Franchise Purchase Agreement Template

This Franchise Purchase Agreement (“Agreement”) is entered into as of [Effective Date], by and between:

Seller: [Seller Full Legal Name], a [State/Country] [Entity Type], with an address at [Address]

and

Buyer: [Buyer Full Legal Name], a [State/Country] [Entity Type], with an address at [Address]

Together, the parties are referred to as the “Parties.”

1. Franchise Business Information

Seller is the owner or authorized operator of the following franchise business:

Franchise Brand: [Franchise Brand Name]
Business Name: [Business Name]
Franchise Location Address: [Address]
Franchise Agreement Date: [Date]
Franchise Unit Number, if any: [Number]

The Parties intend that Buyer will purchase the franchise business and related rights and assets described in this Agreement, subject to any required third-party approvals.

2. Sale of Franchise Business

Subject to the terms of this Agreement, Seller agrees to sell, assign, transfer, and deliver to Buyer, and Buyer agrees to purchase from Seller, the franchise business interests and assets described in this Agreement.

This sale includes only the items expressly listed as included assets and does not include any excluded assets or liabilities unless specifically stated otherwise.

3. Included Assets

The assets included in the sale are as follows:

• the Seller’s transferable interest in the existing franchise business, to the extent assignable and approved;

• furniture, fixtures, equipment, and machinery located at the business;

• inventory on hand as of the closing date, if included;

• customer records, vendor lists, and operating materials, to the extent transferable and allowed by law or contract;

• goodwill associated with the business;

• telephone numbers, website assets, social media accounts, and marketing materials, if transferable;

• leasehold improvements, to the extent owned by Seller and transferable;

• licenses, permits, and approvals, to the extent transferable; and

• other included assets: [Describe]

4. Excluded Assets

The following items are excluded from the sale unless the Parties expressly state otherwise:

• cash on hand and bank account balances;

• tax refunds;

• Seller’s corporate books and internal governance records;

• assets unrelated to the franchise business;

• personal property not used in the business;

• claims or rights arising before closing unless assigned; and

• other excluded assets: [Describe]

5. Purchase Price and Payment Terms

The total purchase price for the sale is:

[Dollar Amount]

The purchase price will be paid as follows:

☐ Full payment at closing
☐ Deposit of [Dollar Amount] on [Date], with balance due at closing
☐ Installment payments as follows: [Describe schedule]
☐ Earnout or contingent payment as follows: [Describe]
☐ Seller financing as follows: [Describe promissory note or financing terms]

Any deposit paid under this Agreement shall be handled as follows:

[Refundable / non-refundable / applied to purchase price / escrow terms]

6. Assumed and Excluded Liabilities

Buyer will assume only the following liabilities, if any:

[Describe assumed contracts, obligations, or liabilities]

Buyer does not assume any other debts, claims, taxes, lawsuits, defaults, penalties, or obligations of Seller arising before closing unless expressly listed above.

Seller remains responsible for all liabilities not expressly assumed by Buyer.

7. Franchisor Approval and Transfer Conditions

The Parties understand that this transaction may require the consent or approval of the franchisor and may also require Buyer to satisfy franchise qualification, training, financial, and documentation requirements.

Closing is conditioned on the following, if applicable:

• written franchisor approval of the transfer;

• execution of a new franchise agreement, transfer agreement, or related franchisor documents by Buyer;

• payment of any transfer fee, as allocated below: [Describe];

• Buyer’s completion of required franchise training;

• landlord consent or lease assignment, if applicable; and

• any other required third-party approval: [Describe]

If a required approval is denied or not obtained by [Date], then:

☐ Either Party may terminate this Agreement
☐ Deposit will be handled as follows: [Describe]
☐ Other result: [Describe]

8. Seller Representations

Seller represents and warrants that, to the best of Seller’s knowledge, the following are true as of the date of this Agreement and will be true at closing except as disclosed in writing:

• Seller has authority to enter into this Agreement;

• Seller owns or controls the included assets being sold;

• Seller has not knowingly transferred or pledged the included assets except as disclosed;

• the franchise business is being operated under the agreements identified by Seller;

• Seller has disclosed any known material defaults, claims, or notices relating to the franchise business;

• the information provided to Buyer about the business is materially accurate to the extent stated by Seller; and

• no consent is required other than those disclosed in this Agreement or separately in writing.

Exceptions or disclosures:

[Insert disclosures or write “None”]

9. Buyer Representations

Buyer represents and warrants that:

• Buyer has authority to enter into this Agreement;

• Buyer has or will have sufficient funds or financing to complete the purchase, subject to stated conditions;

• Buyer will cooperate in good faith with any franchisor transfer process;

• Buyer understands that ongoing operation of the franchise may be subject to new agreements, manuals, system standards, and franchisor requirements; and

• Buyer has had the opportunity to review the business and ask questions before signing.

10. Inspection and Due Diligence

Before closing, Buyer may review records, assets, and business information reasonably related to the transaction, including:

• equipment and inventory;

• sales and operating records;

• lease documents;

• franchise-related correspondence;

• vendor contracts; and

• other relevant business materials.

Buyer acknowledges that the purchase decision is based on Buyer’s own review, except for specific representations expressly made in this Agreement.

11. Closing

The closing of this transaction will take place on [Closing Date] at [Location or “remotely by exchange of documents”], unless the Parties agree otherwise in writing.

At closing, Seller shall deliver:

• a bill of sale or assignment for included assets;

• transfer documents reasonably required under the franchise system;

• keys, passwords, and operational materials;

• possession of the business assets, as applicable;

• evidence of required third-party consents, if obtained; and

• any other agreed closing documents: [Describe]

At closing, Buyer shall deliver:

• the purchase price as required under this Agreement;

• signed transfer documents and other closing documents;

• proof of any required insurance or approvals, if applicable; and

• any other agreed deliverables: [Describe]

12. Transition Assistance

For a period of [Number] days after closing, Seller will provide the following transition assistance, if any:

[Describe training, introductions, operational assistance, or handoff duties]

Unless expressly stated here, Seller is not required to provide continuing services after the transition period.

13. Employees and Operations

The Parties acknowledge that Buyer may choose whether to offer employment to existing employees, subject to law and franchise system requirements.

Responsibility for wages, benefits, payroll taxes, and employment obligations before closing remains with Seller unless otherwise stated here:

[Describe any special arrangement]

14. Confidentiality

Before and after closing, each Party shall keep confidential any non-public business, financial, operational, or franchise-related information received from the other Party, except as needed for the transaction, required approvals, professional advice, financing, or as required by law.

This section does not prevent disclosure to the franchisor, landlord, lender, accountant, attorney, or other approved reviewer involved in the transaction.

15. Non-Competition and Non-Solicitation

The Parties agree to the following post-closing restrictions, if any:

☐ No non-compete applies
☐ Seller agrees not to compete as follows: [Describe time, area, and activity limits]
☐ Seller agrees not to solicit employees, customers, or vendors as follows: [Describe]
☐ Other restriction: [Describe]

16. Indemnification

Seller shall indemnify and hold Buyer harmless from losses, claims, damages, and liabilities arising from Seller’s breach of this Agreement or from liabilities not assumed by Buyer.

Buyer shall indemnify and hold Seller harmless from losses, claims, damages, and liabilities arising from Buyer’s breach of this Agreement or from liabilities assumed by Buyer.

Any claim procedure, notice requirement, or defense control terms are as follows:

[Describe]

17. Default and Remedies

If either Party materially breaches this Agreement before closing and does not cure the breach within [Number] days after written notice, the non-breaching Party may terminate this Agreement and pursue any remedies allowed by law or this Agreement.

Additional remedy terms, including treatment of deposit or escrowed funds:

[Describe]

18. Governing Law

This Agreement shall be governed by the laws of [State/Country], without regard to conflict of laws principles, except to the extent mandatory franchise, commercial, or employment law applies.

19. Entire Agreement

This Agreement contains the complete understanding of the Parties regarding the purchase and sale of the franchise business described above and supersedes prior oral and written discussions on that subject.

Any amendment to this Agreement must be in writing and signed by both Parties.

20. Signatures

The Parties have signed this Franchise Purchase Agreement as of the Effective Date.

Seller:

Signature: __________________________
Name: [Full Name]
Title: [Title]
Company: [Seller Legal Name]
Date: [Date]

Buyer:

Signature: __________________________
Name: [Full Name]
Title: [Title]
Company: [Buyer Legal Name]
Date: [Date]

Optional Acknowledgment by Franchisor, if required:

Signature: __________________________
Name: [Full Name]
Title: [Title]
Company: [Franchisor Name]
Date: [Date]