ANNOUNCER: I’m with Faisal Nasim from Cohen Highley Lawyers. Tell me about the sale and purchase of a franchise business.
FAISAL: Clients often don’t realize when buying or selling a franchise business that there are time sensitive moving parts to it. From drafting a negotiating franchise agreement to deep diving into complex and comprehensive disclosure franchisor documents including legal, commercial, operational and financial aspects of the franchise business as per Ontario’s disclosure laws.
ANNOUNCER: What types of things should be dealt with?
FAISAL: Whether we’re dealing with a single unit franchise or multiple, the franchisee would want due diligence in searches in the business, its assets and the legal entities involved. Often franchisees will do reference checks on the franchisor regarding its ongoing relationship and workflow with other existing franchisees.
ANNOUNCER: Next?
FAISAL: There may be other transactional requirements from procuring third party consents, preparing commercial lease and transfer, or perhaps the franchisees raising financing to fund this venture. All of this needs to dovetail into the closing timeline.
