Negotiating Restaurant Purchase and Sale Transactions: Key Legal Issues for Buyers and Sellers

Purchasing a restaurant, bar or similar property is fraught with legal issues well beyond real estate matters. Working knowledge of the concerns, standards and customs for addressing those matters is critical to a successful transaction.

The buyer and seller must try to ensure that the purchase and sale agreement provides a sufficient roadmap through the acquisition and disposition process that considers all stakeholders and meets the parties' reasonable expectations.

Considerations include different structures of restaurant purchase and sale transactions, due diligence, lease assignment issues, alternatives for security for the deferred portion of the purchase price, and closing contingencies. Counsel must also contemplate the buyer's ability to secure required licenses and permits (including a liquor license), issues related to the representatives of the buyer and seller, transferee liability or certain obligations and how to protect against liability, and closing issues.

Listen as our authoritative panel discusses unique issues involved in the purchase or sale of a restaurant and practical considerations.

1. Nature of the transaction
2. Pre-contract due diligence
3. Adjustments to price and security for deferred payments
4. Contingencies to closing including liquor license contingency
5. Representations of buyer and seller
6. Indemnifications
7. Preparation for and closing

The panel will review these and other key issues:

• Why are seller representations and warranties so critical in the purchase of a restaurant?
• What are the different ways to structure a restaurant purchase and sale transaction?
• What are best practices for drafting representations and warranties that protect both buyer and seller?
• What are the best ways to handle the buyer's ability to secure required licenses and permits (including a liquor license)?
• What are the unique issues involved in the purchase of a restaurant property to include in the closing contingencies of the purchase and sale agreement?