Restaurant Asset Purchase Agreement for Canada

Restaurant Asset Purchase Agreement Template for Canada

A comprehensive legal agreement governed by Canadian law that facilitates the transfer of restaurant business assets from a seller to a buyer. This document outlines the terms and conditions for the purchase and sale of restaurant-specific assets, including equipment, inventory, licenses, permits, intellectual property, and goodwill. It addresses unique considerations in the Canadian restaurant industry such as health permits, liquor licensing requirements, and compliance with provincial and federal regulations while protecting both parties' interests throughout the transaction process.

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What is a Restaurant Asset Purchase Agreement?

The Restaurant Asset Purchase Agreement is a specialized legal document used in Canadian business transactions when one party intends to acquire the assets of an existing restaurant business from another party. This agreement is essential for structuring the transfer of both tangible and intangible assets specific to restaurant operations, including kitchen equipment, furniture, fixtures, inventory, recipes, customer lists, and applicable licenses and permits. It's particularly important in Canadian jurisdictions where specific provincial and federal regulations govern food service establishments, liquor licensing, and health standards. The document addresses critical aspects such as asset valuation, liability transfer, employee matters, and compliance with local health and safety regulations. This agreement type is commonly used in situations ranging from single restaurant acquisitions to larger hospitality group transactions, ensuring all parties understand their rights, obligations, and the specific assets included in the sale.

What sections should be included in a Restaurant Asset Purchase Agreement?

1. Parties: Identification of the seller and purchaser, including their legal business names and addresses

2. Background: Context of the transaction, including brief description of the restaurant business and purpose of the agreement

3. Definitions: Key terms used throughout the agreement, including specific restaurant industry terminology

4. Purchase and Sale of Assets: Detailed description of assets being purchased, including equipment, inventory, fixtures, and intellectual property

5. Purchase Price and Payment Terms: Total consideration, payment structure, and adjustments for inventory

6. Closing: Closing date, conditions, and deliverables

7. Representations and Warranties of Seller: Seller's assertions regarding the business, including permits, licenses, compliance with health regulations

8. Representations and Warranties of Purchaser: Purchaser's assertions regarding authority and ability to complete the transaction

9. Covenants: Pre-closing and post-closing obligations of both parties

10. Employee Matters: Treatment of existing employees and related liabilities

11. Permits and Licenses: Transfer or reapplication of necessary permits and licenses

12. Indemnification: Mutual protection against losses and liabilities

13. Termination: Circumstances under which the agreement can be terminated

14. General Provisions: Standard clauses including governing law, notices, and amendments

What sections are optional to include in a Restaurant Asset Purchase Agreement?

1. Non-Competition: Restrictions on seller's future restaurant operations - include when seller could potentially compete

2. Transition Services: Seller's assistance in transitioning the business - include when complex operations require extended handover

3. Bulk Sales Compliance: Specific provisions for jurisdictions with active bulk sales legislation

4. Third Party Consents: Process for obtaining required third-party approvals - include when key contracts require consent for assignment

5. Environmental Matters: Environmental representations and obligations - include when property is included or environmental concerns exist

6. Franchise Matters: Provisions related to franchise agreements - include if restaurant is franchised

7. Real Property Lease Assignment: Terms for assigning the lease - include when leased premises are involved

What schedules should be included in a Restaurant Asset Purchase Agreement?

1. Schedule A - Purchased Assets: Detailed inventory of all assets being purchased, including equipment, furnishings, and smallwares

2. Schedule B - Excluded Assets: List of assets specifically excluded from the sale

3. Schedule C - Purchase Price Allocation: Breakdown of purchase price across asset categories for tax purposes

4. Schedule D - Permits and Licenses: List of all required permits and licenses for operation

5. Schedule E - Assumed Contracts: List of contracts being assumed by the purchaser

6. Schedule F - Intellectual Property: Details of trademarks, trade names, recipes, and other IP being transferred

7. Schedule G - Employee Information: List of employees and their key employment terms

8. Schedule H - Form of Bill of Sale: Form document for transferring title to personal property

9. Schedule I - Inventory: Detailed list of food, beverage, and supply inventory

10. Schedule J - Supplier Agreements: List of key supplier relationships and contracts

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

Canada

Publisher

Genie AI

Cost

Free to use
Clauses
Relevant Industries

Food & Beverage

Hospitality

Restaurant Industry

Food Service

Commercial Real Estate

Business Services

Legal Services

Retail

Franchise Operations

Hospitality Equipment

Relevant Teams

Legal

Finance

Operations

Mergers & Acquisitions

Business Development

Compliance

Real Estate

Risk Management

Food Safety & Quality Assurance

Strategic Planning

Relevant Roles

Restaurant Owner

Business Development Manager

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Restaurant Manager

Operations Director

Franchise Development Manager

Mergers & Acquisitions Manager

Business Broker

Commercial Real Estate Agent

Restaurant Consultant

Legal Counsel

Compliance Officer

Financial Controller

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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