As of May 2026, protecting your family restaurant from a divorce in Ontario requires a robust marriage contract. Shielding complex commercial assets like your AGCO liquor licence and commercial lease generally costs between $2,500 and $5,000 CAD in legal drafting fees.
Owning a hospitality business in cities like Toronto, Ottawa, or Hamilton is incredibly demanding. You pour your heart, soul, and endless capital into building your restaurant, bar, or café.
However, under Ontario’s Family Law Act, the value of your business built during the marriage is generally subject to equalization if you separate. 💼 Without a legally binding marriage contract (often called a prenup), your ex-spouse could be entitled to half the value of your commercial success, forcing you to sell your beloved restaurant just to pay them out.
Step-by-Step Process for Shielding Your Hospitality Business
Drafting a marriage contract for a commercial enterprise is much more complex than a standard agreement. It requires a strategic approach to business valuation and corporate structure.
Most restauranteurs work with both a family law firm and a corporate accountant to ensure every asset is locked down. 📝 Here is the standard step-by-step process to protect your life’s work.
Step 1: Conduct a Proper Business Valuation
Before you can protect your restaurant, you must know what it is worth. You should hire a Chartered Business Valuator (CBV) to assess the fair market value of the business.
This includes heavy kitchen equipment, goodwill, branding, and inventory. 💰 Both spouses must agree on this baseline value so that the financial disclosure is completely accurate and legally binding.
Step 2: Identify and Isolate Key Commercial Assets
A restaurant is not just one asset; it is a collection of valuable licenses and leases. Your lawyer must specifically list these in the marriage contract.
For instance, an Alcohol and Gaming Commission of Ontario (AGCO) liquor licence holds immense value. 🍷 The contract must explicitly state that the licence, the commercial lease agreement, and any franchise rights are strictly excluded from net family property calculations.
Step 3: Draft Strict Exclusion Clauses
The core of the marriage contract will be the exclusion clauses. These paragraphs clearly state that the growth in the value of the restaurant during the marriage will not be shared.
Your lawyer will also ensure that any future restaurants or franchises opened under the same corporate umbrella are similarly protected. 📍 This allows your business empire to grow without expanding your personal family law liability.
Step 4: Address Spousal Employment Issues
In many family restaurants, the spouse works as a manager, chef, or bookkeeper. If they contribute labour to the business, they might claim a “constructive trust” over the restaurant if you separate.
To prevent this, the marriage contract should clearly define their role. ✅ It is highly recommended to pay the spouse a fair market salary via formal payroll, rather than just sharing the profits, to prove they were fairly compensated for their labour.
Step 5: Obtain Independent Legal Advice (ILA)
A marriage contract is generally unenforceable if both parties do not fully understand what they are signing. Your partner must hire their own independent lawyer to review the document.
Their lawyer will sign a Certificate of Independent Legal Advice. 🚨 If you skip this step to save money, an Ontario judge will likely strike down the entire agreement during a divorce.
How Much Does it Cost in Ontario?
Securing a family business requires a significant upfront investment, but it is a fraction of what you could lose during a messy corporate divorce.
- Lawyer Drafting Fees: A complex B2B marriage contract generally ranges from $2,500 to $5,000+ CAD depending on the corporate structure.
- Business Valuation (CBV): Hiring a professional valuator for a restaurant usually costs between $3,000 and $7,000 CAD.
- Independent Legal Advice (ILA): Your spouse’s lawyer will likely charge $800 to $1,500 CAD to review and sign off on the contract.
How Long Does the Process Take?
Drafting a contract involving corporate assets is not an overnight task. Rushing the process right before a wedding makes it highly vulnerable to being struck down by a judge under claims of duress.
Gathering financial documents, completing the business valuation, and negotiating the terms typically takes 2 to 4 months. ⌛ You should ideally finalize the agreement well before you sign any new commercial leases or tie the knot.
Protected vs. Shared Assets in Hospitality
Understanding what you can exclude is vital for business continuity.
| Type of Asset | Without Marriage Contract | With a Marriage Contract |
| Corporate Shares | Growth is split 50/50. | 100% protected and excluded. |
| AGCO Liquor Licence | Value factored into equalization. | Shielded from personal family disputes. |
| Joint Family Home | Split equally (Matrimonial Home). | Subject to specific contract rules (cannot completely contract out of possession rights). |
Frequently Asked Questions (FAQ)
Can a marriage contract protect my business from my ex’s personal debt?
Yes. A properly drafted agreement will explicitly state that you are not responsible for your spouse’s personal debts or tax liabilities, protecting your corporate assets from their creditors.
What if my spouse co-signed the commercial lease?
If your spouse is a personal guarantor on your restaurant’s commercial lease, a marriage contract should include a clause detailing how they will be indemnified (protected) or removed from the lease if the marriage ends.
Can I force my spouse to sell their shares back to me?
Yes. If you both own shares in the family restaurant, your marriage contract (often paired with a Unanimous Shareholder Agreement) can include a “buy-sell” provision. This forces them to sell their shares back to you at a pre-determined formula if you divorce.
Do we need to update the contract if we open a second location?
It is highly recommended. While a strong initial contract should cover future business growth, executing a brief addendum when opening a new location in Mississauga or Sudbury ensures there is no legal ambiguity regarding the new assets.
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