Closing a store requires considerable effort and attention and the items listed below, in no particular order, are minimal considerations when terminating a franchise and closing a dealership operation.

THIS CHECKLIST IS NOT "ALL INCLUSIVE". YOU SHOULD CONSULT WITH YOUR ATTORNEY AND ACCOUNTANT AND THIS LIST SHOULD BE CONSIDERED AS AN ADDITIONAL AID FOR YOU TO USE TO BUILD UPON WHEN YOU CONFER WITH THEM.

Basic Preparation

1. Officers, Directors and Shareholders

Be certain to hold both directors and shareholders meetings and to obtain resolutions from each entity, authorizing the dealer to liquidate the dealership, or a substantial portion of the dealership's assets.

Determine whether or not the board and shareholders may authorize you a termination bonus and prepay your for your services in "winding down the business". Consult with your accountant and attorney to determine what would be a reasonable amount of compensation in the event a company creditor challenges the transaction.

Determine if it is reasonable for officers to buy themselves and their spouse vehicles. Pay "Net" "Net", as that would be the sales price if the vehicle were returned to the factory or sold to a purchaser of the business.

The officers should open a new bank account, at a different bank, and: (a) use a PO Box, or Private Mail Service as a mailing address; and (b) use a different check color in order to easily determine pre and post closing checks written.

Authorize payment to and pre-pay the company's attorney and accountant with a retainer. Their services will be needed to properly close the business and the company might not be able to pay them later.

Authorize pre-payment of whatever services or supplies the company will need to be serviced during the wind-down period. For example, property and personal insurance, real property taxes (if the property is not owned by a third party), rent, utilities and such.

2. The Facility and Insurance

A one-sheet summary of the lease should be attached to the original, in order to facilitate matters. The summary should include such items as: the dates of the base term; the base rent; the current rent; the dates of any option periods, together with notations regarding rent increases; the facility ownership; the lessee and lessor; a notation as to whether or not the factory has point, or site protection; the rent as an equivalent to the dollar value per new unit sold; and, a notation as to WHETHER OR NOT THE LEASE IS ASSIGNABLE and under what conditions.

Other considerations regarding the facility lease include violations of the ADA, hazardous materials (underground gas tanks, or underground oil disposal tanks) being located on the property.

Owned Facilities

With respect to receiving "factory termination assistance", some Sales and Service Agreements, General Motors for example, make a distinction between "owner occupied" and "leased" dealership facilities. Be sure to read your Sales and Service Agreement in order to understand and be able to capitalize on the distinctions.

Leased Facilities

If the selling dealer's rent factor prior to the sale of the dealership is within factory guidelines the factory should make the dealer's lease payments for the period specified in the Service and Sales Agreement. (See, however, the EPA section.)

Check with your insurance agent to determine the requirements for insuring an empty building.

Other Insurance

In addition to facility insurance the dealer will need a "tail" or rider on his or her garage keepers insurance. Most insurance today is "claims made" versus "occurrence".

In actual practice, most cases that are settled are settled within the insurance policy limits and the insurance company will have paid for both the defense and the settlement.

With respect to Medical Insurance, arrange for COBRA all employees of the company. Again, officers and directors may be able to include medical insurance payments as part of their wind-down compensation.

3. UCC, Mechanic