How to Buy a FedEx Route for Sale: Step-by-Step Guide
Does owning a FedEx route sound like the right opportunity for you? You’ve come to the right place. As an industry leader, KR Capital has helped hundreds of buyers successfully purchase FedEx routes.
To understand how to buy a FedEx route, consult our step-by-step guide, below:
1. Find FedEx Routes for Sale.
If the available routes do not meet your criteria, we invite you to complete our buyer info request form. We will send alerts when new routes that match your requirements are listed for sale.
2. Sign a Non-Disclosure Agreement.
When you find a route you are interested in, you will need to sign a non-disclosure agreement (NDA). An NDA is a contract that ensures the information about the route business stays confidential.
At this time, KR Capital also verifies your financial qualifications.
3. Review the Route Business.
Our firm delivers the listing package for your review. This package, which consists of materials compiled and approved by the seller, enables you to further review the details of routes.
4. Complete a Q&A Meeting with the Seller.
Following your review of the information, you will have an opportunity to ask the seller questions you may have about the business. If desired, KR Capital will coordinate a meeting between the buyer and seller. This meeting may occur in person or over the phone, depending on the preferences of the parties.
5. Submit Letter of Intent.
Should you decide to pursue the purchase, you will submit a letter of intent that outlines the terms of your proposal. The LOI will be specifically tailored to the routes you are interested in and outline the assets included in the sale. You can view a sample letter of intent in our buyer resources.
6. Complete Due Diligence.
Following a mutually signed letter of intent, the buyer may request a number of due diligence items from the route seller. This is a particularly important step, as it will help you accurately understand the financial and operational aspects of the business. If you are seeking bank financing, additional due diligence items will likely be required by the bank.
The due diligence period is generally 2 to 4 weeks. During this time, you may request information such as:
- Current financial statements to include P&Ls and balance sheets
- Tax returns
- Payroll reports
- Review of any current or pending legal issues
- Copy of FedEx contract
- Settlement statements
7. Obtain Financing for FedEx Route.
If you’re unable to buy the route with your own cash, you can seek several financing options. This typically occurs during, or shortly after, the due diligence period.
If interested, KR Capital can help you prepare the necessary lender-required documents. We have completed upwards of 200 FedEx transactions, many of which included bank financing. We have a thorough understanding of the information lenders will need.
8. Complete In-Person Review.
When appropriate (and often at the discretion of the seller), the buyer will schedule a visit to the terminal for an in-person meeting. Here, you can tour the facilities and view the operation in action.
9. Sign Purchase Agreement.
One of the parties (either buyer or seller) will draft the first iteration of the purchase agreement. The opposing party will then review the draft and request edits as necessary. After both parties (and their legal counsel) have approved the document, the parties will sign the agreement.
10. Make a Deposit.
Once an escrow account is created, you will submit a deposit for the purchase. The deposit is either done at the LOI or purchase agreement stage, depending upon the circumstances of the deal.
11. Obtain FedEx Approval.
Once the purchase agreement is signed, the FedEx approval process can begin. You will need to draft and submit a request for information (RFI) to FedEx. This document is essentially a business plan and will include a description of your business goals, management plans, and customer service approach.
FedEx will use this RFI to evaluate your ability to fulfill your contractual obligations. You can view a sample RFI here.
Additionally, you will have a formal interview with a FedEx representative. We suggest consulting the seller in advance in order to prepare.
12. Complete the Route Transfer.
Upon FedEx approval, the funds and routes will transfer simultaneously. In total, the FedEx transfer process should take 45-60 days, but can vary depending on the terminal.
Ready to Buy a FedEx Route?
For more information on how to buy a FedEx route, visit the KR Capital blog. Our team of experienced brokers is ready to help prospective buyers find FedEx routes for sale. Call us at (503) 664-0753 or complete our buyer info request form.