{"id":183824,"date":"2023-11-13T00:39:06","date_gmt":"2023-11-13T00:39:06","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=183824"},"modified":"2024-05-22T02:10:34","modified_gmt":"2024-05-22T01:10:34","slug":"selling-a-franchise-considerations","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/franchising\/selling-a-franchise-considerations\/","title":{"rendered":"\u200b\u200bKey Legal Considerations When Selling a Franchise"},"content":{"rendered":"\n<p>Are you thinking about selling your franchise business? Many different reasons drive <a href=\"https:\/\/legalvision.co.uk\/franchising\/franchisee-sell-their-franchise\/\">franchisees to sell their units<\/a>. Selling a business can be a complex process to navigate, and there are crucial legal implications attached to a franchise resale. However, do not be discouraged. This article will break down the key legal considerations in selling a franchise in the UK so that you can confidently approach the process.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Planning the Sale&nbsp;<\/h2>\n\n\n\n<p>It is essential to begin the sale of your franchise with a well-thought-out plan. Selling a business does not happen overnight. It can take time. Therefore, there are several steps you should take to initiate the process of selling your franchise.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Check Your Franchise Agreement&nbsp;<\/h3>\n\n\n\n<p>Your first step should be to review the franchise agreement. The franchise agreement forms the basis of your legal relationship with the franchisor and your unit. It contains the terms you must follow to sell your franchise. It will include information about the:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>process of selling the franchise;&nbsp;<\/li>\n\n\n\n<li>fees you will need to pay; and<\/li>\n\n\n\n<li>franchisor\u2019s consent requirements.<\/li>\n<\/ul>\n\n\n\n<p>You should establish a clear path for the sale from your review of the franchise agreement.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Seek Legal Advice<\/h3>\n\n\n\n<p>Perhaps this is your first time selling a business. This can be a very complex process. As a result, you should seek the advice of an expert franchise lawyer early on. Franchise solicitors are well-versed in navigating this type of business sale and can help you prepare the business and relevant business documents. Through the help of a lawyer, you can help prevent future legal issues from arising.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Financial Planning<\/h3>\n\n\n\n<p>It is a good idea to seek professional financial advice at this early stage as there are significant financial considerations. How you structure your franchise\u2019s sale determines the type and amount of taxes you will owe.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. Inform the Franchisor<\/h3>\n\n\n\n<p>You will need to <a href=\"https:\/\/legalvision.co.uk\/franchising\/selling-franchise-when-do-i-notify-franchisor\/\">inform the franchisor<\/a> of your decision to sell. They should be involved in the process from the start. You should refer to the franchise agreement, which will include details about:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>obtaining the franchisor\u2019s consent for the sale; and&nbsp;<\/li>\n\n\n\n<li>whether the franchisor must be offered the first right to buy the franchise business from you.<\/li>\n<\/ul>\n\n\n\n<p>The franchisor will also make the final decision on the suitability of a prospective buyer, so keep an open channel of communication. They may already have somebody in mind who is eager to fill the role.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Selling the Franchise<\/h2>\n\n\n\n<p>At this next stage of selling your franchise, you will need to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>consider a professional valuation of the business;&nbsp;<\/li>\n\n\n\n<li>get all necessary documentation together; and<\/li>\n\n\n\n<li>find a buyer.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">1. Consider a Professional Valuation<\/h3>\n\n\n\n<p>It is essential to establish the value of your business in order to market it to prospective buyers. What your franchise is worth depends on many factors, including its:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>assets;&nbsp;<\/li>\n\n\n\n<li>potential for growth;<\/li>\n\n\n\n<li>industry; and&nbsp;<\/li>\n\n\n\n<li>level of innovation.&nbsp;<\/li>\n<\/ul>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>An independent professional can evaluate the business and accurately provide its market value.<\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">2. Gather Necessary Documents<\/h3>\n\n\n\n<p>The sale of a business involves the preparation of multiple documents, including documents that either you or the franchisor must provide prospective buyers with.&nbsp;&nbsp;<\/p>\n\n\n\n<p>These documents include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a <a href=\"https:\/\/legalvision.co.uk\/franchising\/how-should-i-use-franchise-disclosure-document\/\">franchise disclosure document<\/a> (if there is one);<\/li>\n\n\n\n<li>the franchise agreement;&nbsp;<\/li>\n\n\n\n<li>information about the business\u2019 accounts;&nbsp;<\/li>\n\n\n\n<li>a <a href=\"https:\/\/legalvision.co.uk\/business-sale-purchase\/selling-your-business-legal\/\">business purchase agreement<\/a>; and&nbsp;<\/li>\n\n\n\n<li>where the franchise business operates out of leased premises, the draft licence to assign after obtaining the landlord\u2019s consent to the lease transfer.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">3. Find a Buyer<\/h3>\n\n\n\n<p>There are a handful of ways you can find a buyer. Firstly, ask the franchisor if they have a potential buyer in mind. Secondly, tell your employees you are considering selling your franchise. Perhaps one of them would like to buy it. Alternatively, you can find a buyer by marketing your business.&nbsp;<\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p><span style=\"font-weight: 400\">To create a marketing plan, think about:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">marketing strategies;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">the type of buyer who would be suitable for your franchise; and<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">a rough timeline for sale completion. <\/span><\/li>\n<\/ul>\n<\/div>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    <script>\nvar gform;gform||(document.addEventListener(\"gform_main_scripts_loaded\",function(){gform.scriptsLoaded=!0}),document.addEventListener(\"gform\/theme\/scripts_loaded\",function(){gform.themeScriptsLoaded=!0}),window.addEventListener(\"DOMContentLoaded\",function(){gform.domLoaded=!0}),gform={domLoaded:!1,scriptsLoaded:!1,themeScriptsLoaded:!1,isFormEditor:()=>\"function\"==typeof 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As you approach completion, all documents should be in order, you should have found a buyer, and you will set a closing date. At this point, ensuring that your franchise continues to operate smoothly is crucial, as you remain responsible for the business until you complete the sale.&nbsp;<\/p>\n\n\n\n<p>On the closing date, the buyer will transfer the necessary funds, and the buyer will obtain ownership of the franchise.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p>Selling a franchise can be a complex, time-consuming, and stressful time. You must seek the advice of professionals who can guide you through the process of your business sale if you feel that you need it. With careful planning, preparation, and execution, you will set the sale up for success.&nbsp;<\/p>\n\n\n\n<p>If you are selling your franchise and would like expert legal advice, our experienced <a href=\"https:\/\/legalvision.co.uk\/franchise-lawyers-lp\/\">franchise lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <a href=\"https:\/\/legalvision.co.uk\/membership\/\">membership page<\/a>.<\/p>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"222bf55a0a\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/183824\" \/>            <input value=\"https:\/\/legalvision.co.uk\/franchising\/selling-a-franchise-considerations\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"\u200b\u200bKey Legal Considerations When Selling a Franchise\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Are you thinking about selling your franchise business? Many different reasons drive franchisees to sell their units. Selling a business can be a complex process to navigate, and there are crucial legal implications attached to a franchise resale. However, do not be discouraged. This article will break down the key legal considerations in selling a<a href=\"https:\/\/legalvision.co.uk\/franchising\/selling-a-franchise-considerations\/\">Continue reading <span class=\"sr-only\">&#8220;\u200b\u200bKey Legal Considerations When Selling a 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