Key Considerations When Drafting an Asset Purchase Agreement for a Franchise Restaurant Business

If you are planning to buy or sell a franchise restaurant business, it is essential to have a well-drafted asset purchase agreement in place. An asset purchase agreement is a legal document that outlines the terms and conditions of a transaction in which the buyer purchases the assets of the business from the seller. It is critical to ensure that the agreement reflects the understanding of both parties and protects their interests.

Here are some key considerations to keep in mind when drafting an asset purchase agreement for a franchise restaurant business:

  1. Identify the Assets to be Purchased

The asset purchase agreement should clearly specify the assets that the buyer is acquiring from the seller. This should include a detailed list of equipment, inventory, furniture, fixtures, licenses, and permits. It is also essential to identify any assets that are not being transferred as part of the sale.

  1. Consider the Franchise Agreement

If the franchise agreement is being transferred along with the assets of the business, it is crucial to review it and ensure that the buyer understands and agrees to its terms. The agreement should also address any obligations that the seller may have under the franchise agreement after the sale.

  1. Address Liabilities

The agreement should also identify and address any liabilities associated with the business. This may include outstanding debts, taxes, and employee liabilities. The parties should agree on how these liabilities will be handled and ensure that they are properly addressed in the agreement.

  1. Determine the Purchase Price and Payment Terms

The agreement should clearly specify the purchase price and payment terms. This should include any deposits, down payments, and the balance of the purchase price. It is also important to address any contingencies related to financing and payment.

  1. Address Closing and Post-Closing Obligations

The agreement should specify the closing date and outline any closing requirements, such as the transfer of licenses and permits. It should also address any post-closing obligations of the parties, such as the buyer’s obligation to operate the business in accordance with the franchisor’s standards.

  1. Include Dispute Resolution Mechanisms

To avoid costly and time-consuming litigation, the agreement should include dispute resolution mechanisms such as arbitration or mediation. This can help the parties resolve any disputes that may arise in a cost-effective and efficient manner.

Working with an experienced franchise lawyer can help ensure that the asset purchase agreement reflects the parties’ understanding and protects their interests. A lawyer can also help identify any legal issues that need to be addressed and ensure that the agreement complies with applicable laws and regulations.

Contact Falcon Law PC today for a free consultation if you need assistance with drafting an asset purchase agreement for a franchise restaurant business. You can reach us at or 1-877-892-7778. Our experienced lawyers can provide you with guidance and support throughout the transaction.

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