Franchise Acquisition Lawyer in Michigan

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Acquisition Stars advises buyers and sellers on franchise acquisition lawyer matters across Michigan.

Serving 2 markets across Michigan.

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Franchise Acquisition Lawyer Practice in Michigan

Acquisition Stars advises buyers and sellers on franchise acquisition lawyer matters across Michigan. Alex Lubyansky leads every engagement, and has been M&A counsel since 2013 across transactions of varying complexity, from lower-middle-market deals to multi-party structures.

Michigan Transaction Considerations

  • Michigan's automotive industry creates unique M&A considerations, including complex supply chain contracts, UAW labor agreements, and environmental liabilities at manufacturing sites
  • Michigan's Antitrust Reform Act provides a statutory framework for non-competes that differs from the common-law approaches of neighboring states
  • Michigan Renaissance Zone benefits (tax-free zones) may be relevant to acquisitions of businesses operating in designated areas

Discuss Your Michigan Transaction

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Franchise Acquisition Lawyer Service Areas in Michigan

Acquisition Stars represents clients in each of the following markets. Click any city to learn about franchise acquisition law services in that area.

Ann Arbor

Ann Arbor Franchise Acquisition Lawyer

Greater Grand Rapids Area

Ada Franchise Acquisition Lawyer

Michigan Legal Framework for Franchise Acquisition Law

Non-Compete Agreements

The seller's covenant and the franchisor's in-term and post-term covenants must both fit what the state will enforce.

Enforceable under statutory framework (MARA). Reformation available.

Enforceable under the Michigan Antitrust Reform Act (MARA), MCL 445.774a. Non-competes must be reasonable in duration, geographic area, and type of activity. Michigan courts apply the "rule of reasonableness" and may reform overbroad covenants. Typical enforceable periods are 1-3 years depending on the circumstances.

Tax Considerations

Sales tax on transferred equipment and inventory, plus successor liability, shape the resale price allocation.

Michigan imposes a 6% Corporate Income Tax (CIT) on C-corporations. Pass-through entities are generally not subject to entity-level tax. Michigan uses a single sales factor apportionment formula with market-based sourcing. The state repealed its Michigan Business Tax in 2012 and replaced it with the simpler CIT.

Filing Requirements

Franchise registration and relationship laws add a franchisor consent step and disclosure timing to the standard entity filings.

Entity mergers and conversions are filed with the Michigan Department of Licensing and Regulatory Affairs (LARA), Corporations Division. Annual reports are required. Certain regulated industries require separate filings.

Bulk Sales / Asset Purchases

If the transaction transfers assets, check whether creditor-notice or tax-clearance rules in the state affect the closing date.

Michigan has repealed UCC Article 6 (Bulk Sales). The Michigan Department of Treasury can impose successor liability on asset purchasers for the seller's unpaid taxes. Buyers should request a tax clearance letter before closing.

The federal framework for a franchise resale

  • Buying an existing franchised location is not the same transaction as buying an independent business. The buyer is stepping into a relationship the franchisor controls, so the purchase depends on the franchisor's consent to the transfer, not only on agreement between the buyer and the seller. The franchise agreement, not the purchase agreement, usually sets the conditions the transfer has to satisfy.
  • Whether the buyer has a federal right to current disclosure depends on the franchisor's role and any exemption. Where the franchisor signs the incoming owner to its current agreement with significant involvement, the rule can reach the transaction; where the buyer only takes assignment and the franchisor merely consents, it may not. The remaining term, and whether renewal survives the transfer, changes what the buyer pays for.
  • Franchisors commonly charge a transfer fee and require a general release from the seller as conditions of consent, protecting the franchisor from claims tied to the outgoing owner's tenure. A buyer's counsel reviews the transfer conditions in the franchise agreement early, because a franchisor's refusal to consent, or a demand the seller cannot meet, can stall or kill a deal that both sides have already priced.

Advance disclosure depends on the deal shape

For a franchise sale that is not exempt, the FTC Franchise Rule requires furnishing the current disclosure document at least 14 calendar days before the franchisee signs a binding agreement with, or makes any payment to, the franchisor or an affiliate, under 16 CFR 436.2(a). A payment to the selling franchisee, or a signed purchase agreement with the seller, does not by itself start that period. Two definitions can exclude a resale: a transfer by an existing franchisee is not a sale where the franchisor had no significant involvement with the buyer, and approval or disapproval alone is not significant involvement, under 16 CFR 436.1(t); a franchisee selling only its own outlet is not a franchise seller, under 16 CFR 436.1(j). Exemptions in 16 CFR 436.8 can also apply. Confirm which path applies before assuming a federal 14-day review right.

Sources: 16 CFR 436.2(a), 16 CFR 436.1(t), 16 CFR 436.1(j), 16 CFR 436.5, 16 CFR 436.8

Diligence focus for a franchise resale

  • Remaining term on the franchise agreement and renewal eligibility
  • Franchisor's consent conditions and any transfer fee
  • Training requirements the incoming owner must complete before opening
  • Scope of the general release the franchisor is requiring
  • Whether the current form of agreement differs from the seller's

Other M&A and Securities Services in Michigan

Acquisition Stars handles M&A transactions for Michigan clients and works with securities counsel on securities matters. Alex Lubyansky leads every M&A engagement.

Business Acquisition Lawyer in Michigan SBA Acquisition Attorney in Michigan Purchase Agreement Attorney in Michigan Due Diligence Attorney in Michigan LOI Attorney in Michigan

Ready to Discuss Your Michigan Deal?

Alex Lubyansky leads every franchise acquisition law engagement, with an associate supporting the work.

M&A counsel since 2013. Nationwide practice. LOI through closing.

Request Engagement Assessment

We review every transaction inquiry within one business day.

Your information is kept strictly confidential and will never be shared. Privacy Policy