Restaurant lawyer in Paris

Because the preliminary agreement fixes almost everything. The price, its breakdown, the elements sold, the conditions precedent and the timetable are all settled in it, and the seller's privilege will cover only the items listed in the sale and in the registration or, failing a precise designation, the trading name, the business name, the leasehold right and the customer base, with separate prices for the intangible elements, the equipment and the stock (Article L. 141-5). Once it is signed, often only the negotiation of details remains.

For a restaurant, three conditions matter particularly: obtaining the loan, the landlord's consent where the lease requires it, and the fate of the terrace, for which the buyer may apply for authorisation before the sale, the authorisation taking effect only once the transfer has been proved to the administration (Article L. 2124-33, public domain). The seller must also disclose the decisive information that the buyer legitimately does not know, a duty that the parties can neither limit nor exclude (Article 1112-1 of the Civil Code).

The firm reviews the preliminary agreement against the lease, the accounts and the licence, proposes the clauses that are missing and points out what must be obtained before the final deed. The review is carried out on the documents, before any signature.

Buying the business transfers operating elements, without the past of the selling company. The Court of Cassation holds that, absent an express clause, "the sale of a business does not automatically carry with it the obligations to which the seller may be bound under commitments it initially entered into" (Cass. com., 25 October 2023, No. 21-20.156) (our translation). The buyer therefore takes over only what the deed provides, save for statutory exceptions such as employment contracts.

Buying the shares, by contrast, brings the buyer into a company that remains the same, with its debts, its contracts and its disputes. The company remains the tenant, so the transaction does not in itself amount to an assignment of the lease; the lease must nevertheless be read to check that no clause governs a share transfer or a change of company officer, and the company's accounts and commitments must be audited.

In both cases, the drafting of the deed matters. In a case concerning the transfer of shares in a company operating a business located on the public domain, the Court of Cassation recalled that "the lawyer who drafts a deed owes all parties, whatever their personal skills, a duty to advise and, where appropriate, to warn, in particular as to the effects and risks of the stipulations agreed" (Cass. 1re civ., 10 November 2021, No. 20-12.235) (our translation). The firm compares the two structures according to the known liabilities, the lease and the financing.

Not before the objection period has expired. The buyer has the sale published in an authorised newspaper and in the Bodacc within fifteen days of the deed (Article L. 141-12). During the ten days following the last publication, each creditor of the seller, even if its claim is not yet due, may object to the price being paid, although the landlord cannot object for current or future rent (Article L. 141-14).

A buyer who pays before that deadline is not discharged as against third parties (Article L. 141-17). The Court of Cassation confirmed this against an assignee who had paid part of the price directly: "the buyer of a business who pays the seller before the expiry of the ten-day period following publication of the sale, open to the previous owner's creditors to object to payment of the price, is not discharged as against third parties" (Cass. com., 8 March 2023, No. 21-18.677) (our translation). The judgment, unfavourable to the buyer, specifies that creditors are third parties whether or not they have objected.

Hence the use of escrow: the price is handed to a third party named in the deed, who releases it only after the objections have been examined. The firm organises this escrow and checks the state of registrations before signing.

The landlord cannot prohibit it: agreements intended to prohibit the tenant from assigning the lease to the buyer of its business are deemed unwritten (Article L. 145-16). The landlord may, however, regulate it through an approval clause, through intervention in the deed or through a joint and several guarantee from the seller, which the landlord can invoke only for three years from the assignment (Article L. 145-16-2). This ceiling does not apply immediately to leases in force when the text took effect in 2014: the Court of Cassation holds that this text "does not meet an imperative reason of general interest justifying its immediate application" (Cass. 3e civ., 11 April 2019, No. 18-16.121) (our translation). The date of the lease and its contractual history must therefore be checked.

The approval clause applies even to the sale of the whole business. In a judicial liquidation, the Court of Cassation overturned a judgment that had set it aside on the ground that it covered only the assignment of the lease alone, and held that "the landlord is entitled to rely on the lease clause providing for the landlord's approval of the assignee" (Cass. com., 19 April 2023, No. 21-20.655) (our translation). This outcome is unfavourable to a successor who neglects approval.

A seller who disregards it bears the consequences. Where the seller must guarantee the assignee against the eviction it suffers because the landlord, to whom the assignment is unenforceable, denies it the status of tenant, the Court of Cassation holds that "it cannot obtain from the evicted assignee reimbursement of the rent and occupation indemnities it paid to the landlord for the period during which the assignee occupied the premises without fault" (Cass. 3e civ., 4 July 2024, No. 23-13.822) (our translation).

It can be, provided that the deed designates it and that the licence is still in existence. The 4th category licence allows the sale of all drinks whose consumption remains authorised for consumption on the premises; the 3rd category licence is limited to groups one and three (Article L. 3331-1). A restaurant that sells alcohol only with main meals and as an accessory to food may be content with a restaurant licence: the small licence for third-group drinks, the restaurant licence for all drinks whose consumption is authorised (Article L. 3331-2).

Transfer is subject to formalities. The change of owner or manager must be declared in writing at least fifteen days before it takes place (Article L. 3332-4), and the declarant must have followed the training that leads to the operating permit (Article L. 3332-1-1). Transferring the outlet within the département requires the prefect's authorisation, after mandatory consultation of the mayors concerned (Article L. 3332-11).

The first check concerns the date of last operation: an outlet that has ceased to exist for more than five years is regarded as suppressed and can no longer be transferred, this period being extended in the case of judicial liquidation until the close of the proceedings and suspended during a provisional closure ordered by the judicial or administrative authority (Article L. 3333-1). The firm checks these points before the price of the licence is fixed.

The seller must guarantee the buyer against eviction, even without a specific stipulation (Article 1626 of the Civil Code). A seller of a business who opens a comparable restaurant in the same street therefore risks the buyer invoking this guarantee for diversion of the customer base that was sold.

The prohibition is not unlimited. In a case concerning a transfer of shares, the Court of Cassation requires that "the prohibition on the seller re-establishing themselves be proportionate to the legitimate interests to be protected" (Cass. com., 10 November 2021, No. 21-11.975) (our translation). It overturned the judgment that had penalised sellers who re-established themselves more than three years after the sale, without examining whether the prohibition was still justified at that date. Whether the prohibition is justified is therefore assessed concretely, at the time of the acts complained of, in light of the business sold and the market concerned. This outcome was favourable to the sellers in that case.

Hence the value of a non-competition clause drafted into the deed, limited in time and space, and adapted to the type of restaurant sold. The firm drafts it according to the client's position, seller or buyer, and analyses it when a dispute arises.

Yes, in businesses that are not required to set up a social and economic committee with economic powers. An owner who wishes to sell the business informs the employees at the latest one month before the sale, so that they can make an offer (Article L. 141-23 of the Commercial Code). This period results from the wording in force since 28 May 2026.

The sale may take place earlier if each employee has made known their decision not to make an offer. Where a liability action is brought, the court may, at the request of the public prosecutor's office, impose a civil fine that may not exceed 0.5% of the amount of the sale, under the same article.

The sale does not terminate employment contracts. Where the employer's legal situation changes, in particular by sale, all contracts in progress continue between the new employer and the staff (Article L. 1224-1 of the Labour Code). The buyer must therefore know, before signing, the contracts, salaries and any disputes it is taking over.

A management lease allows the operation to be entrusted to a manager who runs it at their own risk (Article L. 144-1). The owner keeps the business and receives a fee, but does not lose all interest in how it is run.

The first risk concerns publication. Until the contract is published, the lessor is jointly and severally liable with the manager for the debts incurred for the operation of the business (Article L. 144-7). An unpublished management lease thus exposes the owner to debts to suppliers it never chose.

The second concerns the staff. When the contract ends, in particular through the manager's liquidation, the Court of Cassation holds that "unless the business is ruined, termination of the management lease by the judicial liquidator returns the business to the assets of its owner, who must assume all the obligations of the employment contract" (Cass. soc., 3 April 2024, No. 22-10.261) (our translation). The owner therefore takes back the employees as soon as the lease is terminated, unless the business is ruined. The firm drafts the contract, the guarantees and the inventory, and follows the publication.

Everything depends on the permitted use under the lease. A related or complementary activity may be added to that of the lease: the tenant notifies the landlord of its intention by extrajudicial act or by registered letter with acknowledgment of receipt, stating the activities envisaged, and the landlord has two months to dispute their related or complementary nature, failing which it loses the right to do so; in case of disagreement, the court rules having regard, in particular, to the evolution of commercial practice (Article L. 145-47).

A genuinely different activity falls under full change of use, which the court may authorise having regard to the economic situation and the needs of the rational organisation of distribution, where the new activity is compatible with the purpose, characteristics and location of the building, although the first tenant of premises within a commercial unit defined by a construction programme cannot rely on it for nine years from taking possession (Article L. 145-48). The move from a traditional restaurant to a delivery-oriented kitchen, with couriers coming and going and longer opening hours, deserves to be examined from this angle.

The risk of an unauthorised activity is real: the landlord may serve a formal demand relying on the termination clause, or use it later to refuse renewal. The firm reviews the permitted-use clause, drafts the notification and answers the landlord's objection.

The landlord may refuse renewal, but in principle owes eviction compensation equal to the loss caused, which includes in particular the market value of the business, removal and relocation costs and the transfer duties on a business of equal value (Article L. 145-14). Refusal without compensation requires one of the exceptions provided by law, in particular a serious and legitimate ground against the tenant, with, for failure to perform an obligation or cessation of operation without serious reason, a formal notice by extrajudicial act that has remained without effect for more than a month, or a building to be demolished for recognised unsanitary condition or that can no longer be occupied without danger (Article L. 145-17).

The leasehold right enters into the calculation, even if the restaurateur has found cheaper premises. The Court of Cassation holds that "Eviction compensation must be set taking into account the value of the leasehold right to the premises from which the tenant is evicted, which is an element of the business" (Cass. 3e civ., 13 October 2021, No. 20-19.340) (our translation).

A disguised notice to quit is treated as a refusal. A notice offering a new lease on different terms, other than the price, "must be analysed as a notice with refusal of renewal giving entitlement to eviction compensation" (Cass. 3e civ., 11 January 2024, No. 22-20.872) (our translation). The firm quantifies the compensation and challenges the valuation proposed by the expert.

Yes. The clause takes effect only one month after a formal demand that has remained without effect, a period that the deed must mention on pain of nullity. As long as termination has not been recorded or ordered by a decision that has become final, the court seised of a request for time to comply may suspend the clause (Article L. 145-41).

This power is not limited to unpaid rent. In a restaurant case, the formal demand concerned the obligation to resume trading; the court of appeal had refused to examine the request for time. The Court of Cassation quashed the judgment, holding that "the court may decide to suspend the effects of a termination clause, whatever the breach of its obligations alleged against the tenant" (Cass. 3e civ., 6 February 2025, No. 23-18.360) (our translation).

For unpaid rent, the law of 26 May 2026 on simplifying economic life has tightened the rule: the tenant must be able to clear its debt and must have resumed full payment of the current rent before the first hearing. This regime applies to requests for suspension made from the entry into force of that law, under the same article. The firm checks the formal demand as soon as it is received, because the month runs quickly.

A business may be pledged, in particular in favour of the bank that financed its purchase (Article L. 142-1). Yet the leasehold right is often its main element: if it disappears, the security loses most of its value.

The law protects this creditor. An owner who seeks termination of the lease of premises in which a business encumbered with registrations is operated must notify the registered creditors of the claim, and judgment may be given only one month after that notification (Article L. 143-2).

An omission engages the landlord's liability. The Court of Cassation quashed a judgment that refused to compensate a pledgee creditor, although, had it been informed of the writ of summons, it "could have paid the rent arrears at the date of the formal demand to pay and could thus have preserved the leasehold right and, consequently, the business" (Cass. 3e civ., 25 October 2018, No. 17-16.828) (our translation). The firm checks the state of registrations at the registry for the place where the business is operated before any action.

Not the court. The price of the sale must be determined and designated by the parties (Article 1591 of the Civil Code), but it may be left to the estimate of a third party (Article 1592). The Court of Cassation deduces from this that "the court may not fix the price of the sale" (Cass. com., 4 June 2025, No. 24-11.580) (our translation).

In that case, the deed fixed the price on the basis of a turnover figure established by a third party appointed by common agreement, less certain sales. The lower courts had themselves quantified the items to be deducted, on which the parties disagreed. The judgment was quashed without remittal.

The lesson applies to restaurants sold on the basis of a multiple of turnover. The deed must define the figure used, the revenue excluded, the reference period and the role of the third-party valuer. The firm drafts these clauses before signing, to prevent the disagreement from leaving the sale without a price.