Buying a Restaurant or Café in the UK

The lease is often the most valuable asset. Check the unexpired term, rent review pattern, break clauses, and any dilapidations liability. A short lease with an aggressive review schedule can sink an otherwise profitable site.

• Minimum 5 years secure on completion, ideally 10+
• Rent as a percentage of turnover (under 10% is healthy in most regions)
• Permitted user clauses that allow your intended concept
• Landlord consent terms for assignment when you eventually sell

Premises licences in England and Wales transfer with the business under the Licensing Act 2003, but you must apply within 28 days of completion. Check the existing licence conditions, hours, and any review history with the local authority.

• Premises licence (alcohol, late hours, regulated entertainment)
• Food business registration with the local authority
• Food Hygiene Rating, the current score is public and affects bookings
• Pavement licence for outside seating if relevant

Under TUPE 2006, staff transfer with the business on their existing terms. You inherit employment liabilities including holiday pay, length of service and any outstanding grievances. Get a full employee list, contracts and a payroll history before exchange.

• Gross profit margin below 65% on food or 70% on drinks
• Heavy reliance on the owner working unpaid hours
• Falling covers per week over the last 12 months
• Outstanding HMRC debt (PAYE or VAT)
• Negative Tripadvisor or Google trend that does not match the seller's narrative