Walls and Business: What Murs et Fonds Means When Buying in France

Murs et fonds: what the phrase means when you buy a fonds de commerce in France

French listings for cafés, hotels, restaurants and shops come in three forms: fonds seul (the business only), murs seuls (the walls only), and murs et fonds (both). The distinction is not agent jargon - it is French property law. The premises and the business (fonds de commerce) are two different assets, and they remain two different assets even when the same person owns both. Buy the fonds and you get the clientele, the lease, the name, the equipment and the licences, but the walls stay with the landlord. Buy the walls and you become a landlord, but the business trading inside belongs to the tenant. Buy murs et fonds and you are doing two purchases, each with its own rules, its own tax and its own deed, even if they complete on the same day.

Foreign buyers lose money on this distinction in both directions: paying a business price for what turns out to be an empty lease, or assuming that owning the building means owning the restaurant inside it. This guide sets out what each formula gives you, what follows the fonds and what stays with the walls, and the lease rules that connect the two.

The walls are never part of the fonds de commerce

The premises in which a business is operated are not part of the fonds - including where the building and the fonds belong to the same person (Cass. com. 27 April 1993). A sale of the fonds therefore never transfers the walls; what generally transfers is the commercial lease over them.

The rule works in the other direction too, and this is the half foreign buyers miss. The clientele is not attached to the premises: it is born from the tenant's activity. The courts refuse to treat a clientele as belonging to a location - so owning the walls gives you rent, not customers. Where the fonds is sold and the premises are essential to the operation, the sale of the fonds necessarily carries the lease with it (Cass. com. 26 October 1993); the reverse is never true - a sale of the walls carries no part of the business.

Keep the two prices apart as well. A fonds is valued on its clientele, its lease terms, its equipment and its trading record; walls are valued as investment property, on rent and location. A listing that blurs the two is a listing to renegotiate.

Buying the fonds without the walls (fonds seul)

This is the standard purchase of a French business: you take the fonds, you become the tenant of the existing landlord, and the lease is the bridge that makes it work. Three sets of rules protect you.

The lease follows the fonds. Where the premises are essential to the operation, a shop, a restaurant, a hotel, the sale of the fonds carries the lease. And every tenant who sells a fonds has the right, as a matter of public order, to assign the lease to the buyer: any lease clause forbidding it is deemed unwritten (C. com. Art. L 145-16). The courts have struck down, on that basis:

• clauses imposing a general and absolute ban on assigning the lease;
• clauses that block the sale of an autonomous branch of the fonds, since L 145-16 draws no line between total and partial sales;
• a clause requiring the tenant to operate personally during the last three years of the lease - which made the fonds unsellable for that period;
• clauses excluding whole categories of buyers, such as companies.

But organising clauses are valid. A lease may lawfully regulate how the assignment happens, formalities, procedure, a requirement that the assignment be by notarial deed, and those clauses must be respected when the fonds is sold. A notarial-deed clause binds the sale of the whole business: the deed of sale must then be notarised. Read the lease before you price the deal, not after.

New plans need the landlord, in writing, before the sale. Buyers often want a fresh lease, or activities beyond those the current lease authorises. That takes the landlord's express agreement, an amendment to the lease (an exchange of letters can do it) or a new lease, obtained before the sale. Expect the landlord to ask a price for it: an indemnity for the change of permitted use (déspécialisation), a rent increase, or both. A purchase priced on activities the lease does not allow, without the landlord's written agreement, is a purchase priced on hope.

Fonds seul, murs seuls or murs et fonds: what are you being offered?

Pick the listing in front of you - the decoder tells you what the deal contains and the first thing to check.

Buying the walls without the fonds (murs seuls)

Buying the walls makes you a landlord, nothing more. The tenant's business, the clientele, the name, the equipment, the licences, is the tenant's property, and the existing commercial lease binds you as the new owner of the building. Your income is the rent; your rights and obligations are those of the lease and of the commercial-lease statute.

Two mistakes to avoid. Do not price the walls on the tenant's trading figures: the clientele is not attached to the premises, and if the tenant leaves, the customers leave with the tenant's business, not with your building. And do not assume that owning the walls will let you take over the trade: the fonds belongs to the tenant, and taking it requires buying it from them - a separate purchase, at a separate price, under the fonds de commerce rules. Walls are an investment in rent and location; the business is a different asset with a different owner.

Before an offer on walls with a trading tenant, read the lease as carefully as a fonds buyer would: the term, the rent and its revision terms, the permitted activities, and every clause on assignment - because on a resale of the fonds, the tenant's right to assign the lease to the buyer cannot be taken away (C. com. Art. L 145-16), and the organising clauses you inherit are the ones you will live with.

Buying murs et fonds together: two purchases, not one

Where the seller owns both and sells both, the operation stays legally double. The fonds sale follows the fonds de commerce procedure - deed, publication within fifteen days, ten days of creditor oppositions, price in escrow, registration duty at 3 % and 5 % above €23,000 (CGI Art. 719). The property sale completes before the notary as a conveyance of real estate, with its own deed and its own taxation. Same seller, same day, two closings.

The border between the two assets runs through the fixtures, and it is worth drawing carefully:

• Immovables by destination (C. civ. Art. 524). Equipment counts as an immovable by destination, and so sits on the walls' side, outside the fonds, where the owner of the building also owns the equipment, the equipment is linked to the building materially or by its purpose, and the allocation is indispensable to the building's operation. In practice the deed of sale of the fonds often includes an express clause selling these items; the fonds de commerce tax treatment then does not apply to them, and once sold they recover their movable character.
• Fixtures attached for good (C. civ. Art. 525). Equipment fixed permanently, which cannot be removed without damage, does not transfer with the fonds at all.
• Ordinary equipment. Machines, tools, vehicles and furniture needed for the operation transfer with the fonds unless the deed says otherwise - and for some activities the equipment is so essential that a deal without it is not a sale of a fonds at all: a transfer of the name, clientele, sign and supplier contracts of an industrial-modelling business failed the test because the specialised machinery had been sold off separately.

Finally, the split of the global price between walls and fonds is not cosmetic. Each portion carries its own duty regime, the fonds price must in principle be broken down between its own elements, and an unrealistic allocation invites the tax authorities to look again. Fix the split on real values, in both deeds, from the first draft.

The lease clause you found - and what it does to your fonds purchase

The lease is the bridge between the walls and the fonds. Pick the clause you are looking at - the check tells you whether it binds you.

What follows the fonds - and what stays with the walls

The working checklist for any murs-et-fonds situation:

What happens to the contracts when the fonds is sold

A point that surprises buyers on every side of a murs-et-fonds deal: the sale of the fonds does not carry the seller's contracts with it (Cass. com. 28 June 2017). A supplier contract, an equipment rental, a distribution agreement - none of them follows the business automatically. A contract moves only if three things line up (C. civ. Art. 1216): the third party accepts the transfer, the buyer agrees to take the contract over, and the transfer is recorded in writing - on pain of nullity. Where the third party consented in advance, the transfer still only takes effect against them once notified.

The case law shows how expensive the misunderstanding gets. A buyer was chased for rent on an alarm system left installed in the premises - its mention in the signed inventory of the assets sold was not enough, because no agreement with the equipment's owner had been found. A buyer of a drinks business could not enforce the seller's supply contract against a café owner, never having proved the contract had been transferred to him. A general clause about "taking over the seller's commitments to suppliers" did not transfer an exclusive-distribution contract that the deed's own annex failed to list. The rule for the deed is the same each time: name the contracts transferred, one by one, and paper the third party's consent.

Three contracts are the exception - they follow the business by law, not by clause: the employment contracts in progress, which continue with the new operator (C. trav. Art. L 1224-1); the insurance policies attached to the business, which continue subject to a statutory termination option (C. ass. Art. L 121-11); and the publishing contracts of a publisher's fonds, transferred without the authors' consent - with a remedy for the author whose interests the sale gravely compromises (CPI Art. L 132-16).

Frequently Asked Questions

This article is for general information only and states French law as published in the sources available at the date shown above. It does not constitute legal or tax advice. Whether a listing sells the walls, the business or both, and what each is worth, depends on the documents. Always seek qualified legal advice before making an offer.