Plant City, FL asked in Business Law and Contracts for Florida

Q: I own a small business that I’d like to sell. I’m considering owner financing. Can an agreement include repossession?

I want to be sure I’m protected if the buyer defaults, or fails to maintain the business. The business is a franchised restaurant so there standards that need to be maintained. If the agreement includes a down payment, would I retain it as well?

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1 Lawyer Answer
Derek Allen Colvin
Derek Allen Colvin
Answered

A: There is always some level of risk involved in every business transaction. Providing owner financing and the nature of the franchise relationship will need to be taken into account. You can't eliminate risk, but you can manage risk by contemplating these issues in an asset purchase agreement, along with a promissory note and security agreement. Repossession of the franchise business itself may not be an available remedy, as your franchise agreement is likely to be terminated as part of the transaction through a transfer to the Buyer. You may need to speak to an attorney with speciality in M&A and franchise law.

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