- JFSC's fee structure is complete success-fee. Fees apply only upon closing — no retainer, no interim fee, no monthly advisory fee.
- Calculation uses the industry-standard Lehman formula. The calculation base, minimum fee, and fee-timing schedule are disclosed in writing before contract signing, in compliance with the 17-item mandatory disclosure of Japan's SME M&A Guidelines (3rd edition).
- Specific amount ranges vary by transaction size, structure, and required specialist-coordination scope. We disclose individually under NDA at the no-cost consultation stage.
1. The Choice of Complete Success-Fee
JFSC's fee structure means the advisory fee is incurred only when an M&A transaction is completed. We do not charge retainers, interim fees, monthly advisory fees, or contract signing fees.
The reason we adopt this structure is to support the owner's optimal decision-making. In a model with retainers or monthly fees, the advisor develops a commercial incentive to "keep the engagement alive" or "push the M&A forward" — an incentive that does not necessarily align with the owner's interest.
Our basic posture is: "the judgments to proceed, to pause, or to stop should not be constrained by fees." After NDA signing, we work alongside the owner through enterprise-value organization, option mapping, and initial matching with potential buyers. If, after this, the conclusion is "we are not going to move at this time," no additional fees arise.
2. The Calculation Framework
2-1. The Lehman Formula (industry standard)
The Lehman formula applies tiered percentage rates based on the transaction consideration (or enterprise value, total transferred assets, etc.). It is the most widely used method in Japan's M&A intermediary industry. The METI / Small and Medium Enterprise Agency SME M&A Guidelines 3rd edition lists it as a typical calculation example.
| Transaction-value band | Rate |
|---|---|
| Portion up to JPY 500 million | 5% |
| Portion JPY 500 million to JPY 1 billion | 4% |
| Portion JPY 1 billion to JPY 5 billion | 3% |
| Portion JPY 5 billion to JPY 10 billion | 2% |
| Portion above JPY 10 billion | 1% |
Source: Typical example shown in the METI / Small and Medium Enterprise Agency "SME M&A Guidelines (3rd edition)." Actual application by individual M&A support organizations varies by transaction size, structure, and contract terms.
• Transfer consideration of JPY 100 million: JPY 100 million × 5% = JPY 5 million. However, where a minimum fee is set (e.g., JPY 7 million), the minimum fee applies, giving JPY 7 million.
• Transfer consideration of JPY 300 million: JPY 300 million × 5% = JPY 15 million.
2-2. The Three Calculation Bases
Even with the same Lehman formula, the actual fee can change substantially depending on the calculation base. Japan's SME M&A Guidelines 3rd edition explicitly designates the disclosure of the calculation base as a mandatory disclosure item. The three principal bases are:
| Calculation base | Content | Characteristic |
|---|---|---|
| ① Share-transfer-consideration basis | The actual share-transfer consideration received by the seller-owner | Tends to be the smallest figure; clearest to the seller |
| ② Enterprise-value basis | Share-transfer consideration + interest-bearing debt | Larger than ①, since debt is included |
| ③ Total-transferred-assets basis | Share-transfer consideration + interest-bearing debt + working capital, etc. | Largest figure; total fee tends to be highest |
For an identical transaction, the actual fee can vary by multiple-fold depending on the calculation base chosen. The SME M&A Guidelines 3rd edition imposes an obligation on intermediaries to disclose this clearly before contract signing.
JFSC, before contract signing, always discloses in writing: which calculation base is adopted, whether a minimum fee applies and at what level, and the projected total fee range. Specific amounts vary by transaction size, structure, and required specialist coordination (attorneys, tax accountants, CPAs, etc.), and are presented individually at the no-cost consultation.
2-3. SME M&A Guidelines 3rd Edition — the 17 Mandatory Disclosure Items
The SME M&A Guidelines 3rd edition, published by Japan's Small and Medium Enterprise Agency on August 30, 2024, codified the obligation to disclose 17 items in writing before contract signing. JFSC complies with this framework and discloses all items including, among others:
- Fee calculation method, rate, and calculation base
- Presence and amount of minimum fee
- Whether the intermediary receives fees from the counterparty (buyer-side), and the amount
- Qualifications, experience, and completion track record of the responsible advisor
- Scope of services (including whether DD and PMI support are included)
- Termination terms and any penalty provisions
- Conflict-of-interest prevention measures
3. Freedom from Opaque Fee Structures
The SME M&A Guidelines 3rd edition (August 2024) enumerates, for the first time, five specific categories of prohibited conflict-of-interest acts by intermediaries:
- Priority matching, or improperly low-price inducement, in exchange for additional fees from the buyer side
- Unilateral preferential treatment of repeat buyer-clients
- Demanding additional fees equal to the gap between seller and buyer positions
- Deliberate non-transmission, or false transmission, of communicated items
- Withholding of information favorable to only one side
The Guidelines additionally state that direct buyer-side due diligence by the intermediary itself is inappropriate due to conflict-of-interest concerns. JFSC works on the premise that financial, legal, and tax DD are independently commissioned to specialists in each field (CPAs, tax accountants, attorneys), and serves as the coordinating party.
4. Fee Timing and Process
| Phase | Main activities | JFSC fee |
|---|---|---|
| ① Consultation & initial analysis | NDA signing / enterprise value organization / option mapping | No-cost |
| ② Matching & initial negotiation | Buyer candidate exploration / LOI / MOU | No-cost |
| ③ DD & final agreement | DD coordination / SPA preparation | No-cost |
| ④ Closing | Consideration settlement / share transfer completion | Success fee triggered |
| ⑤ PMI support (optional) | Practical support for integration process | Separate, per engagement |
Specialist fees during DD (CPA, tax accountant, attorney, etc.) are paid directly to each specialist. These are separate from JFSC's advisory fee.
The owner's final decision remains free, from initial consultation up to the moment immediately before closing. Designing the structure so that fees do not constrain decision-making is the core of JFSC's complete success-fee model.
5. Related Tools and Articles
JFSC Tools
- Fee-Comparison Simulator — Industry-range fee structure comparison across multiple intermediaries (Japanese version: /fee-sim/)
- Enterprise Value Simulator — Self-calculate transfer consideration range (Japanese version: /kabuka-sim/)
- 10-Minute Self-Diagnosis — Organize where you stand and what comes next (Japanese version: /shindan/)
- M&A Process — The full five-phase process
Primary Sources
Frequently Asked Questions
Q1. What exactly is a complete success-fee structure?
A fee structure in which the advisory fee is incurred only when the M&A transaction is completed — no retainer, no interim fee, no monthly advisory fee. It is the structural design that ensures the advisor's commercial interest does not constrain the owner's decision-making. No fees apply across all phases from initial consultation through buyer exploration and up to the moment immediately before final contract.
Q2. What is the minimum fee?
Minimum fees in the Japanese SME M&A intermediary market typically fall in the JPY 5-10 million range (illustrated in the calculation example above using a JPY 7 million floor). The exact minimum applicable to a given engagement depends on its size, structure, and required specialist-coordination scope. Under Japan's SME M&A Guidelines 3rd edition, JFSC discloses the applicable minimum in writing as part of the 17 mandatory pre-contract items, before any engagement begins. Specific figures are communicated individually under NDA. Please feel free to reach out via our no-cost consultation.
Q3. How is the Lehman formula different from other calculation methods?
The Lehman formula applies tiered percentage rates based on transaction-value brackets, and is the most widely adopted method in the industry. Alternatives such as fixed-fee or hourly-charge models exist, but in Japan's SME M&A practice the combination of complete success-fee plus the Lehman formula is standard.
Q4. Does the calculation base (share-transfer consideration / enterprise value / total transferred assets) change the fee?
Yes. With the same Lehman rates, the total fee can differ several-fold depending on the calculation base. Japan's SME M&A Guidelines 3rd edition imposes a pre-contract obligation on intermediaries to disclose the calculation base. JFSC's adopted base and calculation examples are presented at the initial no-cost consultation.
Q5. If we decide to halt mid-process, what fees apply?
Because we operate on complete success-fee, no JFSC advisory fee is owed if the M&A is halted before closing. Note that specialist fees (CPAs, tax accountants, attorneys) incurred during the process are paid directly to each specialist — that aspect deserves attention. The decision to withdraw remains the owner's, all the way through.
Q6. Does this fee structure apply to cross-border deals or to consulting that includes pre-approach meetings with specific targets?
Cross-border (international) engagements, approaches that involve pre-approach meetings with specific potential buyers, and consulting that includes strategy formulation or PMI design may operate outside the fee structure described on this page. The fee structure for such engagements is designed individually based on the nature, complexity, and required specialist-network scope. Please make contact in advance to discuss.
Discuss specifics under NDA
Start No-Cost ConsultationConfidentiality and Disclaimer
The content of this page is general information assembled and structured by Japan Financial Strategy Center, Inc. (Registered M&A Support Organization under the Small and Medium Enterprise Agency; Full member of M&A Support Organization Association) from JFSC's own practitioner perspective, based on official sources including the SME M&A Guidelines 3rd edition (August 2024) and JFSC's practical experience.
Decisions on individual fee contracts, contract terms, tax treatment, or legal procedure should be made in consultation with the appropriate Japanese-licensed specialists (attorneys, tax accountants, certified public accountants, judicial scriveners, administrative scriveners, etc.). For details on JFSC's fee structure and applicable conditions, please reach out via our no-cost consultation for individual guidance.