How We Broker FedEx Routes
Selling a business is likely one of the largest financial decisions in a person’s life and one that must not be taken lightly. The transaction should be carefully managed by a professional broker.
As brokers dedicated exclusively to selling FedEx1 routes, it is vitally important that we understand the FedEx sales process inside and out. Unlike a traditional business sale, there are a wide number of nuances associated with the successful sale of a FedEx business.
For instance, the set of routes (and corresponding vehicle fleet) must be valued appropriately in order to ensure the contractor receives a fair market value for the business. This begins with a deep understanding of settlement statements, vehicle values, financial statements, local and regional market conditions and more. Our firm analyzes each of these components in great detail in order to arrive at a realistic value range for the business. During the course of our analysis, we will identify areas within the operation that may present significant upside for the contractor and his/her buyer. By identifying these areas for improvement, we are able to create a stronger value proposition and build the case for a higher price on the business.
Once the business is prepared for sale, our team approaches the buyer market in several different ways. Our proprietary buyer network extends nationwide and represents thousands of buyers who have specifically expressed an interest in buying FedEx routes. The majority of these buyers have been financially screened, sorted geographically, and already have a general understanding of the FedEx business model.
Once we’ve determined that a buyer has a sincere interest in the FedEx opportunity that we represent, the buyer is required to sign a Confidentiality Agreement and provide proof of funds. This qualification process ensures that we aren’t working with unqualified buyers. By virtue of the Confidentiality Agreement, this additionally ensures that the buyer agrees to maintain strict confidentiality and not discuss the details of the FedEx opportunity with any outside parties. Following this screening phase, the buyer is given the information on the business with Client’s approval. Generally the buyer’s review of this information yields various financial and operational questions. Our firm works with the buyer and seller to coordinate either a conference call or in-person meeting to go through any questions that the buyer might have.
Once all questions have been answered, and assuming there is mutual interest in moving forward, the buyer is asked to submit a Letter of Intent which will stipulate the terms of the offer. In conjunction with the Letter of Intent, the buyer is also asked to submit a reasonable deposit (held either at a title company or law firm). This deposit helps assure the contractor that the buyer has a sincere interest, and additionally grants the buyer an exclusivity period during which he/she goes through the due diligence information. KR Capital works with the FedEx contractor and their tax/legal counsel to pro-actively prepare the due diligence information that the buyer will likely want to review. Having this information compiled ahead of time not only expedites the process, but gives the buyer comfort that the information is accurate and well-organized.
Following the due diligence period, KR Capital works with the buyer and FedEx terminal management to navigate the FedEx approval process. The FedEx approval process can be a timely and frustrating endeavor without an intimate knowledge of how the system works. Buyers must establish a corporation (C or S) in order to apply for FedEx approval. Buyers must additionally prepare and draft an RFI (business plan) which will ultimately be submitted to FedEx for approval. KR Capital is fully equipped to help buyers draft their RFI and has multiple samples on file. This is a huge benefit for selling contractors who are looking to expedite the closing process.