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There’s a lot to consider when you’re selling a business. Things become even more complicated when your business is an individual franchise, as you must negotiate with both the franchisor and the purchaser while keeping up with the evolving legal landscape in 2025.
A franchise is a type of business structure whereby the owner of a business (the franchisor) licenses others (the franchisee) to use the business’ trade name and operating structure. This model has seen further refinement in recent years, ensuring greater clarity in the rights and obligations of both parties.
If you are an existing franchisee and are hoping to sell your business to a new franchisee, it’s a good idea to have a clear Franchise Sale Agreement in place. This document not only streamlines the sale process but also mitigates future liabilities.
Why Do I Need A Franchise Sale Agreement?
A Franchise Sale Agreement is a legally binding document that formalises the sale of an individual franchise. In 2025, with updated regulatory requirements and market trends, having a robust agreement is more critical than ever.
This agreement sets out your obligations as a franchisee, confirms your rights to payment, and ensures you are protected from future liability should any issues arise after the sale. Without it, you risk being held accountable for matters that occur long after you have transferred ownership.
Clearly articulating the details of the sale – including the purchase amount, the assets included, and any negotiated conditions with both the purchaser and the franchisor – helps prevent ambiguity and avoids potential disputes, thus facilitating smoother future relations.
What’s Included?
A Franchise Sale Agreement covers the essential terms to ensure all parties are aware of their rights and obligations during and after the sale. These include:
- Purchase amount
- Assets included in the sale
- Any additional details negotiated with the purchaser and franchisor
Additional Considerations in 2025
With recent updates to franchising law in the UK, it is essential to review your Franchise Sale Agreement regularly to ensure compliance with current standards. Enhanced disclosure requirements now demand a clearer outline of financial arrangements and operational liabilities. It is also advisable to revisit your employment arrangements; for further guidance on this matter, our article on Employment Contract Essentials provides valuable insights. Additionally, for a deeper understanding of legal documents, check out our comprehensive guide on What Makes a Contract Legally Binding.
Need Help?
Even if you have already agreed on terms with the potential buyer and franchisor, it remains a wise decision to have an experienced lawyer draft your Franchise Sale Agreement. Our legal team will clearly set out the terms of sale, offer expert advice, and make recommendations to ensure you’re well-protected against any future disputes. Alternatively, if you haven’t finalised all terms yet, our lawyers can advise on how best to safeguard your interests down the track.
Feel free to get in touch at [email protected] or call 08081347754 for a free, no-obligation chat about updating your franchising arrangements for the current market.
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