Legal due diligence is an integral part of selling a business and will assist in ensuring that any prospective transactions are not unnecessarily impeded. By taking the time to correctly prepare for the sale of a pharmacy business, a vendor can help to prevent any unexpected obstacles from delaying or preventing a sale.
Some crucial matters which may need to be considered before agreeing to sell a pharmacy business to a potential purchaser include:
- Is there a franchisor? If so:
- Does the franchisor have a right of first refusal?
- What are the franchisor’s requirements to terminate or assign the franchise agreement?
- Is there a lease for the premises? If so, does it need to be renewed?
- Are there any security interest registered over the business? If so, what is required to release these security interests?
- Are there equipment leases relating to the business? If so, are they able to be transferred to a purchaser?
- Is there a service entity associated with the business? If so, are there compliant service agreements?
- Has the necessary documentation been collated for the sale? This may include:
- Copies of any relevant leases;
- A list of equipment;
- A list of current employees;
- A copy of the franchise agreement (where applicable); and
- Relevant title searches.
Engaging a pharmacy lawyer early in the process of selling a pharmacy will ensure that there are no hidden surprises which may compromise the transaction.
Important Disclaimer: The content of this article is general in nature and for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.