By Dominique Maddox, CBI, CFE | EATS Broker – Dallas Restaurant Broker
Most people who want to buy a restaurant have no idea where to actually start. They find a listing online, get excited about the concept, and then hit a wall, no signed non-disclosure agreement, no financials, no idea what questions to ask, and no broker walking them through the process. That is where deals fall apart before they even begin.
The Dallas Restaurant Broker has been helping buyers purchase restaurants across Texas, from Dallas and Fort Worth to Houston, Austin, and San Antonio, and nationwide since 2010. As a Certified Business Intermediary (CBI) and Certified Franchise Executive (CFE), EATS Broker founder Dominique Maddox, CBI, CFE has sat on both sides of hundreds of closing tables. This guide walks you through exactly how to buy a restaurant in Texas and nationwide the right way, from your first inquiry to the day you get the keys.
Step 1: Inquire and Sign a Confidentiality Agreement
The first step in buying a restaurant is also the one most buyers skip: signing a Confidentiality Agreement (CA), also called a Non-Disclosure Agreement (NDA).
When you see a restaurant for sale in Dallas, Houston, or anywhere else in Texas, you will not get the name, address, or financials until you sign one. This is standard practice in the industry and it exists to protect the seller, their employees, their customers, and the business itself do not know it is for sale. Respecting this process is how you earn access to real information.
At EATS Broker, once your Confidentiality Agreement is signed and received proof of funds for most listings, we send you the Confidential Information Memorandum (CIM), a detailed package that includes the Profit and Loss statements, lease information, equipment list, and operational overview. This is your first real inside look at the business.
Restaurant Broker Tip:
Buyers who sign the NDA and follow up within 24–48 hours move to the front of the line. Strong listings in the Dallas–Fort Worth and Houston markets receive multiple inquiries. Speed and professionalism signal to the broker and the seller that you are serious.
Step 2: Review the Financials and Analyze the Opportunity
Once you have the CIM in hand, your job is to study the numbers before you ever set foot in the restaurant. Most buyers make the mistake of falling in love with the concept before they understand the cash flow. Do not do that.
The document to focus on is the Profit and Loss statement (P&L) and Tax Returns. In most cases Restaurant Brokers will not provide the Tax Returns until the buyer goes into the due diligence period.
Our Restaurant Brokerage will provide a short version of tax returns that includes page 1 and statement page that includes the additional write-offs. We will cover up the seller’s EIN number until the due diligence period starts.
You want to see at least two to three years of P&Ls, and you want to understand the Seller’s Discretionary Earnings (SDE) which is the true cash flow available to a new owner after adding back owner salary, personal expenses run through the business, depreciation, and any one-time costs. That number is what actually tells you what the business is worth and what kind of return you can expect.
Key things to look for in your financial review:
- Consistent or growing revenue over 2–3 years
- SDE that supports the asking price (typical restaurant multiples run 1.5x to 3x SDE)
- Labor and food cost percentages within healthy industry ranges
- Any large one-time expenses that are not recurring
- POS (point-of-sale) sales reports to validate the P&L
If the numbers hold up, you move to the next step. If something does not add up, ask your broker before you schedule a meeting. A good restaurant broker in Texas will help you understand what you are seeing — and what it means for the deal.
Restaurant Broker Tip: Before a buyer makes an offer they can request additional financial information that doesn’t include the tax returns. The Dallas Restaurant Broker usually has buyers requests
-POS Sales Numbers
-Sales Tax Filings – Monthly and Quarterly
-Credit Card Statements
-Franchise Royalty Report
Step 3: Get Pre-Qualified Before You Meet the Seller
Before any buyer meets a seller at EATS Broker, we require financial pre-qualification. This is not a formality, it is a protection for everyone involved.
You will need to provide one of the following: a recent bank statement, a 401(k) statement, or a letter from your banker confirming you have access to funds. For franchise resales which make up about 60%-70% of our closed transactions at EATS Broker, this step is non-negotiable regardless of asking price.
During pre-qualification, I also need you to answer four questions that every serious buyer must have clear answers to:
| 1. | Where are you located? (Can you realistically operate or commute to this restaurant?) |
| 2. | How are you going to operate the business? (Owner-operator, semi-absentee, or investor?) |
| 3. | How are you paying for the business? (Cash, SBA loan, seller financing, or a combination?) |
| 4. | Have you operated a restaurant before, or will you need franchise training? |
If you cannot answer these four questions with confidence, you are not ready to sit across from a seller. That is not a criticism, it is a coaching moment. A strong broker will help you think through each one before the meeting.
Step 4: The Buyer-Seller Meeting
When you have reviewed the financials, passed pre-qualification, and your broker has confirmed you are a fit for the listing, it is time to meet the seller. This meeting happens either in-person at the restaurant or via Zoom.
Come prepared. This meeting is not a tour, it is a decision-making conversation. Bring the questions you need answered to write an offer. The seller’s job is to answer your questions directly. Your broker’s job is to manage the flow of the meeting and keep both parties focused on the deal.
After the meeting, your broker will follow up with you separately to discuss the offer, and with the seller to share your feedback. The goal coming out of this meeting is a signed Asset Purchase Agreement (APA).
Restaurant Broker Tip:
In the Dallas, Houston, and Austin markets, sellers who receive a well-prepared buyer often move quickly. Come to the meeting with your questions written down, your financing path confirmed, and your timeline clear. Indecision after a strong meeting can cost you the deal to another buyer.
Step 5: Making an Offer and Entering Due Diligence
Once you are ready to move forward, your broker will prepare the Asset Purchase Agreement (APA), the formal offer that outlines the purchase price, terms, escrow deposit, and contingencies. At EATS Broker, we draft the APA for you. You choose the closing attorney.
Standard escrow is $10,000 or more, deposited with the closing attorney within three business days of the signed agreement. For larger transactions, escrow may be higher.
Once the APA is signed by both parties, due diligence begins. This is when you receive the tax returns, verify the P&L, inspect the equipment, and dig into anything that was not covered in the CIM. Due diligence is your opportunity to confirm that what was represented is what you are buying. Take it seriously.
During this phase, several things happen in parallel:
- Your broker contacts the landlord to begin the lease assignment process
- If you are buying a franchise, the franchisor is notified and your application process begins
- Your SBA lender or bank begins underwriting if you are financing the purchase
- You work with an attorney to review the lease terms and any personal guarantee obligations
Step 6: Setting Up Your Business and Closing
Before you close, you need to have your business infrastructure in place. This means:
- Establishing a new legal entity (LLC or Corporation) to operate the restaurant
- Applying for or confirming your EIN with the IRS
- Opening a new business bank account
- Acquiring any insurance required by the franchise agreement, lease, or your lender
- Scheduling utility transfers to your name
On closing day, the wire goes to the closing attorney. You sign the Bill of Sale, the Settlement Statement, and the Non-Compete Agreement. A food inventory count typically happens within 24 hours of closing time. You pay for whatever physical inventory is on hand at the time of transfer.
Then the keys are yours. Getting to this moment is what every step in this process is designed for.
A Note on Financing Your Restaurant Purchase in Texas
Many first-time buyers in Texas wonder whether they need all cash to buy a restaurant. The answer is no but you do need a clear financing plan before you start.
The most common financing options for restaurant purchases in Texas include the SBA 7(a) loan, which is the most widely used loan for small business acquisitions in Dallas, Houston, and Austin, as well as conventional bank loans, seller financing (in some cases), and combinations of cash plus lending. We work with SBA-preferred lenders across Texas and can make introductions when the time is right.
Most lenders want to see a minimum of 10–20% down, two years of business tax returns from the seller, and evidence of the buyer’s management experience. For franchise resales, the franchisor’s approval process runs parallel to the loan timeline, so starting early on both fronts matters.
Why Work with EATS Broker to Buy a Restaurant in Texas
Most business brokers handle every type of business — a laundromat today, a dental practice tomorrow, a restaurant next week. At EATS Broker, we work exclusively in the restaurant industry. That means when you call us, you are talking to someone who understands food cost percentages, lease assignment challenges, franchise transfer timelines, and what a fair SDE multiple looks like in the current Texas market.
I hold both the Certified Business Intermediary (CBI) designation from the International Business Brokers Association and the Certified Franchise Executive (CFE) designation from the International Franchise Association — making me one of the few restaurant brokers in the country with both credentials. I am a licensed Real Estate Broker in Texas and Georgia.
Whether you are looking for a restaurant for sale in Dallas, searching for a franchise restaurant for sale in Houston, or exploring independent concepts in Austin or San Antonio, we can help you find the right opportunity and guide you through every step of the process — at no cost to you as a buyer.
Buying a restaurant in Texas is one of the biggest financial decisions you will make. The buyers who succeed are the ones who approach it like a business acquisition — with due diligence, a clear financing plan, and a broker who specializes in the space. The ones who struggle are the ones who move too fast on emotion and too slow on process.
I have walked hundreds of buyers through this process. I can walk you through it too.
Ready to Buy a Restaurant in Texas?
Whether you have been searching for months or this is your first step, EATS Broker is here to help you find the right restaurant, evaluate the deal, and get to the closing table.
✅ Browse Restaurants for Sale → www.EATSbroker.com/buying-a-restaurant/
✅ Get a Complimentary Restaurant Valuation → www.EATSbroker.com/restaurant-valuations/
📞 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, Fort Worth, San Antonio, and nationwide.