Use the letter of intent to identify the proposed scope, economics and conditions. Have counsel review it before signing: calling a document nonbinding does not establish the status of every provision.
Describe the proposed purchase
Identify the parties, buyer entity, seller authority, asset or equity structure and whether land is included. State the price concept and its treatment of debt, cash, inventory and working capital. A headline number without these definitions can conceal a material disagreement.
Describe proposed financing, seller debt or contingent consideration separately from immediate closing cash. Clarify what assumptions underpin the proposal and which still depend on evidence. Do not suggest the lender has committed if the funding discussion is preliminary.
Set a workable investigation scope
Outline financial, equipment, property, environmental, contract and staffing review. Identify access arrangements and confidentiality controls. Determine when periods begin, how missing records are handled and what approvals the buyer needs to obtain.
Choose dates based on the required work and professionals’ availability. An arbitrary short deadline may invite rushed review or repeated extensions. Discuss who bears diligence expense if the proposed transaction does not proceed.
Ask counsel about binding provisions
Exclusivity, confidentiality, deposits, expenses, governing law and other provisions may warrant particular attention. Their effect depends on language and circumstances. This article is a negotiation preparation checklist rather than an opinion that a sample term is enforceable or safe.
Keep exclusivity proportional to a buyer’s readiness and the work needed. Record how extensions are agreed and who can terminate discussions. An owner should understand the practical restriction on alternative negotiations before signing.
Make the next document consistent
Track the open items the definitive agreement must resolve: representations, disclosures, liability treatment, assignment, required releases and closing deliveries. Avoid treating the letter as a substitute for the purchase agreement or for provider and lender approvals.
Before negotiating, book a call to map the key commercial terms with Jason. Bring the scope, funding stage and unresolved facts. Your attorney should draft or review the letter and explain obligations before either side relies on it.
Your decision worksheet
Use these questions to identify the records and decisions that matter to this topic. Bring the open items to your conversation; detailed documents can follow through an agreed private process.
| Question to resolve | Evidence to bring | Why it matters |
|---|---|---|
| Does price mean the same thing to both sides? | Debt, cash, property and working-capital definitions. | Resolve scope before deeper diligence produces incompatible expectations. |
| Which terms bind me? | Counsel review of the actual language. | Understand exclusivity, deposits, expense and notice obligations. |
| When do periods start? | Access plan and a realistic evidence-delivery sequence. | Avoid deadlines that run before the necessary records are available. |
| What remains for the purchase agreement? | A shared open-term list with responsible reviewers. | Keep commercial assumptions connected to final documentation. |
Sources & evidence
- SBA: buying an existing business or franchise
Acquisition preparation and differences between independent and franchised businesses. - IRS: sale of a business
Asset categories and purchase-price allocation; not a tax calculation.
Links checked for this editorial pass on October 14, 2026. General reference material does not establish a site’s revenue, value or eligibility. Examples are illustrative where labeled.
Continue your preparation
- Illinois car wash due diligence: an evidence checklist
- Funding readiness for an Illinois car wash purchase
- Financing an Illinois car wash acquisition
Explore an earnings and cash-flow scenario, then book a call to review your questions.
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