Goodwill Agreement: Everything You Need to Know

In order to sell a business, a goodwill agreement is required in the state of Florida. This document ensures that the purchaser will receive the benefits of the business’ goodwill, which is the value associated with intangible business assets, such as the reputation and customer base of the company. Goodwill can account for 70-90% of a business’ value. A goodwill agreement is especially important when there is a lack of tangible assets that can be transferred with the business, such as intellectual property.

What Does the Goodwill Agreement Cover?

Goodwill is the value of a company’s reputation, customer base, and some other intangible assets. Goodwill can be as simple as having a strong reputation and a devoted fan base. In certain situations, goodwill may take the form of intellectual property or desirable domain names. 

Who Drafts the Goodwill Agreement?

A goodwill agreement is typically drafted by a business broker, who will help to negotiate the terms of the sale and draft the document. The broker will also work with the parties to determine a fair price for the goodwill of the business.

Important Factors in the Goodwill Agreement

When drafting a goodwill agreement, it is important to consider the following factors:

  • The length of time the goodwill will be in effect
  • The geographical area covered by the goodwill
  • The type of business being sold
  • The expected growth of the business
  • The history of the business
  • The current financial state of the business

A goodwill agreement should be clear and concise and should be reviewed by an attorney before it is signed. This document is a legally binding agreement and should be treated as such.

Expertly-Written Goodwill Agreements for Tampa Bay Business Sales

If you are selling a business in Florida, a goodwill agreement is a necessary part of the process. By working with a business broker and an attorney, you can ensure that your agreement is fair and protects your interests. For the best business broker in Tampa, look no further than Tampa Business Broker Inc. Contact us at 813-469-7957 or to get started today!