Buying an Existing Franchise in Ireland: Resale Checks

Buying an existing franchise in Ireland can offer premises, customers and an operating team from day one. However, buying the business does not automatically give you the right to operate under its brand. A resale involves both the seller and the franchisor, and the deal must work with each. These checks focus on acquiring an existing outlet rather than opening a new one.

1. Establish exactly what you are buying

Ask whether the proposed transaction is an asset purchase or a purchase of shares in the company operating the franchise. That distinction affects what changes hands and the liabilities you may face.

With an asset purchase, the sale agreement should identify the assets and obligations included. With a share purchase, the company remains in place with its existing liabilities, including those that may not be immediately apparent. Neither structure removes the need for legal, financial and tax advice.

Request a written schedule covering:

• Equipment, stock and any leased or financed items.
• Premises rights and any landlord consent needed.
• Customer contracts, outstanding orders and prepaid services.
• Employees and accrued employment obligations.
• Telephone numbers, digital accounts and business records.
• The franchise rights being transferred or replaced.

Do not assume that everything used by the outlet belongs to the seller. Equipment may be hired, while software accounts or customer platforms may be controlled by the franchisor. Ask your solicitor whether employee transfer rules apply and what information or consultation is required.

2. Make franchisor approval a completion condition

The seller's willingness to sell is not enough. Franchise agreements commonly restrict transfers, and the franchisor may need to approve your finances, experience and ability to operate the business.

Ask for the transfer provisions early. They may require outstanding fees to be cleared, compliance failures to be resolved, information about you to be supplied and an application fee to be paid. A right of first refusal may allow the franchisor to buy on the proposed terms before your purchase can proceed.

Obtain written answers to three questions:

• Will you take an assignment of the existing agreement or sign a new agreement?
• What conditions must you and the seller satisfy before approval becomes effective?
• How long does the franchisor have to make its decision?

An assigned agreement may give you only the remaining term, not a fresh full term. A new agreement may introduce different obligations from those on which the seller's results were achieved.

Have your solicitor make completion conditional on the necessary approval and franchise documents becoming effective. Avoid a structure in which you must buy the outlet even if permission to use the brand is refused.

3. Test the asking price against the rights available

An established outlet's asking price may include goodwill: the value attributed to its customers, reputation and trading position. Assess that value against what you will actually receive, rather than assuming the seller's operating history guarantees future earnings.

Ask your accountant to reconcile management accounts with supporting records, such as statutory accounts where available, sales reports, bank receipts and tax records. Investigate inconsistencies before agreeing a valuation.

Separate recurring earnings from one-off benefits. The seller might have enjoyed a temporary fee concession, unusually low staffing costs or arrangements that will not transfer to you. Include a realistic cost for replacing the seller's own work.

Prepare a separate acquisition-cost schedule covering the purchase price, stock valuation, professional fees, applicable taxes, transfer charges and any immediate work required for approval. Establish who pays each charge and whether VAT applies.

The remaining contractual term matters to valuation. Do not pay for many years of expected benefit without understanding how long your right to trade is secured.

4. Check Irish law and document the handover

The Republic of Ireland has no dedicated franchise legislation, statutory franchise-specific disclosure regime or general requirement to register franchise agreements. General contract law governs much of the arrangement, alongside applicable Irish and EU competition law, intellectual property law and relevant employment, tax and data protection requirements.

The Irish Franchise Association's Code of Ethical Conduct applies to its members; it is not legislation. Do not assume that consumer cancellation rights protect this business purchase or that the seller must provide a prescribed franchise disclosure document.

Ask your solicitor to coordinate the sale agreement, franchisor consent and franchise agreement. Seek appropriate contractual protection for the seller's statements about ownership, liabilities and trading information. Agree how stock, customer prepayments and outstanding orders will be counted and allocated at completion.

Finally, prepare a handover checklist covering access credentials, keys, records, supplier accounts and responsibility for customers awaiting service. Customer data must be handled lawfully, not simply copied because the purchase price has been paid.

Practical takeaway: Buy only when the assets, liabilities, franchisor approval and operating rights fit together. An established outlet is valuable only if you can lawfully take it over on terms that support the price.