufacturer representatives and parts suppliers, transfer of customer relationship context, technician oversight support, and operational knowledge transfer. Seller further agrees to a non-competition covenant for a period of [3] years within [25–50] miles of the Business's primary service territory, prohibiting Seller from directly or indirectly engaging in residential or commercial appliance repair services. A separate non-solicitation covenant shall apply to current employees and customers for the same period.
💡 SBA guidelines require non-compete agreements for sellers in SBA-financed transactions. Tailor the geographic scope to the actual service territory — a shop serving a single metro area does not need a 100-mile radius. Three years is the standard SBA minimum and is generally sufficient. If the seller is young or particularly well-known in the local market, consider negotiating a slightly longer term or a broader geographic scope.
Deposit and Good Faith
Establishes whether a good faith deposit is required upon LOI signing or upon entry into the definitive purchase agreement, and the conditions under which it is refundable.
Example Language
Upon execution of this LOI, Buyer agrees to deposit $[Amount] ('Good Faith Deposit') into an escrow account held by [Escrow Agent / Title Company]. The Deposit shall be fully refundable to Buyer if: (a) Buyer terminates this LOI during the Due Diligence Period for any reason related to findings discovered during due diligence; (b) the parties fail to reach a definitive agreement within [75] days of LOI execution; or (c) any closing condition listed herein fails to be satisfied. The Deposit shall be applied toward the Purchase Price at closing. The Deposit shall be forfeited to Seller only if Buyer terminates without cause after the Due Diligence Period has expired and a definitive agreement has been executed.
💡 Deposits in the $5,000–$25,000 range are common in this deal size range. Sellers may request a deposit to filter out unserious buyers, which is reasonable. Always ensure the deposit is held in a neutral escrow account — not wired directly to the seller — and that the refund conditions are clearly defined, especially for financing contingencies.
SDE Add-Back Validation for Owner-Operator Businesses
Many appliance repair owners run personal vehicle leases, family health insurance, owner salaries above market, and discretionary expenses through the business. Before accepting the seller's stated SDE, require a full add-back schedule with supporting documentation. Disputes over add-backs are the most common reason appliance repair LOIs fall apart during due diligence — resolve the methodology before signing.
Manufacturer Service Authorization Transfer Timeline
Authorized warranty repair agreements with brands like Whirlpool, Samsung, or LG can take 30–90 days to transfer or re-authorize and may require a site inspection or certification review. Negotiate a closing condition that explicitly addresses this timeline and identify whether the agreement transfers by assignment or requires a fresh application by the buyer's entity.
Parts Inventory Valuation and Inclusion
Appliance repair businesses typically carry $20,000–$100,000 or more in parts inventory. Negotiate the method of inventory valuation — cost, market, or age-adjusted — and specify a maximum inventory cap to avoid paying full price for obsolete or slow-moving parts. Confirm that inventory will be physically counted and verified before closing.
Technician Retention Threshold as a Closing Condition
If the business employs two or more technicians beyond the owner, define a minimum retention threshold that must be met at close. Propose employment offer letters to key technicians before the LOI exclusivity period ends to reduce post-LOI attrition risk. This is especially important for roll-up buyers who are acquiring the team as much as the customer base.
Earnout Structure Tied to Revenue and Technician Continuity
When the seller is the primary technician or customer relationship holder, propose a 12–24 month earnout tied to revenue retention and technician continuity metrics. This aligns the seller's incentive with a successful transition. Keep earnout terms simple — tie them to gross revenue thresholds, not profitability, to reduce disputes over post-close expense allocation.
Vehicle and Equipment Treatment
Appliance repair businesses rely on service vans, diagnostic tools, and specialty equipment. Negotiate whether vehicles are included in the purchase price, transferred via a separate bill of sale, or leased back. Confirm ownership, outstanding liens, age, and mileage for each vehicle, as deferred maintenance or pending replacement can meaningfully impact post-acquisition cash flow.
Customer Database and Service History Data Ownership
The customer list and historical service records are among the most valuable assets in an appliance repair acquisition, representing repeat call history and future marketing potential. Confirm that all data is owned by the business entity, that it will be transferred in a usable format compatible with your dispatch platform, and that the seller will not retain a copy after closing.
Find Appliance Repair Businesses to Acquire
Enough information to write a strong LOI on day one — free to join.
Appliance repair businesses typically sell for 2.5x to 4.0x Seller's Discretionary Earnings (SDE). Businesses at the higher end of that range have multiple certified technicians on staff, strong Google review profiles, manufacturer service authorizations with major brands like Whirlpool or LG, and documented repeat customer histories. Owner-operated shops where the owner is the primary technician generally trade at 2.5x–3.0x due to transition risk. Businesses with service contracts, maintenance agreements, or commercial accounts may command multiples above 3.5x.
The vast majority of appliance repair business acquisitions in the lower middle market are structured as asset purchases. An asset purchase allows the buyer to acquire the customer list, trade name, equipment, vehicles, manufacturer authorizations, and goodwill while leaving behind unknown liabilities, prior tax obligations, or pending warranty claims. Sellers sometimes prefer an equity sale for tax reasons, but buyers should resist this structure unless thorough legal due diligence is complete and the business entity has a clean liability history.
Manufacturer service authorizations — agreements that allow an appliance repair business to perform warranty repairs for brands like Whirlpool, Samsung, GE, or LG — can represent a significant portion of revenue and are often non-transferable by assignment. Some brands require the new owner to re-apply, pass a site inspection, or hold technician certifications before granting authorization. This process can take 30–90 days. Buyers should treat authorization transfer as a hard closing condition and begin the re-application process as early as possible during due diligence.
Expect to review three years of tax returns and P&L statements, a full customer database export with service history, job records from the dispatch or CRM platform, technician certifications and employment agreements, parts supplier contracts, manufacturer authorization letters, vehicle titles, equipment lists, and insurance policies. The most insight often comes from analyzing the dispatch data — specifically repeat customer rates, average ticket size over time, and revenue distribution by technician. Plan for 45–60 days minimum, or 60–90 days if SBA financing is involved.
Most LOIs are intentionally non-binding on the core deal terms — purchase price, structure, and conditions — but legally binding on specific provisions including confidentiality, exclusivity, and good faith dealing. This means the seller cannot shop the deal to other buyers during the exclusivity period, and neither party can disclose due diligence information to outsiders. Have your attorney review the LOI before signing to confirm which sections are binding and to ensure the confidentiality and exclusivity clauses are enforceable in your state.
The transition period is critically important in appliance repair, especially when the seller holds manufacturer relationships, manages key supplier accounts, or is personally known to a large portion of repeat customers. A minimum 90-day transition is standard, and some buyers negotiate 6–12 months of part-time consulting availability, particularly for SBA-financed deals where lenders may require it. Structure the transition agreement to include specific deliverables — supplier introductions, manufacturer contact transfers, technician orientation, and customer communication — rather than leaving it as an open-ended consulting arrangement.
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