Cafe purchase agreement

About this document

This is a simpler version of our restaurant sale agreement, suitable for smaller businesses that have simpler menus and smaller kitchens. We would typically describe these as cafés, coffee shops and sandwich bars rather than restaurants.

A business for which this sale agreement might be used is more likely to serve light food that is prepared or assembled rather than cooked from scratch to order (for example, sandwiches, cakes, pre-made sushi or salads). There is unlikely to be a licence to sell alcohol on-premises.

Specifically, the agreement deals with:

• business premises: we assume that the property is leased to the business owner, not owned by them. This sale agreement includes provisions for the transfer of rented premises by to the new owner. If the premises are owned, we suggest using our restaurant sale agreement instead.

• arrangements for the transfer of staff employed in the running of the business.

• sale of stock that may be food and drink, food preparation equipment, tableware, tables and seating.

The purchase price may be apportioned among the assets to assist in tax planning.

Use throughout the sale process

You can use this template agreement throughout the sale process: initially during negotiations to remind you what may be important to you; then as the basis of a heads of terms document that sets out the key terms; and then in full as a final sale and purchase agreement.

It is usual for the buyer to produce the sale document because that allows them to set their terms that the seller must accept. However, if the seller wants to set the initial negotiating position, they might suggest that they write the contract.

For the sale of business assets, not shares

This type of sale agreement is also known as an asset puchase agreement. That is because what is being sold are the assets of the business. If the business operates through a limited company, you might consider instead selling or buying the shares of the company. For a company sale, see our sale agreements for companies section.

Warranties

Warranties are statements as to the condition of the subject matter where the condition cannot be ascertained easily by the buyer otherwise. For example, you might have a warranty that there is currently no litigation threatened against the business.

Warranties are an important tool within a business sale because if the seller can be shown to have given a warranty that later is shown to be untrue, then they have broken the contract and the buyer can seek damages to put right what is wrong.

This template includes warranties relevant to the sale of a small food retail business from which you can choose which you want the seller to give. If you are the seller, you might use these to help inform what the buyer might require and choose whether you are willing to give them (or draw attention to them).

Contents

As with all Net Lawman documents, at the end of the café purchase and sale agreement template we provide extensive notes, in plain English, that guide you as to how to edit it.

The contract contains the following sections:

• Interpretation
• Agreement for sale
• Purchase price
• Completion
• Stocks
• Debtors
• Creditors and liabilities
• Value Added Tax
• Warranties by the seller
• Future activities
• Guarantor
• Communications
• Miscellaneous matters
• Jurisdiction

Warranties cover

• Assets
• Stocks
• Accounts
• Employees
• Suppliers and customers
• Licences, consents and passwords
• Insurance
• Statutory restrictions
• Litigation
• Seller’s activities
• Contracts
• Properties
• Leasehold properties
• Intellectual property
• Internet domain names