Australia Post
Australia Post approval of the buyer.
An LPO licence has no fixed term and can be assigned or transferred, but only with Australia Post's approval. Once a sale is agreed, the seller notifies Australia Post and the buyer goes through its assignment process:
- an online information request
- an assessment and selection interview, generally at the state head office
- Australia Post training, at head office and in a retail outlet
- signing of the LPO agreement and handover of the business.
Each stage is reviewed before the next begins, and Australia Post expects the process to take about 90 days. The buyer may be asked for details of the entity that will hold the agreement, a seven-year employment history, cash-flow projections, a site-specific business plan, referees, a personal assets and liabilities statement and proposed financing (Australia Post, LPO information).
Tattersalls
Tattersalls (The Lott) approval.
Tatts agencies now trade under The Lott brand, but the approval still sits with the lottery operator, not the seller. The buyer applies to The Lott, which reviews the business and the site and holds face-to-face interviews with the people who will run it. At least two of them must complete the two-week New Retailer Program before they can sell lottery products (The Lott, become a franchisee).
Training needs to be booked and finished before settlement, so the timetable in the contract should allow for it.
The lease
Transferring the lease.
Most post offices and Tatts agencies trade from leased shops, many of them in shopping centres. The landlord's consent to transfer the lease is usually needed, and centre landlords often ask for financial information, guarantees or a bank guarantee from the buyer. The remaining term and any options matter too: they affect the value of the business and whether the buyer can get finance.
Most of these leases are retail leases under the Retail Leases Act 2003 (Vic), which sets rules for disclosure and for how a landlord deals with a request to transfer.
The contract
Deposits, approvals and deadlines.
Most agency sales fall over, if they fall over, at the approval stage. The contract should deal with that in plain terms:
- which approvals the sale depends on, who applies and by when
- who holds the deposit, and when it is released or refunded
- a sunset date, and whether either side can extend it while an application is still being assessed
- how stock, the cash float and commissions are counted and adjusted at settlement
- when the buyer's training happens and who runs the shop in the meantime.
Combined businesses
Post office and Tatts in one shop.
Many agencies combine a post office, a Tatts agency and a newsagency. Each approval is a separate process with its own timetable, so the buyer can be approved by one and refused, or delayed, by the other. The contract needs to say what happens then: whether the sale goes ahead without that part of the business, whether the price changes, or whether either side can end the contract. That decision is far easier to make before signing than after.
