It is most likely that the seller will want the initial buying group membership fee amount reimbursed to him when you acquire the business. Make sure that it is not an extra and is part of the overall consideration that you are willing to pay for the business.
If you are considering acquiring a business that is a member of a buying group it is important that you perform some due diligence on the buying group as well as the business itself. The amount of due diligence that you perform should be proportionate to the value of the buying group to the overall business. If the buying group is presented by the seller as one of the keys to the businesses previous success then you should do a substantial amount of due diligence. If on the other hand the buying group has a limited impact on the overall sales and profits of the business that you are considering acquiring then the due diligence can be dramatically reduced.
It is very important that you fully understand all of the inherent costs and contractual commitments that you are going to have that will affect the basic day-to-day operation of your business if in fact a buying group is part of the business you are considering acquiring.
Marketing Groups:
Marketing Groups are the buying group equivalent for service industries and are designed to serve a similar function to the buying group by allowing members to share a common set of services and marketing programs and thereby reduce overall expenses.
One of the most prevalent areas where you will find marketing groups is in the hotel industry. Most of the large hotel groups are independent businesses that are part of a marketing group.
In the hotel industry the marketing group will usually supply a common name, which should represent a level of service and quality, a common reservation center, directories, advertising, and other sales, marketing and promotional materials.
Sometimes it can be very difficult to identify the differences between a marketing group and a franchise, as the services may be somewhat similar. One of the key differences is that the marketing group provides a collection of services and products rather than a preformatted method of doing business. As a member of the marketing group you can generally pick and choose which of those services and/or products that you wish to utilize and which you believe will enhance your business and profits. Whereas a franchise provides you with a formatted method of doing business and generally tells you exactly how you are to operate. Another difference is in the duration of the relationship. In general the duration of the relationship with a marketing group is monthly or yearly whereas the relationship with a franchisor is over a number of years, usually not less than five.
To my knowledge marketing groups do not fall under any municipal, state or federal legislation.
Whether it be a buying or marketing group you must remember that their will most likely be some stipulations as to how you are to operate your business and possible what you can sell and who you can purchase it from. If your plans are to acquire the business and then expand in some direction you better make sure that the agreements that you have with these entities will allow it.