Letter of Intent Template for Acquiring a Farmers Market Booth Business

Buyer and Seller Identification

Identify the legal names of the buyer entity and the seller, including the business name under which the farmers market booth operates, any DBAs, and the market locations where the vendor currently holds active permits.

💡 Sellers often operate informally under a trade name that differs from their legal entity or sole proprietorship. Confirm early whether the business is an LLC, sole proprietorship, or DBA, as this affects how assets and liabilities transfer and whether any existing vendor agreements are held in the seller's personal name versus a business entity.

Proposed Purchase Price and Valuation Basis

State the proposed total purchase price, the valuation methodology used (typically a multiple of Seller's Discretionary Earnings for businesses in this range), and any contingencies that could adjust the final price based on due diligence findings.

💡 Farmers market businesses often trade at 1.5x–3x SDE. If the seller's revenue is heavily cash-based with limited POS documentation, build in explicit price adjustment language. Sellers who resist this clause may be overstating earnings. A reasonable seller with clean records will accept a verification-contingent price as standard practice.

Deal Structure and Payment Terms

Define how the purchase price will be paid, including any seller financing, earnout provisions, or holdbacks tied to specific milestones such as successful permit transfer or completion of a training period.

💡 Earnouts tied to permit transfer are especially important in this industry because market managers control vendor slots and may require interviews, waiting lists, or board approval before recognizing a new owner. Tying a portion of the seller's payout to a successful transfer protects the buyer from acquiring a business with no operating platform. Sellers should view this as reasonable given the inherent uncertainty.

Assets Included in the Sale

List all tangible and intangible assets being transferred, including equipment, inventory, recipes, branding, supplier contacts, social media accounts, customer lists, and market permits to the extent transferable.

💡 Intangible assets — especially recipes and brand identity — are often the most valuable parts of a farmers market business and among the easiest for sellers to undervalue. Buyers should insist on a detailed asset schedule attached to the LOI. Sellers should resist vague 'all assets' language without a written inventory to avoid post-closing disputes over what was included.

Due Diligence Period and Access

Specify the length of the due diligence period, what records the seller must provide, and the buyer's right to speak with market managers, suppliers, and staff during this period.

💡 Many sellers are protective of market manager relationships and nervous about revealing a potential sale to their market community. Negotiate a protocol for how buyer-market manager conversations will be handled — ideally with the seller present — to avoid disrupting the vendor relationship before a deal is signed.

Exclusivity and No-Shop Period

Define the exclusivity window during which the seller agrees not to solicit or entertain other offers while the buyer completes due diligence and moves toward a purchase agreement.

💡 Exclusivity periods of 30–45 days are typical for businesses in this size range. Sellers who have been on the market for a long time may push back on longer windows. If a deal is complex due to permit transfer complications, negotiate an extension right if you can demonstrate good-faith progress toward closing.

Seller Training and Transition Period

Define the seller's obligation to remain involved post-closing to train the buyer on booth operations, production methods, supplier relationships, customer service practices, and market routines.

💡 For a farmers market booth, the seller's personal presence and relationships are often the business. A 90-day transition period is strongly preferred over shorter windows. If the seller insists on a shorter period, consider a consulting agreement for ongoing availability by phone or text for an additional 6–12 months.

Conditions to Closing

List the specific conditions that must be satisfied before the transaction can close, including permit transfer approvals, satisfactory due diligence, and execution of final transaction documents.

💡 Permit transferability is the single most important closing condition in this industry. Do not waive this condition or close without written market manager confirmation. In markets where permits are non-transferable, the buyer may need to apply for a new permit independently, which can take weeks or months and carries no guarantee of approval.

Confidentiality

State that both parties agree to keep the terms of the LOI and all due diligence materials confidential and will not disclose the pending transaction to customers, market communities, suppliers, or competitors.

💡 In tight-knit farmers market communities, news of a sale can spread quickly and damage customer trust, disrupt the vendor relationship with the market, or alert competitors. Sellers are especially sensitive to this. Make sure your attorney, accountant, and any business broker are covered under the confidentiality provision.

Non-Binding Nature and Governing Law

Clarify which sections of the LOI are binding versus non-binding, and specify the governing law that will apply to any disputes.

💡 Make sure your attorney clearly marks which clauses are binding. In many farmers market deals, buyers and sellers are operating without experienced M&A counsel. A clear non-binding statement prevents either party from claiming the LOI itself created an enforceable obligation to close.