How can I sell my ABA therapy business and transfer the lease?
Dolan Williams
LawyerSo here is what I recommend: You should definitely identify which party is entitled to the existing accounts receivable. For example if the seller keeps them, the purchase price typically goes up, but if the buyer takes them, that value is factored into the deal. For the leased space, you’ll need to review the current lease terms to determine if it allows assignment or subletting, then coordinate landlord approval to assign the lease to the buyer and remove yourself completely. Usually, assignment is allowed in most leases. You get a 10% discount on document review as a legal chat customer. So in your case it'd be $[AMOUNT] for a review (10% off $[AMOUNT]) for my review.
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Hello sir! What is it if an answer you? I’ll be back on tomorrow.
Hello Dolan, I have a quick question.
I like to add the below section in our offer letter. is it ok? [COMPANY NAME] (“Company”) has determined that Employee’s leadership and expertise are essential to the Company’s ongoing operations and the Company’s ability to continue to execute its growth strategy. There will be significant investment on the employee’s growth after accepting the offer and will continue after starting the job. Moreover, the quality of patient care will be dependent on this key position. This offer may be revoked at any time for any reason at all. Even after employment is engaged, we adhere to the state's at-will employment rules that allow termination. As there will be significant company-wide planning and investment on the employee after accepting the offer, I am committed to join the Company on the agreeable joining date. In the event of any voluntary change from the employee, the Company will have the legal right to reclaim and recoup the investment. In the event of any voluntary separation after joining, I agree to provide the Company with at least 60 days’ advance written notice of any termination by the Employee of their employment relationship with the Company in addition to other clauses in this offer letter. This advance notice is important to maintain the quality of patient care. Signed this _____________ day of ________________, 20_____.
Hello there1 Ok thanks! So I'm only a little concerned about terms like “recoup the investment” just because it's a little vague and may not be enforceable without a clearly defined repayment agreement. The 60-day notice is fine, but try to stay flexible le with that as a practical matter. So try this on: Training and Onboarding Investment Repayment The Company will invest in the Employee’s onboarding, training, and professional development, which may include the cost of certifications, travel, training sessions, materials, and other related expenses. If the Employee voluntarily resigns or otherwise terminates employment within twelve (12) months of their start date, the Employee agrees to reimburse the Company for a portion of these documented expenses according to the following schedule: 100% reimbursement if employment ends within the first three (3) months 50% reimbursement if employment ends after three (3) months but before six (6) months 25% reimbursement if employment ends after six (6) months but before twelve (12) months No reimbursement will be required if employment ends after twelve (12) months The Company will provide an itemized list of reimbursable costs, and any required repayment shall be made within thirty (30) days of the termination date. By signing this offer letter, the Employee acknowledges and agrees to this reimbursement obligation. Thanks!
ok, thanks
Dolan, I am planning to sell the business. This is a ABA therapy clinic which gives therapy to kids with autism. It is a center-based clinic with 5900 sqft of leased space. 90% of our sale revenue comes from the insurance, which takes 2-3 months to recive. We have a large amount of accounts receivable. In selling, I am concerned about two items (1) sale agreement contract as who is keeping what - it impact the asking price (2) how to transfer the existing space lease to new owner and taking out myself 100%. I need you advice.
Hello there! So here is what I recommend: You should definitely identify which party is entitled to the existing accounts receivable. For example if the seller keeps them, the purchase price typically goes up, but if the buyer takes them, that value is factored into the deal. For the leased space, you’ll need to review the current lease terms to determine if it allows assignment or subletting, then coordinate landlord approval to assign the lease to the buyer and remove yourself completely. Usually, assignment is allowed in most leases. You get a 10% discount on document review as a legal chat customer. So in your case it'd be $[AMOUNT] for a review (10% off $[AMOUNT]) for my review.
Yes, I have the reassignment option, but need to understand little more. I will need the legal service to help me on review and modify (as needed) sale contract and review any other documents (i.e., lease agreement) as needed. I will appreciate to have a "reasonable" flat price. I like to work with you and do not want to submit this as bid.
That’s great to hear, and I’d be happy to help. Since you already have reassignment rights in your lease, I can review both the lease and the sale contract to make sure your interests are protected and you’re fully released from future liability. I can offer a reasonable flat fee for the full review, redlines, and guidance and let’s go over the documents. How many pages is the sale contract?
assignment of lease
I do not have the sale contract, just started the talk with potential buyer. I have shared the info sheet with all information they requested with all financial report as of 5/2. I am getting ready as I want to move fast to close the deal if they offer. QQ: I have $[AMOUNT] as account receivable (at least 80% will be collected), $[AMOUNT] as lease security deposit and $[AMOUNT] in checking account. It is already $[AMOUNT] here. How much should be my bottom line? I asked for $[AMOUNT].
Understood! Ok so the assignment section just says you can't transfer or give away any part of your lease or lease rights without getting your landlord’s written approval first. This includes assigning, transferring, mortgaging, subleasing, licensing, or letting someone else use the space, even partially. The landlord MUST act reasonably when deciding whether to approve or deny your request. If you do get approval and someone pays you rent for using the space, you must give 50% of that rent (above what you're already paying the landlord) to the landlord. If the new person pays you a lump sum or other compensation for taking over the lease, you owe the landlord 50% of that too. In section 11, 2, it says you are allowed to sublease up to 1,000 square feet, but only to vendors who are supporting your business and only for the approved use of the space. You still need written consent from the landlord, but again, the landlord can’t unreasonably say no. Whoever you sublease to must agree to follow all the lease rules. You’re still fully responsible if they don’t. Section 11.3 basically says that you want to assign or sublet, you have to notify the landlord in writing at least 30 days in advance. The notice must include full details: who the new person is, what space they’ll take over, the terms of the deal, and when it starts. This notice triggers the landlord’s review process. I assume this is calendar days.
Yes, I saw that. Do you see any problem for getting myself our complete if the landlord agrees to reassign the lease?
Yes, I saw that. Do you see any problem for getting myself out completely if the landlord agrees to reassign the lease?
If the landlord agrees to the reassignment and signs off in writing, then legally you should be able to transfer all your rights and obligations under the lease to the new tenant. However, to be fully released, the landlord must expressly state that you’re no longer liable. Otherwise, you could remain on the hook if the new tenant defaults. It’s important that the reassignment agreement clearly says you’re released from all future responsibilities.
QQ: I do not have the sale contract, just started the talk with potential buyer. I have shared the info sheet with all information they requested with all financial report as of 5/2. I am getting ready as I want to move fast to close the deal if they offer. QQ: I have $[AMOUNT] as account receivable (at least 80% will be collected), $[AMOUNT] as lease security deposit and $[AMOUNT] in checking account. It is already $[AMOUNT] here. How much should be my bottom line? I asked for $[AMOUNT].
Got it. Your bottom line should ideally be at least the total value of your liquid and transferable assets, which is around \$[AMOUNT], plus a fair amount for the business goodwill, systems in place, and potential future earnings. Since you're asking \$[AMOUNT], that likely includes both tangible and intangible value, so your bottom line might reasonably fall between \$[AMOUNT] and \$[AMOUNT] depending on how much you’re willing to negotiate. Ultimately, it comes down to what you’re willing to accept to walk away cleanly and how strong the buyer’s offer is.
I have a meeting with landlord tomorrow. So the ask is: I like to sale the business aka reassign the lease to new owner with same term and rental agreement and move the full responsibility to them. I will like it in writing (amendment?) from landlord. Is it right assumption?
For sure and yes, those are correct assumptions you're making here!
I have an interested buyer, who is another franchisee and want my territory. We already had preliminary discussion and after signing NDA, I sent all the information to them. They told, they may want LOI (letter of intent), but do we really need that as they knows the system and I shared all information. Shouldn't they proceed with sale contract directly if we agree on price?
Hello there! I tend to strongly encourage LOIs. The main reason is that it sets the intent of the parties, makes it easier to draft the final contract, shows good faith to each other, but it is non-binding and doesn't mean that the deal is done yet. It's basically clarifying the understanding between the parties in my experience.
True, but isn't "not having the deal done" a problem? Isn't that make the process lengthier?
Btw, I have a concern about the franchise transfer fee for the LL sale? It has two numbers, which one is legally correct number?
Ok, got it. The correct transfer fee depends on how much of the business you're selling: If you're transferring part of your Franchise Business (defined as less than 49% of stock or membership units), the transfer fee is $[AMOUNT]. If you're transferring your entire Franchise Business (defined as 49% or more), then the flat transfer fee is $[AMOUNT]. So, if you're selling your whole territory (which likely means a transfer of the full business), the legally correct number would be $[AMOUNT]. Also note, if the buyer was already in the franchisor’s lead database before you contacted them, the franchisor may tack on a resale assistance fee and potentially a broker fee, in addition to that flat fee.
Hello Dolan. We have an employee who signed the offer letter last month (attached). We want to rescind the offer letter now. Do you see any problem? The last page has this line (This offer may be revoked at any time for any reason at all by the employer. Even after employment is engaged, we adhere to the state's at-will employment rules that allow termination.)
If yes, what is the best way to email it legally?
Hello [NAME]! You're fine! The letter includes a provision stating, “This offer may be revoked at any time for any reason at all by the employer.” This is consistent with what the law says regarding revoking offers in this case. The offer was made contingent upon a background check and drug test, too, so you could even use those as a reason. So legally, you're fine, but to avoid any claim of discrimination or retaliation, make sure you explain why. You could even say it's for financial reasons.
Hello Dolan: I hope you are doing great. As I told you earlier that I am trying to sell the business. The backstory is one of the franchisee from our adjacent territory showed strong interest. They get in a call with us and request for bunch of information after signing NDA (attached was my response). I also gave my asking price as $[AMOUNT]. After that they took a week and then came to a call and offered us $[AMOUNT]. At that point, we lowered our price to $[AMOUNT] and I offered them some seller financing for $[AMOUNT] (for 0% interest). Last week, they send a letter of intent with offer of $[AMOUNT] (attached). I will let you take a look at this two docs, before I ask for your input for my next step.
Info sheet
Thanks so much is there anything in particular that concerns you about this?
How can we make a counter offer for this LOI? Few points to consider: 1. I do not want to sell in loss from my cash investment though I am not charging anything for our efforts to build the business so far. 2. I can offer some seller financing to help the buyer, but with 0% interest rate and with shorter term (~12-15 months) 3. The down payment should be up with minimum $[AMOUNT]. 4. The LOI period should be limited (2 weeks??) and also training period should be limited (2 weeks??) 5. Can we keep us un-accountable for all items after the above periods?? 6. How can we ensure that the buyer will keep paying the installments for seller financing? Any late fee? Can I put the lien on the business? 7. There is a franchise transfer fee $[AMOUNT] and it should be paid from the current business. Is there any chance that they can come back and negotiate the price again during the LOI period? If yes, how can we stop that? How much access can we give them to our system/books/facility without informing the staff or daily operations?
Ok thanks! What you can do is you can send a revised LOI or an email listing the counter. You might say you appreciate their interest and are countering with a $[AMOUNT] total purchase price, with $[AMOUNT] as the minimum down payment and the remaining $[AMOUNT] financed by you, but with 0% interest and repaid within 12–15 months. Also, you should make clear in the counter that the $[AMOUNT] cash investment figure (from your info sheet) is your baseline and that you’re already absorbing your $[AMOUNT] in unpaid labor. That justifies holding firm at $[AMOUNT].You can add a late fee of something like $[AMOUNT] per missed payment. Plus, make it clear in the counter that the $[AMOUNT] franchise transfer fee will be paid by the business, not you personally. You can limit both. In your counter, propose that the exclusivity/LOI period be 14 calendar days. Also state that your transition support is capped at 2 weeks, preferably remote unless otherwise agreed. Because their LOI is non-binding (except for confidentiality and exclusivity) it's non-binding, but to move things along you can say in your counter that price and payment terms are “firm and non-negotiable upon execution.| I know liability is a concern so in your final agreement, include language that you are not responsible for any liabilities after the training period. You can state this in the LOI preliminarily as: “Seller shall not be responsible for any business operations, liabilities, or obligations following the completion of the 2-week transition period.” You should also require a signed promissory note with a personal guarantee. As far as the data, you can give them limited financial data like a redacted Quickbooks record, and a walkthrough outside business hours, but it’s totally fine to say that operations staff are not aware of the sale and therefore access must be limited until closing.
Shouldn't the LOI come from buyer? Can seller send a counter LOI? I need your help to draft the counter, if that is customary. I want to send the response this week.
So, I have seen the letter of intent comes from either party. The law does not required when it comes to a specific party. The website requires that I charge more for this, or since I'm not licensed in your state, I wouldn't be able to do that, but if you post a job on this site (bids are free to post), you can get a lawyer licensed in your state to draft it up for you.
Yes, it will be separate. I like to work with you as you have the context and you have been helping me on this. What will be your flat fee to work on LOI, possible sale contract (review or counter) and guiding me till the end? Considering it will go to sale.
Hello! I totally understand and I am very flattered about that, but I wouldn't be able to do that kind of work for you. I can answer general legal questions that you have, like I been doing, but if you need specific and detailed work on the letter of intent and need several reviews and revisions and analysis, my recommendation is to just post a job for that. Because I'm not nice to seeing, because I'm not licensed in your state, I don't want to expose myself unnecessarily, but more importantly, I don't want to miss something relevant to your state law that would be necessary. I'm so sorry!
Sure, I respect your decision. Let's continue our chat as we are doing here. For the documentation, I look for someone with VA license.
You're most welcome and I'm so sorry about that.
Dolan: As you mentioned, I have drafted the attached revised LOI. I added most of your suggestions in yellow, but I did not mention that "$[AMOUNT] cash investment figure (from info sheet) is baseline". I will add something vague in the email to them. I will appreciate your input.
Did you get chance to take a look? Sorry for the jolt.
Hello there! I have no clue why this did not send and I"m so sorry! Ok - Normally, we have to charge for document review, but I threw it in for free this time since you are a valued customer! Your revised LOI looks great because it incorporates pretty much everything. What you can add is: 1. In the “Additional Clause” section, this part: "Once agreed, the term and payment terms are ‘firm and non-negotiable upon execution of the LOI.’” You can say: “Upon execution, the purchase price and payment terms shall be deemed final and non-negotiable.” It's petty, but it is just more concise. As far as the late fee, you can say, “A late fee of $[AMOUNT] will apply for each missed installment, plus an additional penalty of $[AMOUNT] per day until the payment is made in full.” I like that you said: “Buyer will require signed promissory note with a personal guarantee for the seller financing.” In your email to them, it’s smart to refer to your “significant cash investment into the buildout and operations,” which justifies the purchase price. You can say something like: “Given the substantial capital we've put into this location and the operational foundation we've laid, we feel this revised structure strikes a fair balance.”
Thank you Dolan. In future, I will be careful about the review, but let's continue the suggestion. I really like your tips. Question for suggestion: 1. How to mitigate if there is any question during the LOI period without impacting the price deal? Should I include any language in revised LOI? 2. How can we make the LOI, very close to sale, though it is non-binding. I do not want to make it fall apart.
Sure thing! You can include language in the LOI that the price and payment terms are “firm and non-negotiable upon execution,” which you already started to do. This discourages the buyer from reopening price discussions under the guise of due diligence. If questions arise, respond in writing and frame answers as clarifications onl. To your second question, the trick is to tighten the contingencies and deadlines—limit due diligence to 10–14 calendar days and require the purchase agreement to be signed within a set period (e.g., 21 days of LOI signing). You should also include a clause that both parties will work in “good faith to execute a definitive agreement based on the terms outlined herein." Acting in good faith is implied, but having it in there can help. Attach a sample or draft MPIA to the LOI so you’re already halfway to the final deal.
Hello Dolan. what is the difference between "MIPA execution" and "Target closing"? or what is the difference between MIPA and Sales contract? Do you have a sample sales contract?
Do we really need a MIPA execution if we like to sell 100% of the LLC? What should be the process to take ourselves completely out from state registry and void landlord guarantee
Hello! So you don’t strictly need a MIPA if you’re selling 100% of the LLC, but it’s the standard, best, and cleanest way to document the full transfer of ownership. It protects both buyer and seller by spelling out terms, reps and warranties, and closing conditions. A simple sales contract could technically be used, but a MIPA is specifically designed for selling LLC interests. The “MIPA execution” is when both sides sign the agreement. The “Target closing” is the date when the deal is finalized, meaning payment is made, interests are transferred, and you are out of the business. If the buyer is taking over the business, they’d typically file updated statements with the state, and you’d resign as manager/member. For the landlord guarantee, that’s a separate issue. You’d need to negotiate a release with the landlord or have the buyer formally assume the lease and guarantee (with landlord consent), otherwise your guarantee stays in place.
Dolan: We fired an employee 2 weeks back as she quit a full paid training. Now she email the below.... Good evening, I seen that I won’t be getting my last paycheck due to an airfare ticket and a cash advance payment. It was never relayed to me that if I didn’t go on the trip I would have to paid for that. If I don’t get my last paycheck I will be reaching out to The Virginia Department of Labor and Industry or an employment attorney. Me not returning to work was due to personal issues that were out of my control. It wasn’t in writing nor ever discussed to me that my last check would be withheld for circumstances that were out of my control. In Virginia it is illegal due to lack of agreement and considered unilateral deductions. I hope this can be resolved without involving 3rd parties. ----------------- I am planning to send the below response. Am I in the right path? [NAME]: We are really disappointed by your lack of responsibility for the training.to the center, while we placed our full trust on you. Training was part of the successful on-boarding to the company, which was communicated during the interview. It is also in the employee handbook. As you decided not to continue the training without any prior approval, it is treated as voluntary separation by the employee. In the offer letter you have signed that we can recoup the investment in the event of any employee voluntary separation without any proper notice after signing the offer letter. For your last pay period, you have a total 40 hours of work week. Your last paycheck was not withheld. It was executed and there was deduction for non-refundable airfare of $[AMOUNT] and training fee of $[AMOUNT] from after-tax balance to recoup our investment according to the offer letter. By the way, as written on the termination letter, you have not returned the door key and FOB within 3 day. Based on the Virginia law, this is a criminal offense. I hope you will return the key and FOB immediately without involving the police case. Thanks.
Here’s a concise response to each of the employer’s concerns and questions, using Virginia law and best practices: Legally in VA unless the employee agreed to those specific deductions in writing and the deductions do not reduce the pay below minimum wage. In Virginia, employers cannot make deductions from wages unless the employee knowingly and voluntarily authorizes it in writing. A general clause in an offer letter may not be sufficient unless it spells out the exact deductions and amounts. Even if the employee voluntarily quit, the employer still cannot unilaterally deduct for airfare or training without a signed, specific reimbursement agreement. You as the employer, must show the employee was told that quitting early would trigger these costs, and that the employee agreed in writing. From the employee’s perspective, this could look like nonpayment. If there was no written agreement for those deductions, the employee is within their rights to file a wage complaint. So here is what you need to do: The best course of action is to review whether the deductions were lawful under Va. Code § 40.1-29 If not, it’s safer to just pay the deducted amount and then send a calm, professional message requesting reimbursement separately or seeking return of the items. Consider using small claims court if needed. Plus, remember wages are tax deductible so this may save you money on the back end.
I'm sorry for the confusion on this. It says "Here’s a concise response to each of the employer’s concerns and questions, using Virginia law and best practices." That part wasn't for you. I use an editor to help with drafting responses to avoid typos because I'm a terrible speller! Let me know if you have any questions.
No worries.
Dolan: I need some advice. ----------------------------- We are planning to sell our LLC (part of franchise) with seller financing. The agreed prices is $[AMOUNT] with $[AMOUNT] down. Buyer will pay the rest in next 18 months. The buyer is the brother of adjacent franchise location's owner (LLC). They both are non-US citizen. The owner of adjacent franchise has applied the business green card through that (LLC) investment. The good news is that they both are co-signer of their franchise agreement for that adjacent location. Now my question is: As the lender of seller financing, what are the documents I can request for due diligence from buyer. I like to make sure the buyer is financially sound and I can hold on his personal assets in case of any default. Here are my idea, please add more as needed. Identification Doc - Passport - SSN - DL Legal Doc - Another location's franchise document - Another location's LLC document - Brother's consent for personal guarantee (as the brother has Green card, but the buyer does not) Financial - Bank statement - US and Foreign - Any explanation of unusual fund movement
Good afternoon [NAME]! Thanks for contacting me. I think your list is a really good start. I did some thinking about this and think you should use the list below: 1. Passport (already on your list) 2. Driver’s license (already on your list) - This can be from any state. 3. SSN or ITIN (if available) 4. Proof of immigration status (visa, green card, etc.) For this, something like a valid visa (like an E-2 investor visa or L-1 work visa), a green card (also called a Permanent Resident card), an EAD (employment authorization document), an I-94 Arrival/Departure record showing current visa status, or a passport with a U.S. entry stamp and visa page. Immigration law is outside my general area of expertise, but in my experience helping close deals in the past, these things can help you ensure they are who they say they are. For legal docs, you should have; 1. The LLC operating agreement for their current business 2. Franchise agreement for the current location (already on your list) 3. Articles of organization or certificate of formation for LLC 4. Any amendments to LLC documents (if ownership has changed) 5. Any personal guarantee agreement signed by buyer and brother 5.. Consent resolution from their LLC authorizing the guarantee or purchase. This is usually done by a meeting of the parties with a written resolution for an agreement to buy the business. For financial docs: 1. Personal financial statement listing all assets and liabilities. This does not need to be signed off on by an accountant, but something where you can at least determine they have the funds to buy it; 2. Try to ask for the past 2 years of personal and business tax returns (if filed in the US). 3. 6 to 12 months of recent bank statements (US and foreign — already on your list) 4. Credit report 5. Proof of other business or real estate ownership Evidence of liquid assets (cash or easily sold investments) 6. List of any existing debts or liabilities 7. Explanation of any large or unusual transactions (already on your list). As a bonus tip: have them write a sworn declaration about this. A simple affidavit is helpful. An affidavit is just a statement stating that under the penalty of perjury, what they are saying is true. For miscellaneous documents; 1. Business plan or financial projections for the new location (to show how they plan to pay off seller financing) 2. Collateral agreements (if you plan to secure personal or business assets beyond just a personal guarantee) Let me know if you have any other questions. thanks!