- (07) 5506 9800
- office@hqf.com.au
- 2/82 Marine Parade, Coolangatta, 4225, QLD
- PO Box 327, Coolangatta
BUSINESS AND COMMERCIAL LAW
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A client called me last year, excited. He’d found a buyer for his café. They’d shaken hands, agreed on a price, and wanted to settle in three weeks.
“Three weeks?” I said. “Have you spoken to your landlord?”
Silence.
That deal took four months to settle. Not because anyone was difficult. Not because the price changed. But because nobody had factored in the time it actually takes to get all the moving parts aligned.
This happens more often than you’d think when selling a business in Queensland. Business owners spend months, sometimes years, building something valuable. Then when it’s time to sell, everyone wants it done yesterday.
I understand the impulse. The buyer is keen. The seller is ready to move on. Momentum feels important.
But a business sale isn’t a property settlement. There are more parties involved, more consents required, and more things that can quietly stall the process while everyone waits
If your business operates from leased premises, and most do, the lease is often the most valuable part of the sale. A great location with good terms can be worth more than the equipment and stock combined.
But here’s what catches sellers off guard: you can’t just hand that lease to the buyer. The landlord must agree.
This is called a lease assignment, and the landlord must provide formal consent. Some landlords move quickly. Others take weeks to respond. Some want to meet the buyer. Some want to renegotiate terms. Some use it as an opportunity to increase the rent.
And until that consent comes through in writing, the deal can’t settle.
I’ve seen buyers walk away because the landlord took too long. I’ve seen sellers lose their preferred buyer because they couldn’t guarantee the lease would transfer. I’ve seen deals renegotiated at the last minute because the landlord demanded a rent increase as a condition of consent.
None of this is unusual. It’s just the reality of how business sales work in Queensland.
From the landlord’s perspective, they’re allowing a new tenant to take over obligations under the lease. They want to ensure the new tenant can pay rent, maintain the premises, and honour the lease terms.
Landlords typically require:
Each of these requests adds time to the process. Even a cooperative landlord who approves the assignment quickly needs time for their solicitor to prepare the formal consent documents.
The landlord is the most common bottleneck, but it’s not the only one.
If your business has employees, the buyer needs to understand their entitlements, accrued leave, long service leave, redundancy obligations. These liabilities affect the purchase price, and sorting through the details takes time.
Under Queensland’s Fair Work Act, employees transfer to the new owner automatically in many business sales. The buyer inherits all accrued entitlements. Calculating these amounts accurately and documenting them properly requires careful review.
If you have supplier contracts, equipment leases, or franchise agreements, many contain “change of control” clauses. The other party may need to consent to the new owner taking over. Some contracts can’t be assigned at all.
Franchise agreements are particularly complex. Franchisors often have detailed approval processes for new franchisees, including training requirements, financial assessments, and background checks.
If the business holds any licences or permits, food safety, liquor, specific trade licences, the buyer will need to apply for their own. That’s a separate process with its own timeline, and the business can’t legally operate without them.
In Queensland, liquor licences don’t transfer automatically. The buyer must apply for a new licence, and the application process can take 6-12 weeks or longer depending on the type of licence and any objections received.
If there’s a loan secured against the business assets, the lender needs to release their security interest. That means paperwork, discharge documentation, and final payout calculations. Lenders aren’t known for moving fast, especially if the business has multiple secured creditors.
Each of these is manageable. But each takes time. And when you stack them together, a “quick” sale becomes a logistical puzzle.
Start earlier than you think you need to.
If you’re seriously considering selling your business in Queensland or New South Wales, come and talk to us six months before you want to be out the door. Not because the legal work takes six months, but because it gives us room to deal with surprises.
We can review your lease and understand what the assignment process will look like. We can identify any contracts that might be problematic. We can make sure your employee records are accurate and your entitlements are calculated correctly.
When a buyer appears and wants to move quickly, you’ll actually be able to move quickly, because the groundwork is done.
The sellers who have the smoothest experience aren’t the ones who rush. They’re the ones who prepared before the pressure was on.
If you’re thinking about selling in the next year or two, start gathering these:
Your Current Lease Documentation: Your current lease and any variations or extensions. Know when it expires and what assignment rights you have. Check whether your lease requires landlord consent for assignment (most do) and whether the landlord can “unreasonably withhold” consent or not.
Employee Records: A clear list of employees, their start dates, leave balances, and employment terms. The buyer’s lawyer will ask for this during due diligence. Include casual employees, part-time staff, and any contractors who might actually be employees.
Contracts and Agreements: Copies of any supplier agreements, equipment leases, or franchise documents. Anything with ongoing obligations that the buyer will inherit. Flag any contracts that contain change of control provisions or assignment restrictions.
Financial Records: Your last two to three years of financial statements. Buyers want to see the numbers, and their accountants will verify them. Include profit and loss statements, balance sheets, tax returns, and BAS statements. Clean, organized financial records speed up due diligence significantly.
Licences and Permits: A list of any licences or permits the business holds, and an understanding of whether they transfer or need to be reapplied for. Include food safety certificates, trade licences, liquor licences, and any industry-specific registrations.
None of this is complicated. But having it organised before negotiations start puts you in a much stronger position, and signals to the buyer that you’re serious and prepared.
Even with everything prepared, buyers need time to conduct due diligence. This typically takes 2-4 weeks minimum and involves:
Financial Due Diligence: The buyer’s accountant reviews financial records, verifies revenue and expenses, and identifies any irregularities or concerns.
Legal Due Diligence: The buyer’s lawyer reviews contracts, leases, employee agreements, and identifies any legal risks or liabilities.
Operational Due Diligence: The buyer assesses the business operations, talks to key suppliers and customers (with your permission), and evaluates whether they can successfully operate the business.
Trying to compress due diligence into a few days rarely works well. Rushing this process increases the risk that problems get discovered after settlement, and that creates disputes.
Some issues that commonly derail business sales in Queensland:
Undisclosed Liabilities: Tax debts, unpaid superannuation, employee entitlements, or supplier debts that weren’t disclosed upfront.
Lease Issues: Landlords who refuse assignment, leases expiring soon with no renewal option, or rent increases that make the business unviable for the buyer.
Key Person Dependency: The business relies heavily on the owner’s relationships or expertise, and the buyer can’t replicate that value.
Financial Performance: The business’s actual financial performance doesn’t match what was represented during negotiations.
Most of these are avoidable with proper preparation and honest disclosure.
Selling a business is exciting. After years of hard work, someone wants to buy what you’ve built. It’s natural to want to get it done.
But the legal process has its own pace. Landlords take time. Consents take time. Due diligence takes time.
The best thing you can do is accept that reality early, prepare thoroughly, and give yourself room to get it right.
Because a deal that settles smoothly in four months is better than one that falls apart in three weeks.
Disclaimer
The contents of this article are considered accurate as at the date of publication. The information contained in this article does not constitute legal advice. Readers should seek legal advice about their specific circumstances.
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From accepting an offer to settlement typically takes 2-4 months. The timeline depends on lease assignment approval, due diligence complexity, finance approval for the buyer, and how prepared you are with documentation. Simple businesses with short leases and no employees can settle faster; complex businesses with franchise agreements or multiple premises take longer.
It depends on your lease terms. Most commercial leases state the landlord must not “unreasonably withhold” consent, but they can impose reasonable conditions like meeting the new tenant, requiring financial information, or adjusting security deposits. If your lease gives the landlord absolute discretion, they can refuse for any reason. Review your lease early to understand your position.
Generally, yes, under the Fair Work Act’s transfer of business provisions. Employees transfer automatically with all their accrued entitlements, annual leave, long service leave, and redundancy rights. The buyer becomes responsible for these liabilities, which is why employee entitlements significantly affect the purchase price.
If a sale doesn’t proceed, you’re usually back to square one. However, if you’ve disclosed confidential information during due diligence, ensure you had a proper confidentiality agreement in place. If the buyer has paid a deposit and pulls out without valid reason, you may be entitled to keep the deposit. Have your lawyer include appropriate conditions and termination provisions in the contract.