Property aspects of a national pharmaceutical franchise

24 May 2023

Maria Nicol is a principal associate in our commercial property department who specialises in property aspects relating to franchise matters.  

Higgs were instructed by a franchisee of a large national pharmaceutical company, S Limited to assist with all aspects of the purchase of the franchise business. S Limited were buying the franchise as well as taking a sublease of part of the property occupied by the pharmaceutical company. Katie Willems of the corporate law department advised on the purchase of the business aspects, Laura Pearson dealt with the commercial law aspects and Maria advised on the property aspects.

S Limited had not dealt with the purchase of a franchise before so were heavily reliant on a high level of advice throughout the process.  Maria initially spoke to the client contact and recommended the scope of work required from a property  perspective so that S Limited could decide what they needed. S Limited chose not to conduct searches against the property due to the nature of the property.  They were comfortable that the landlord had satisfied them in terms of the searches they received for their headlease. 

Maria formally reported on the franchise lease terms in writing and then organised a meeting with the directors of S Limited as required to go through the same.  There were a number of points in the lease they were not comfortable with namely the contractual term, the lack of a break clause and the fact the landlord could determine the lease at any time to name a few. Maria raised the issues which the landlord’s solicitor and after much negotiation the landlord conceded on a number of the points raised.  All negotiations were considered in light of the terms of the franchise agreement so that the two documents aligned in terms of expiry and determination in accordance with the break clause.  Maria was very pleased of the outcome as ordinarily franchise lease terms tend to be non-negotiable. S Limited were also extremely pleased.

Whilst negotiating the lease terms Maria negotiated the licence to sublet with the head landlord together with the tenant’s solicitor. 

Completion of the licence to sublet, franchise agreement and franchise lease took place with S Limited being fully comfortable with all aspects of the matter.  Maria further prepared the Stamp Duty Land Tax return for S Limited and applied to deal with post completion aspects in relation to the lease. 

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