Buying and Selling Franchise Businesses

Franchise businesses—whether restaurants, retail stores, service concepts, or hotel and hospitality brands—operate within a detailed contractual framework that governs everything from branding and operations to territory and renewal rights. DiTommaso Lubin, P.C.’s Business Purchases & Sales Practice Group represents buyers and sellers in the purchase and sale of franchise businesses, including transfers of existing franchised locations and multi-unit franchise portfolios.

Our attorneys understand how franchise agreements, disclosure documents, and franchisor policies interact with standard purchase and sale agreements, and we help clients navigate this intersection.

Helping Buyers of Franchise Businesses

For buyers of franchise businesses, we typically:

• Review franchise disclosure documents (FDDs) and franchise agreements, focusing on fees, royalties, advertising contributions, territory protections, renewal and termination rights, and transfer conditions.
• Advise on the structure of the purchase (asset vs. equity) and on compliance with franchisor-imposed requirements for ownership, capitalization, and management.
• Conduct due diligence on financial performance at the unit or portfolio level, including sales, profitability, and trends, as well as local market conditions and competition.
• Analyze lease and real-estate issues, including landlord consents and alignment between franchise terms and lease terms.
• Negotiate purchase agreements and ancillary documents in coordination with franchisor approval processes and transfer documents.

Helping Sellers of Franchise Businesses

For sellers, we focus on:

• Preparing for sale by reviewing existing franchise agreements, leases, and financial performance, and anticipating issues that may arise in buyer or franchisor due diligence.
• Structuring transactions to allocate risk appropriately while maximizing value, including the scope of representations and warranties and the terms of any post-closing obligations.
• Negotiating letters of intent and definitive purchase agreements that reflect franchisor timelines, approval processes, and transfer conditions.
• Coordinating with franchisors, landlords, and lenders to obtain required consents and to address transfer fees and other conditions to closing.

Disputes Arising from Franchise Business Transactions

We also represent parties in disputes arising from franchise business acquisitions, including:

• Fraud-in-the-inducement claims involving alleged misstatements about unit performance, local competition, or franchisor relationships.
• Claims that sellers breached representations and warranties regarding financials, compliance with franchise-system standards, or lease status.
• Disputes over post-closing obligations, including non-competition and non-solicitation agreements and cooperation with franchisor transition requirements.
• Conflicts involving franchisors, such as disputes over approval of transfers, enforcement of system standards, or termination of franchise agreements.

Talk With Our Franchise Business Transactions Team

If you are considering buying or selling a franchise business—or are involved in a dispute arising from a franchise transfer—our Business Purchases & Sales Practice Group can help you understand the legal and business issues involved.

Contact attorney Peter S. Lubin or attorney James V. DiTommaso for a free consultation.

Call 630-333-0333 or reach us through our online contact form.

This page is for informational purposes only and does not constitute legal advice. Contacting us does not create an attorney–client relationship. Past results do not guarantee a similar outcome.