Sold my 12-year-old pet supply shop last spring. The buyer signed an asset purchase agreement and kept me on for a 90-day transition. About two months in, they slashed the return window from 30 days to 5 and stopped honoring manufacturer coupons. Now our Google rating has dropped from 4.7 to 3.9, and old customers are leaving one-star reviews specifically naming me and saying 'since the new owners took over.' I have a 3-year earnout tied to revenue, so this directly hits my payout. The APA doesn't have any customer service standards or review protections. Has anyone dealt with a buyer torpedoing the reputation you built? What leverage do I actually have here?
Post-Sale
What to do if a buyer changes customer service policies and causes bad reviews
Do you have a non-disparagement clause that runs both ways? Sometimes that's the only hook. Not sure it covers policy changes though
The earnout is your leverage, not the reviews. Document the revenue drop month over month and start a paper trail now. If they're cutting service to juice short-term margins while your payout is tied to revenue, that's a conversation your M&A attorney needs to have with theirs. A polite letter referencing the implied covenant of good faith usually gets attention when money is still on the table. Reviews are noise to them until the earnout payment is due.
Are the reviews actually naming you? That's the part I'd focus on. Publicly blaming a former owner is a different issue than a policy change.
I sold a hardware store three years ago and the buyer did something similar with delivery fees. I had no earnout so honestly I just let it go. My advice would be different if I'd had money on the line. You do.
Review responses from the new owner matter too. If they're replying defensively to those one-stars, it makes the hole deeper. You can't control that. What you can do is make sure your side of the transition is documented in case you need to renegotiate earnout terms later. Also check whether the APA has a 'material adverse change' provision.
The reviews naming you specifically — are they from people who knew you, or just guessing? Big difference.
Honestly this is why I tell people to sell for cash, and walk. Earnouts sound good on paper and then you're stuck watching someone else run your baby into the ground. No offense intended. I know that doesn't help you now.
Talk to a business litigator, not just your deal attorney. There may be a claim for tortious interference or breach of the implied duty if you can show they made these changes knowing it would reduce your earnout. It's a fight, but the threat alone can bring them to the table. Get the review screenshots and revenue numbers in one folder before you call anyone.
5 day return window on pet supplies is absurd. Of course people are angry
Would a public statement from you even help? Seems like it could just draw more attention to the connection between you and the shop. I'd stay quiet and work behind the scenes
I'm on the other side of this — I bought a business two years ago. My seller had a similar complaint and what actually got resolved wass a sit-down where both sides agreed to specific service benchmarks for the remainder of the earnout period. It wasn't in the original contract but it was cheaper for me than a legal fight. If the buyer is reasonable at all, propose an amendment. If they're not, you already know what you're dealing with.