Company & Commercial

Re-selling a franchise: things to know

Franchising is becoming ever more popular as a business model in the UK.

17 Jul 2023

Team name
James Bowles

James Bowles

Many entrepreneurs prefer the security of buying into an established franchise over starting their own business. There are other benefits other than security, purchasing a franchise means that you have established brand recognition and proven business systems and can allow the franchisee to purchase a business that is already operating profitably. There is also the benefit of acquiring an existing customer base, employees and suppliers.

Type of sale

Asset sale

In an asset sale the seller, the buyer and the franchisor will agree on what assets and liabilities are going to transfer. This allows the buyer to choose what parts of the business they want.

Share sale

In a share sale, the shares in the company are transferred. On a share sale, all aspects of the business will transfer.

Documents to be signed

The two main transaction documents are the franchise agreement and the sale and purchase agreement.

The franchise agreement is the document, which outlines the deal between the franchisor and franchisee.  Generally, the franchisor is not willing to negotiate on the terms of the franchise agreement and so a franchisee should get legal advice on the agreement at an early stage to make sure that they are aware of what they will be signing up to before investing too much in the transaction.

The sale and purchase agreement is the main agreement that sets out the terms of the asset or share sale, this is both the seller and the buyer’s opportunity to fine tune the terms of the agreement and both parties will need to get legal advice in order to minimise the risk of any post completion disputes or losses.

The franchisor will also be involved in the negotiation of the purchase agreement and this can sometimes complicate the process.


M&P Commentary

James Bowles a solicitor in the corporate and commercial department says:

“Because franchise resales can be more complicated than a typical sale of an independent business, it is therefore important to plan ahead and start the process early whether you are buying or selling. You should instruct both a solicitor and an accountant experienced with franchise sales and purchases.

If you are considering entering into a franchise sale or purchase Mullis & Peake will be happy to assist. For further advice and assistance please contact our Commercial Team.”


Ranked highly in Romford and Brentwood for solicitor firms

The service I received from Allison was exceptional. Always highly professional and informative.
Mullis and Peake are very efficient, professional and friendly company to deal with. Excellent service throughout.
Excellent, swift service from Esther at Mullis & Peake. Showed clear expertise in her field & walked me through everything patiently & thoroughly.
Company and Commercial
I found the service provided was excellent from start to finish, with our requirements met in a timely manner throughout.
Staff very helpful and friendly. Trudi was easy to talk to and to understand the procedure.
Dispute resolution
We contacted Martyn to deal with a sensitive Will dispute and we can’t thank him enough for his commitment and hard work.
Residential Property
Very prompt. Experienced. Expert. Friendly.
Commercial Property
Excellent service and far quicker than previous negotiations using a different solicitor.
At all times I was kept informed about the progress of the case and everything was completed in a timely fashion.
Personal Injury
Martyn undertook and guided me through the lengthy process [of a personal injury case], and after much work, achieved a successful result.

Related News insights

Contested Wills and Financial Provision, Legal, Contested wills and financial provision
Who is able to bring a contested probate claim?
Contested Wills and Financial Provision, Legal
Organise your affairs to avoid disappointed beneficiaries as life expectancy increases
Movers & Shakers, Mullis & Peake, Business
Congratulations and Promotions – November 23
Legal, Residential Property, Residential Property
Four things to be aware of before buying a property at auction