Our client is selling his business and the sale price $841,000, what disclosure statement (if any would we require?)
We note that the s.52 Statement is only required where the business sale is less than $450,000 or less, as this is a franchise would I require one, or is the franchise a separate transaction to the sale.?
Thank you for the question.
If the sale is of a business which falls outside the statutory definition of ‘small business’, the s 52 statement under the Estate Agents Act 1980 is not necessary.
The Franchising Code of Conduct requires franchisors to disclose certain information and provide specific documents to a person who proposes to become a franchisee, or to renew or extend a franchise agreement, including an information statement and a disclosure document as defined in Part 2, Division 2, clause 8. The obligation to provide disclosure exists between a franchisor and its prospective or existing franchisees. The franchisor will need to be notified of the sale and put in touch with the purchaser to allow compliance.
For further information see the By Lawyers Sale of Business and Franchise (VIC) publication.
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