By Dominique Maddox, CBI, CFE | EATS Broker – Dallas Restaurant Broker
Steps to Buying a Restaurant
Buying a restaurant isn’t like buying a house, and treating it that way is the fastest way to overpay or walk into a lease you can’t get out of. Here’s the process I walk buyers through, start to finish.
1. Get clear on your buy box. Before you look at a single listing, decide on concept type (QSR, fast-casual, full-service, bar), target price range, geography, and whether you want an existing brand or a franchise resale. Buyers who skip this step waste months touring restaurants that were never a fit.
2. Review listings and sign an NDA. Serious sellers won’t release financials until you’ve signed a non-disclosure agreement. This protects the seller’s staff and customers from finding out the business is for sale before it’s final.
3. Review the financial package. You’ll want at least two to three years of tax returns, monthly profit and loss statements, and POS sales reports going back 12 months minimum. This is where you calculate seller’s discretionary earnings (SDE) — essentially the true cash flow available to an owner-operator after adding back things like owner salary, personal expenses run through the business, and one-time costs.
4. Tour the restaurant and evaluate operations. Look past the dining room. Check the kitchen equipment condition, walk-in coolers, hood systems, and ask about deferred maintenance. I’ve seen deals die over a walk-in cooler that needed $18,000 in repairs nobody disclosed upfront.
5. Make an offer. This typically comes in the form of a Letter of Intent (LOI) outlining price, terms, and a due diligence period, followed by a formal Asset Purchase Agreement (APA) once both sides agree.
6. Complete due diligence. This is your window to verify everything — financials, lease terms, permits, equipment condition, and any pending litigation.
7. Secure financing and close. Once financing is locked and the lease is assigned or transferred, you close and take possession.
Restaurant Broker Tip: Never skip due diligence to “move fast” because a seller says another buyer is interested. In 15+ years around Texas restaurant deals, I’ve watched that pressure tactic cost buyers far more than the few days it takes to verify the numbers.
Buy a RestaurantBuy a Restaurant
This is the question everyone leads with, and the honest answer is: it depends heavily on whether you’re buying an existing operating restaurant or building one from scratch.
Buying an existing restaurant in Texas typically ranges from $150,000 to $600,000 for independent concepts, with most deals in the Dallas, Houston, and Austin markets landing between $200,000 and $400,000. Price is usually calculated as a multiple of SDE — commonly 2x to 3x annual SDE for independent restaurants, though this varies based on lease terms, growth trend, and how turnkey the operation is.
Building a restaurant from scratch in Texas often runs $500,000 to $1.5 million or more once you factor in buildout, equipment, permitting, and pre-opening labor — and that’s before you’ve served a single customer or built any brand recognition.
This is exactly why so many first-time buyers in the Texas restaurant market choose to buy an existing, cash-flowing business instead. You’re paying for proven revenue, an established customer base, trained staff, and equipment that’s already in place — instead of gambling on whether a brand-new concept finds its footing.
Beyond the purchase price, budget for:
- Working capital (3-6 months of operating expenses as a cushion)
- Legal and accounting fees for the transaction
- Lease assignment or transfer fees
- Liquor license transfer costs, if applicable
- POS system updates or rebranding costs
Restaurant Broker Tip: Buyers who go in with zero working capital cushion are the ones who call me six months later in trouble — not because the restaurant was a bad deal, but because they had nothing left after closing to survive a slow month.
SBA Financing for Restaurant Buyers
Most restaurant purchases in Texas are financed, at least in part, through an SBA 7(a) loan — the most common financing vehicle for buying an existing restaurant. These loans are attractive because they typically require lower down payments than conventional bank financing, often in the 10% to 20% range, and can be amortized over 10 years for business acquisitions.
Texas has an active network of SBA-preferred lenders who understand restaurant deals specifically — which matters, because not every lender wants to touch food service. Restaurants carry a different risk profile than, say, a landscaping company or a laundromat, and lenders who don’t specialize in food service tend to move slower or decline outright.
To qualify for SBA financing, lenders will generally want to see:
- Strong, verifiable financials from the seller (this is why clean books matter so much in valuation)
- A buyer with relevant industry or management experience, or a solid plan to bring in experienced management
- A lease with enough remaining term to cover the loan period, or the ability to negotiate a lease extension
- A reasonable personal credit profile and some liquid capital of your own
Working with a broker who already has relationships with Texas SBA lenders can shave weeks off your financing timeline, because we can flag deal-breakers — like a lease with only two years left — before you fall in love with a restaurant that won’t get approved.
Restaurant Broker Tip: Get pre-qualified with an SBA lender before you start seriously touring restaurants. It tells sellers you’re a real buyer, and it keeps you from wasting time on deals outside your actual buying power.
Restaurant BrokerRestaurant Broker vs. Buying FSBO
I’m going to be straight with you, because that’s the only way I know how to run this business: buying “For Sale By Owner” isn’t automatically a bad idea, but it puts all the risk on you.
When a restaurant is listed FSBO, there’s no third party verifying that the numbers the seller hands you are accurate, no one negotiating on your behalf, and often no one guiding you through the lease assignment process — which, in Texas, can be one of the trickiest parts of a restaurant deal. Landlords have real leverage here, and a lease assignment that isn’t handled correctly can leave you personally liable in ways you didn’t expect.
A restaurant broker earns their fee by doing the parts of this deal that buyers consistently underestimate:
- Verifying financials against tax returns, not just what the seller tells you
- Structuring the deal — asset purchase vs. stock purchase, allocation of purchase price, contingencies
- Negotiating on your behalf without burning the relationship with the seller before you’ve even closed
- Managing the lease assignment conversation with the landlord
- Coordinating with your SBA lender, attorney, and accountant so nothing falls through the cracks at closing
At EATS Broker, we work both sides of the table across Dallas, Houston, and Austin — meaning we’ve already vetted the sellers we represent, and we bring buyers listings that have real, defensible financials behind them. That’s a very different starting point than scrolling classifieds and hoping for the best.
The Bottom Line
Buying a restaurant in Texas can be one of the smartest moves you make — if you go in with the right process, the right financing partner, and someone in your corner who’s done this before. The buyers I see succeed aren’t the ones who move the fastest. They’re the ones who did their homework, verified the numbers, and didn’t skip steps just because they were excited.
If you’re serious about buying, the first move isn’t touring restaurants — it’s getting a clear picture of what’s actually available and what you can realistically afford to buy.
Ready to find the right restaurant to buy in Texas?
Whether you’re a first-time buyer or you’re looking to add a second location, the right deal starts with the right guidance.
Browse Restaurants for Sale in Texas → www.EATSbroker.com/restaurants-for-sale
Book a Confidential Consultation with Dominique Maddox, CBI, CFE → www.EATSbroker.com/contact-us
EATS Broker serves restaurant buyers and sellers across Dallas, Houston, Austin, and nationwide.