If you’re selling a hospitality business, having a properly drafted Sale of Business Contract is vital to ensure the transaction doesn’t leave you with a sour taste in your mouth (literally).

Most states in Australia have a prescribed contract for Sale of Business Agreements. That being said, including certain special conditions and annexures will ensure that the agreement goes smoothly, much like a glass of red goes down after a long day of work.

Legal Considerations when selling a hospitality business

Here are just several key issues to consider when you’re selling a hospitality based business, and which you should consult with your business sale lawyer on:

Transfer of lease

Usually, a hospitality business will operate from leased premises, which will need to be transferred concurrently with the sale. Alternatively, the lessor may wish to issue a new lease. A business sale lawyer will be able to examine the documents to determine the mechanism for transfer and the best way to proceed.

Liquor license

If there is a liquor license in place, there is probably a prescribed mechanism for transfer of same or the grant of a new license, which needs to be considered before final terms are agreed. Usually, contracts for sale of a business that involve the use of a liquor license will have the grant or transfer approval of that license as a pre-condition to settlement.


When employees are transferred, it often indicates there will be an adjustment at settlement, taking into account any outstanding entitlements. Before this, however, it is important to consider how employees will be notified, and whether or not the purchaser will choose to employ any staff at all. Address this issue in the terms of the Sale of Business Agreement.


Stocktake often happens right before settlement, usually meaning a slight adjustment to the settlement figure. The finer details of stocktake need to be fleshed out in the Sale of Business Agreement. In particular, there may need to be provision for a deduction for the value of the stock, which is not of merchantable quality.

Ongoing contracts

More often than not, these businesses already have existing contracts, some with suppliers and others with third parties. The Sale of Business Agreement should include the method of transferring or assigning any contracts, as should an onus on the vendor to introduce and facilitate a relationship between the purchaser and those third parties.


When you negotiate the terms of selling a hospitality business, it’s important to seek legal advice from a business lawyer. There can be serious implications if you don’t get proper legal advice, including after the sale has been finalised.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Emma Jervis
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy