Franchise Sale Agreement for Australia

Franchise Sale Agreement Template for Australia

A comprehensive legal agreement governed by Australian law that facilitates the sale and transfer of a franchise business from an existing franchisee to a new franchisee, with the franchisor's consent. The document incorporates requirements under the Franchising Code of Conduct and other relevant Australian legislation, covering aspects such as asset transfer, intellectual property rights, employee matters, operational requirements, and ongoing obligations. It includes specific provisions for due diligence, warranties, and post-completion obligations while ensuring compliance with Australian franchise regulations and business transfer requirements.

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What is a Franchise Sale Agreement?

The Franchise Sale Agreement is a crucial document used when an existing franchisee wishes to sell their franchise business to a new franchisee in Australia. This agreement must comply with the Australian Franchising Code of Conduct and related legislation, making it more complex than a standard business sale agreement. It encompasses all aspects of the franchise transfer, including detailed provisions for the sale of assets, transfer of employees, assignment of lease (if applicable), and the necessary approvals from the franchisor. The document is essential for protecting all parties' interests and ensuring a smooth transition of the franchise business while maintaining compliance with franchise system requirements and Australian law. It typically includes comprehensive schedules detailing assets, inventory, employees, and other business components being transferred.

What sections should be included in a Franchise Sale Agreement?

1. Parties: Identification of the seller (existing franchisee), buyer (new franchisee), and franchisor

2. Background: Context of the franchise sale, including history of the franchise and reason for sale

3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation

4. Sale and Purchase: Core transaction terms including purchase price, payment terms, and what is being purchased

5. Conditions Precedent: Conditions that must be satisfied before completion, including franchisor approval

6. Due Diligence: Buyer's right to investigate the business and related procedures

7. Pre-Completion Obligations: Obligations of all parties before completion, including business operation requirements

8. Completion: Process and requirements for completing the sale

9. Post-Completion Obligations: Obligations after completion, including handover and transition requirements

10. Warranties and Representations: Statements of fact and promises about the business and franchise

11. Restraint of Trade: Restrictions on the seller's future business activities

12. Confidentiality: Protection of confidential information and trade secrets

13. Default and Termination: Consequences of breach and termination rights

14. Dispute Resolution: Process for resolving disputes between parties

15. General Provisions: Standard legal provisions including notices, governing law, and entire agreement

What sections are optional to include in a Franchise Sale Agreement?

1. Training and Support: Details of training provided by seller to buyer, used when extensive training is required

2. Employee Matters: Provisions dealing with transfer of employees, used when employees will transfer to the buyer

3. Lease Assignment: Provisions for transferring premises lease, used when premises are leased

4. Stock and Equipment Finance: Specific financing arrangements for stock and equipment, used when seller provides financing

5. Intellectual Property License: Additional IP provisions, used when seller owns supplementary IP beyond franchisor's IP

6. Third Party Contracts: Assignment of specific contracts, used when important third party contracts exist

7. Environmental Matters: Environmental compliance and liabilities, used for businesses with environmental impacts

What schedules should be included in a Franchise Sale Agreement?

1. Schedule 1 - Assets: Detailed list of all assets being transferred including equipment, fixtures, and fittings

2. Schedule 2 - Lease Details: Details of premises lease and assignment requirements

3. Schedule 3 - Employees: List of employees and their employment terms

4. Schedule 4 - Inventory: Detailed inventory list and valuation method

5. Schedule 5 - Contracts: List of contracts being assigned or novated

6. Schedule 6 - Purchase Price Allocation: Breakdown of purchase price across different asset categories

7. Schedule 7 - Handover Checklist: Detailed list of tasks for business handover

8. Schedule 8 - Required Consents: List of third-party consents required for completion

9. Appendix A - Franchisor Consent: Form of franchisor's consent to the transfer

10. Appendix B - Deed of Assignment: Form of deed for assigning the franchise agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Franchise Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Food and Beverage

Hospitality

Automotive

Health and Fitness

Education and Training

Professional Services

Home Services

Beauty and Personal Care

Real Estate

Technology Services

Construction and Maintenance

Relevant Teams

Legal

Operations

Compliance

Commercial

Finance

Business Development

Risk Management

Corporate Development

Franchise Relations

Contract Administration

Relevant Roles

Franchise Development Manager

Business Development Manager

Legal Counsel

Commercial Manager

Operations Manager

Franchise Operations Director

Chief Executive Officer

Chief Financial Officer

Compliance Officer

Business Transfer Specialist

Franchise Relations Manager

Contract Administrator

Risk Manager

Business Owner

Franchise Consultant

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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