Buying out the founder of a campground with fifty returning families

The situation

What worried Ivan most was not the purchase price. It was the phone list. For eleven seasons he had managed the day-to-day running of a campground east of the Humber, and he knew that roughly fifty families returned to the same numbered sites every May, some of them for two generations running. If even a third of those families did not come back the year after the sale, the new owners would be carrying a mortgage on a business that could no longer support it.

Ivan, Milica and Diego had worked together at the campground for years without any of them owning a share of it. Milica taught grade four at a local elementary school and Diego worked as a librarian, and both had put in seasonal hours at the campground on top of their regular jobs because they liked the place and trusted Ivan's read on it. When the founder decided to retire and offered the three of them first chance to buy, they treated it as the opportunity it was, pooling savings and a joint loan to put together an offer in the upper end of a business valued in the seven figures.

The seller had used an accountant for years to keep the books and had leaned on the same person to help structure the sale. The accountant was competent with the numbers but had never handled the transfer of a seasonal recreational business before, and had prepared the disclosure schedule by listing the site agreements as part of the campground's ordinary contracts, the same category as the propane supplier and the laundry service. Nobody on the seller's side had asked a basic question: were the camper agreements actually contracts that ran with the business, or were they personal arrangements between the founder and each family that happened to get renewed every spring on a handshake and an email.

By the time Ivan brought the deal to us, an agreement of purchase and sale was largely drafted and a closing date was set for before the next camping season. He explained what he was actually afraid of, plainly: not the legal mechanics, but showing up in May to a campground half full of empty sites because the families who had always come back did not know they were supposed to sign anything new, or worse, decided not to bother.

The gap nobody had noticed

We asked to see the actual paperwork behind the fifty-odd seasonal arrangements, rather than the summary the accountant had prepared, and the gap became obvious quickly. There was no master lease and no standard-form site agreement that could simply be assigned to a new operator. Most of the arrangements were personal letters from the founder confirming a site number and a seasonal rate, renewed informally each year, with no clause addressing what happened if the campground changed hands. A handful of longer-standing campers had older written agreements that did include an assignment clause, but even those required the founder to give notice and, in some cases, required the camper's written consent before the agreement could be transferred to someone else.

In plain terms, the thing Ivan, Milica and Diego were paying for as part of the campground's value, an established base of fifty returning families, was not an asset that automatically came with the business at all. It was a set of personal promises the founder had made, and legally those promises stayed with the founder unless each camper agreed to carry them forward to the new owners. The accountant's schedule had not distinguished between the propane contract, which was a genuine assignable commercial agreement, and the camper letters, which were not. That distinction had never been tested because the founder had never sold the business before.

This is a common blind spot in the sale of any business built on repeat, informal relationships rather than binding contracts. A buyer's advisor who is used to reviewing supplier agreements and leases can miss that a business's real value, the customers who keep coming back, may not be captured in a document at all, because nothing about a personal arrangement looks unusual until someone asks whether it can legally be handed to a stranger. Nobody had acted in bad faith. The founder genuinely believed the campers would stay, and probably most of them would have, but 'probably' is not something a bank or a set of new owners with a joint mortgage can rely on.

We flagged the issue to Ivan's group before signing anything further and explained the practical choice in front of them: walk away from a deal they had wanted for years over a risk that might not materialize, or find a way to manage the risk directly rather than discover its size after closing, with no way to undo the purchase once the season had already started.

What we did

1. Reclassified the camper arrangements in the disclosure schedule. We went through all fifty-odd files individually and separated genuine assignable contracts from personal, non-transferable arrangements with the founder, so the buyers knew exactly which sites carried real legal continuity and which did not before they committed further money, and so the purchase agreement no longer treated fifty different relationships as if they were identical.
2. Built a holdback into the purchase price. Rather than pay full value for an assumed base of fifty returning families, we negotiated a price structure where a portion of the purchase price was held back and released to the founder in stages, tied to how many campers actually signed new agreements with the buyers by a date after closing, so the risk of an inflated headcount sat with the party best able to prevent it.
3. Asked the founder to introduce the buyers personally. Because the campers' loyalty was to the founder as a person, not to a business name, we arranged for the founder to send a personal letter to every seasonal camper introducing Ivan, Milica and Diego before closing, which carried far more weight than a formal notice from a new owner would have and gave families time to ask questions before the season began.
4. Drafted new, assignable site agreements. Every returning camper was offered a clear, written seasonal agreement with the new owners on comparable terms to what they had before, replacing the informal letters with something that could survive a future sale without the same problem recurring, and giving both the campers and the new owners a document each could actually rely on.
5. Set a realistic response deadline. We built a window of several weeks after closing for campers to confirm, long enough to reach people who might be away for the winter, but short enough that the buyers would know their real numbers before the season's site preparation costs came due, so cash flow decisions were made on real figures rather than hope.
6. Renegotiated with the founder on the shortfall. When it became clear that a small number of long-time campers would not be returning regardless of outreach, we went back to the founder to adjust the final holdback release rather than leaving the buyers to absorb the full loss alone, treating the shortfall as a shared consequence of a shared mistake rather than the buyers' problem to solve.
7. Documented the outcome for the lender. Because the purchase was financed partly through a joint loan, we prepared a clear written summary of the final camper numbers and agreements for the buyers' bank, so the financing was not put at risk by a gap that had been identified and managed rather than hidden, and so the lender saw a resolved issue rather than an open one.
8. Advised on record-keeping for future seasons. We recommended the new owners keep every camper agreement in a single, searchable file from the outset, with renewal dates and assignment terms clearly noted, so that if they ever sold the campground themselves, the next buyer would not face the same blind spot Ivan's group had just worked through, and would not need a lawyer to untangle a decade of handshake arrangements.

The outcome

Of the roughly fifty seasonal families, forty-four signed new agreements with Ivan, Milica and Diego before the season began. Six did not respond or chose not to return, for reasons that had little to do with the sale itself, several had already been considering other campgrounds closer to family, and one site went to new owners advertised through the campground's usual channels within the first month of the season.

The price adjustment meant the founder received somewhat less than the original asking figure, in the low tens of thousands below what had first been discussed, reflecting the six sites that did not carry forward. That was a real concession on the founder's side, not a token gesture, and it was the direct result of treating the camper base as something that had to be proven rather than assumed. Neither side pretended the six lost sites were a win to be spun; the final numbers went into the closing documents plainly, as a partial outcome rather than a full recovery.

Ivan, Milica and Diego closed on the business with a clear picture of what they actually owned going into their first season as owners, rather than finding out site by empty site over the summer. The compromise cost the founder some money and cost the buyers some of the certainty they had hoped for going in, but it left both sides with a deal neither had to walk away from, and it meant nobody discovered the shortfall for the first time in June with a mortgage payment already due.

By midsummer, the campground had filled two of the six vacated sites through ordinary word of mouth, and the new owners had a written record for every remaining site that would let them, or their own eventual buyer, avoid inheriting the same uncertainty again. The founder, for her part, left the sale with less money than first hoped for but with confidence that the campground would be run by people the longtime campers already trusted.

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