Pet Care Business Due Diligence Checklist for Buyers
By the time a buyer signs a letter of intent on a pet care business, they have usually toured the facility, watched pets being dropped off and picked up, and reviewed summary financials. Pet care business due diligence is where those impressions are tested against records, licenses, agreements and inspections. Because the business is responsible for the safety and well-being of animals, diligence deserves particular care.
This checklist gives a broad overview for buyers of established, non-veterinary pet care businesses such as boarding, daycare, grooming and combined facilities. Segment-specific issues and the lease are covered in more depth in separate articles. This is not legal, regulatory, zoning or tax advice; requirements vary by jurisdiction, so work with qualified professionals on the matters that apply to your transaction.
1. Financial Records
- Business tax returns for several years
- Profit and loss statements and balance sheets, including year-to-date
- Bank statements
- Booking or point-of-sale reports showing revenue by service
- Records of prepaid packages, memberships and gift cards that may need to be honored
- Payroll records and owner compensation
- Existing debt and liens
Compare tax returns, financial statements, booking reports and bank deposits. Consistent records support the price; unexplained gaps deserve questions.
2. Licenses, Permits and Inspections
- Business licenses and any kennel, boarding, grooming or animal-care permits, where required
- Whether licenses and permits transfer or must be newly obtained by a buyer
- Inspection reports and any findings, violations or complaints
- Any limits on the number of animals the business is permitted to care for
Requirements vary by jurisdiction. Permitted capacity may depend on licenses, zoning, facility configuration and local rules, not physical space alone.
3. Incidents, Safety and Insurance
- Incident logs, including injuries to animals or people and how they were handled
- Claims history and any pending disputes
- Insurance policies, coverage types and limits
- Written safety, sanitation and emergency procedures
- Vaccination and intake requirements for pets in care
Incident history is a diligence consideration that can affect reputation, insurance and risk; have counsel review anything significant.
4. Staffing
- Employee list with roles, tenure and pay structure
- Key staff pet owners know and rely on, such as managers and groomers
- Training practices and certifications, where applicable
- Any agreements, contractor arrangements or restrictive covenants
- Whether key employees intend to stay after the sale
5. Facility and Property
- Condition of kennels, play areas, flooring, drainage, ventilation and HVAC
- Outdoor areas, fencing and security
- Grooming stations and supporting systems, where applicable
- For owned property: title, survey, appraisal and inspections
- Zoning, permitted use and any noise-related history
For leased facilities, see our guide to the pet care facility lease.
6. Pet Owners and Reputation
- Active pet owner counts and retention trends from booking records
- Online reviews and complaint history
- Pet and owner records, and whether they transfer with the business
7. Contracts and Systems
- Booking and point-of-sale system subscriptions and data ownership
- Vendor agreements for supplies, waste removal and services
- Franchise agreements and franchisor approval requirements, if franchised
- Any leased or financed equipment that would need to be paid off or assumed
8. Segment-Specific Review
Boarding, daycare and grooming each raise distinct questions. See our guides to buying a dog boarding facility, a dog daycare business and a pet grooming business.
9. Items Your Lender Will Request
Lenders typically request many of the same records, plus the purchase agreement and your personal financial information. See our guide to pet care business loan requirements.
Using What You Find
Diligence findings may confirm the deal, change the price, add conditions to closing or lead you to walk away. Issues can be addressed through price adjustments, holdbacks, repairs before closing or other terms, subject to negotiation and lender requirements.
US Professional Funding works with buyers acquiring existing pet care businesses. Learn more about our pet care facility acquisition financing.
