ChicagoHome Chef sells with earnouts
Kroger bought Chicago-based Home Chef in 2018 for $200 million up front plus earnouts of up to $500 million over five years tied to milestones.
FoodNavigator-USA, 2018
Sell a business in Illinois
The road from today to the years after a sale runs through Illinois's rules. Here it is in the order you will meet them: where you stand, what the state takes, the rules of the sale, who buys, and what the money can do after.
ComplexityHighTax on the gain4.95% 2025Deal volumeVery highEstate taxEntity tax
Illinois is one of the busiest markets in the country for business sales, with buyers of every kind already active. The state's cut of the gain is modest, 4.95% at the top. Expect a tax on the business itself on the way out, a tax-clearance or bulk-sale notice before closing, a licensed broker, and an estate tax to plan the proceeds around.
Tax on the gain: Flat rate.
Today
Where you stand
Illinois taxes the gain at a flat 4.95 percent, taxes estates above $4 million, and wants a bulk sale notice ten days before closing.
Illinois had about 1.4 million small businesses in 2022, 99.6 percent of its firms; professional services led those with staff, and most larger Chicago companies surveyed in 2026 planned acquisitions.
Small business footprint
0.0M
small businesses
0.0M
employees
0.0%
of employment
SBA Office of Advocacy, 2022
Illinois had 1.4 million small businesses in 2022, 99.6 percent of all firms, employing 2.4 million people, or 43.7 percent of total employment.
Of 253,302 small firms with employees in 2022, professional, scientific, and technical services led with 34,825, ahead of other services at 30,024 and construction at 29,164.
A 2026 KPMG survey of 102 Chicago leaders at companies with over $50 million in revenue found 80 percent planning acquisitions and 7 percent planning to be acquired.
The elements this touches
- TmTime The years before you want out. It feeds the exit-readiness score and never moves the price; every other decision is planned against it.
ListenThe Illinois briefing, read aloud
The deal team on what changes when you sell a business in Illinois.
Before the letter of intent
What Illinois takes
The tax on the gain, and what to settle before a buyer names a price
A flat 4.95 percent on the gain, a replacement tax the business itself pays even as a pass-through, and an estate tax that starts at $4 million.
State tax on the gain
0.00%
Flat rate.
Tax Foundation, 2025
A founder on film
On what he learned about tax on the way to the sale.
Lewis Titus Wastewater purification and manufacturing · Wyoming
A flat 4.95 percent
Illinois taxes individual income at a flat 4.95 percent from the first dollar.
A replacement tax on entities
The personal property replacement tax takes 1.5 percent of net income from partnerships, trusts, and S corporations and 2.5 percent from other corporations, on top of income tax.
Estate tax from $4 million
Illinois levies an estate tax on estates above $4 million at rates from 0.8 to 16 percent.
The rate is the state's top rate on the gain for the year shown, the same figure as the indicator in the hero, so the two can never disagree.
The elements this touches
- TxTax Strategy The deal and entity structure, set before the letter of intent. FNDRS tracks whether it is in place. It never moves the price; it changes what you keep.
- ApAfter-Tax Proceeds What you keep at close. FNDRS records the pre-tax walk-away and the gap to your number. It never moves the price, and the tax on it is a question for your CPA.
Under contract and at closing
The rules of the sale
The rules a sale in Illinois runs under
A bulk sale notice goes to the Department of Revenue ten business days before closing or the buyer carries your tax debt, and business brokers register with the Secretary of State.
01File CBS-1 ten days ahead
The buyer must file Form CBS-1 with IDOR at least ten business days before a sale of the major part of stock, fixtures, equipment, or real property.
Illinois Department of Revenue, 2026
02The buyer carries your debt
Without a timely CBS-1 the buyer is personally liable for the seller's IDOR debt up to the value of the assets; a release issues only once everything is paid.
Illinois Department of Revenue, 2026
03Brokers register every year
Brokers of non-securities businesses register yearly with the Secretary of State under the Business Brokers Act of 1995; a real estate licence applies when real estate dominates the deal.
Illinois REALTORS (Sorling Northrup)
The elements this touches
- LcLegal & Compliance Contracts, licences, and filings in order and enforceable. The FNDRS valuation reads it, and the score moves the multiple.
- DrData Room The documents a buyer will ask for, ready before they ask. FNDRS tracks it in the deal-readiness report card; it decides how fast and how cleanly a deal closes.
One thing you would not guess
The state wants to read your deal: the bulk sales unit asks for the financing agreement and the sales contract to be emailed along with the notice.
IDOR asks that Form CBS-1 be emailed to its bulk sales unit together with the financing agreement and the signed sales contract.
When the process opens
Who buys
Who shows up for a business in Illinois
Chicago founders sell to strategics with earnouts attached: Home Chef went to Kroger in 2018 for $200 million up front and up to $500 million more over five years.
ChicagoSold on $250 million revenue
Founder Pat Vihtelic sold on $250 million of 2017 revenue after 150 percent growth, and Home Chef stayed a Chicago subsidiary running Kroger's meal business.
FoodNavigator-USA, 2017
The elements this touches
- SyStrategic Synergy What one buyer gains that another cannot. The buyer at the table prices it, which is why the sell-side process goes looking for them.
Day 0, and the years after
After the close
What Illinois lets the proceeds do
The $4 million estate tax threshold is the number that follows sellers home; Illinois trusts can opt out of the rule against perpetuities, but many sellers plan around domicile instead.
CloseDay 0
Proceeds land. What the state keeps of them is settled above; what it lets them do from here is below.
Qualified perpetual trustForever
The Statute Concerning Perpetuities exempts a qualified perpetual trust, which an instrument executed on or after 1 January 1998 can create by opting out of the rule.
Where FNDRS comes in
The post-exit wealth plan is the third act of the same engagement, and it starts in diligence, before the letter of intent, when a move or a trust can still change the answer.
FNDRSThe elements this touches
- EsEstate Architecture Trusts and ownership set up before the letter of intent. It changes what the family keeps, not what a buyer pays.
- ApAfter-Tax Proceeds What you keep at close. FNDRS records the pre-tax walk-away and the gap to your number. It never moves the price, and the tax on it is a question for your CPA.
People who walked it
Founders
Founders who worked with FNDRS, in their own words
From founders elsewhere
What founders say about working with FNDRS
No founder in Illinois is quoted yet. These are founders in other states, quoted word for word, each described by role and state.
1 of 3
“I definitely don't think we'd be in the same spot without you guys.”
No founder in Illinois is on film yet. These are founders in other states who worked with FNDRS.47 founders on film
Nearby
Other states in the Midwest
| Midwest | Tax on the gain | Complexity | Deal volume |
|---|---|---|---|
| Indiana | 3% 2025 | Low | Medium |
| Iowa | 3.8% 2025 | Medium | Low |
| Kansas | 5.58% 2025 | Medium | Low |
| Michigan | 4.25% 2025 | Medium | High |
| Minnesota | 9.85% 2025 | High | Medium |
| Missouri | None 2025 | Low | Medium |
| Nebraska | 5.2% 2025 | High | Low |
| North Dakota | 2.5% 2025 | Low | Very low |
| Ohio | 3% 2025 | Medium | High |
| South Dakota | None 2025 | Low | Very low |
| Wisconsin | 7.65% 2025 | Medium | Medium |
Your next step
The road starts with one step
Know where you stand in fifteen minutes, or talk the Illinois sale through with a dealmaker. Either way, no pitch and no obligation.
Selling in Illinois? Start with a conversation
No pitch and no obligation. If the honest answer is not yet, we will say so, and say what to work on.