Buying an existing restaurant can be a cheat code and one of the fastest ways to enter the restaurant industry. The most common mistake for new restaurant owners is not planning for an exit strategy at the start, and having a buyer’s checklist.
As a Dallas, Texas, restaurant broker, Dominique Maddox, CBI, CFE, works with buyers every day —first-time operators, corporate refugees, and experienced restaurateurs—who want to minimize risk while maximizing upside. This checklist outlines what buyers care about most when purchasing a restaurant and how working with a specialized restaurant broker simplifies the process.
The Restaurant Broker at EATS Broker provides a Buyer checklist of what you should know:
1. Furniture, Fixtures, and Equipment (FF&E)
When buying an existing restaurant, you are purchasing far more than a name and menu. Buyers want clarity and confidence around the physical assets. You should know:
Condition:
- Is the walk-in freezer holding temp?
- Is the grease trap up to code?
- Does the hood system work?
- Is the equipment in good working order?
Paperwork
- You need a complete, itemized list of every piece of Furniture, Fixtures, and Equipment.
- What equipment is leased, and what is the cost monthly?
Compliance
- Will it pass health, fire, and code inspections?
- Can you get a liquor license?
- What is the true market value of the equipment?
A restaurant broker coordinates FF&E inventories, helps identify obsolete or leased equipment, and ensures the assets align with the purchase price, especially important in asset-heavy restaurant transactions called an Asset Sale.
2. The Lease: The Most Critical Document in the Deal
In the restaurant world, you don’t own the business if you don’t control the dirt. A restaurant can be profitable yet unsellable due to a poor lease and terms. Buyers should insist on reviewing the entire lease before moving forward.
Key lease concerns include:
Total Cost: What is the base rent vs. the NNN/CAM (insurance, taxes, maintenance)?
Terms and Renewals : When does the lease expire? Are there options to renew, and at what rate?
The Fine Print: Look for “kick-out” or demolition clauses that could end your business prematurely.
Special provisions like demolition clauses, personal guarantees, or major repair obligations.
An experienced restaurant broker works alongside landlords and attorneys to identify red flags early and negotiate terms that protect resale value.
Restaurant Broker Tip: “Most deals fall apart because of ‘surprises.’ The goal of this checklist isn’t just to find problems—it’s to solve them before they reach the closing table. Never fall in love with a kitchen until you’ve fallen in love with the lease and the tax returns.
3. The Financials: “Show me the Money.”
Don’t take the seller’s word for it. Trust, but verify.
- Tax Records: State Sales Tax Returns and Schedule C (or 1120) tax returns.
- Profit and Loss statements (historical and current)
- POS Sales Numbers
- Sales Tax Filings
- Credit Card Statements
- Bank Statements (occasionally)
- 3rd party delivery statements
- Sales mix and operating metrics
- Vendor purchase history
What makes the money? Buyers analyze food costs, labor margins, and sales breakdowns (e.g., how many pizzas are actually moving?).
ROI & Living Wage: A healthy deal should generally provide a living wage after you’ve paid your debt service.
4. The Human Element: Training & Non-Competes
Protecting Your Investment: The Non-Compete
The last thing you want is the former owner opening a competing shop three blocks away a month after closing. A standard Covenant Not to Compete usually spans five years and a five-mile radius. This ensures the “goodwill” you paid for stays with you.
Most restaurant buyers, especially first-time owners, require training. Franchise brands offer scheduled training for new franchisees to help ensure their success, but non-franchise restaurants do not.
Buyers typically expect the seller or manager to provide at least 2 weeks of hands-on training. The buyer will need Operational guidance during the transition period, including the POS Sales system, employee scheduling, inventory management, vendor introductions, and more. Clear training terms protect both buyer and seller and reduce post-closing disputes.
5. Leverage and Financing Structure
All restaurant purchases involve leverage between the seller and the buyer. Who has the upper hand depends on the deal structure and the restaurant’s strength. Cash is king, and buyers will be aggressive with their offers if no financing is required.
Typical buyer expectations:
- 10%–20% down payment
- SBA or conventional financing
- Seller financing as a gap-closer
- Rollovers as Business Start-ups (ROBS) 401(k)
Restaurant Broker Tip: Seller financing often signals confidence in the business and reassures cautious buyers.
6. Franchise or Licensing Agreements (If Applicable)
For franchise restaurants, buyers must fully understand the franchisor relationship.
They want to review:
- Franchise term and expiration
- Royalty and advertising fees
- Transfer and approval fees
- Required training and costs
- Ongoing franchisor support
- Restaurant upgrades required, including signage, furniture, cooking equipment, and exterior building design.
A restaurant broker coordinates with franchisors to ensure compliance and smooth approvals.
7. Issues That Can Kill a Deal
Buyers will dig for the things sellers might not want to mention. These items don’t necessarily stop a sale—but surprises will.
These items don’t necessarily stop a sale—but surprises will.
Buyers need upfront disclosure on:
- Health department compliance and inspection reports
- Equipment leases and assumptions
- UCC Liens, loans, or secured obligations
- Outstanding state or federal taxes
Addressing these early keeps buyers engaged and prevents last-minute fatigue.
Why Work With a Restaurant Broker?
Navigating this checklist alone is a full-time job. At EATS Broker, we simplify the process by acting as the buffer and the expert. We know how to spot red flags in a P&L and how to negotiate lease terms that protect the tenant, not just the landlord.
Whether you are looking in Dallas or across the United States, our goal is to ensure that when you get the keys, you are stepping into a platform for success, not a pit of liabilities.
Ready to start your search or need a professional valuation on a listing you’ve found? Contact Dominique Maddox at EATS Broker today to schedule a consultation.