Bar and Pub Business Sale Agreement

What a good one includes

• A detailed inventory valuation clause that specifies how stock-in-trade, including open and sealed liquor bottles, will be counted and priced on the eve of the transfer.
• A clear contingency clause stating that the sale is dependent on the local municipality's approval of the liquor license transfer or issuance of a new license to the buyer.
• An explicit allocation of the purchase price among assets, goodwill, non-compete agreements, and equipment to ensure clear tax reporting for both parties.
• A lease assignment provision requiring landlord consent for the transfer of the physical premises, along with any negotiated rent terms or lease extensions.
• A transition and training clause outlining the exact number of hours the seller will spend helping the buyer learn the operations, meet regular distributors, and manage staff.
• Comprehensive representations and warranties guaranteeing that all commercial kitchen equipment, draft lines, and refrigeration systems are in working order at the time of sale.
• A non-compete covenant restricting the seller from opening a competing bar or pub within a specified geographic radius for a set number of years.

Common mistakes to avoid

• Failing to account for the exact value of alcohol inventory on the night before closing, which often leads to last-minute financial disputes over expensive back-bar spirits.
• Neglecting to make the sale strictly contingent on the successful transfer of the liquor license, leaving the buyer with a commercial lease but no legal way to sell alcohol.
• Overlooking outstanding health department violations or fire code issues, which then become the expensive responsibility of the unsuspecting buyer after the sale is finalized.
• Forgetting to secure written landlord approval for the lease assignment before signing the final sales agreement, risking immediate eviction or lease termination.

Frequently asked questions