We have several long-term contracts with critical suppliers and software vendors that lack clear change-of-control clauses. How do we audit and prepare our key supplier relationships during our exit runway so they do not stall the transaction?

Question

Tyler Smith · Accepted Answer

A successful exit requires that all your vital business assets are fully transferable. If your operations rely on key vendors or specialized software licenses that do not allow for a change of control without written consent, a buyer will flag this as a major risk.

You must conduct a comprehensive contract audit at least two years before you plan to go to market. Identify every critical vendor, supplier, and software platform that is essential to your daily operations. Review each agreement to find clauses relating to assignment, termination, and change of control.

For agreements that contain restrictive transfer clauses, you need to initiate discussions with those vendors well in advance. Do not tell them you are preparing to sell the business. Instead, frame the request as part of a corporate restructuring or a standard update to your operational legal framework. Work to amend the agreements to allow assignment to any successor entity.

If a key supplier refuses to cooperate, you must use your exit runway to find and onboard alternative vendors. Document these backup relationships and build them into your core operational workflows. By showing a buyer that you have diversified vendor options and fully transferable agreements, you eliminate a major due diligence risk and protect your operational continuity.