Restaurant Due Diligence: What BC Buyers Should Review

Understand what is actually being sold

Clarify whether the opportunity is an asset sale, a share sale, a franchise resale or an assignment of an existing lease. The structure changes the documents, approvals and risks involved.

Confirm which equipment, trade names, recipes, digital accounts, phone numbers, inventory and supplier relationships are included. Do not assume that every visible asset belongs to the seller.

• Asset and equipment list
• Lease and renewal rights
• Franchise or brand agreements
• Licences and permits
• Inventory treatment at completion

Test the quality of reported sales

Compare point-of-sale reports, bank deposits, tax filings, delivery-platform statements and financial statements over consistent periods. Seasonal sales should be viewed across enough months to avoid drawing conclusions from a short spike.

Look beyond gross revenue. Food cost, labour, delivery commissions, rent, utilities, repairs and owner compensation determine the operating result a buyer may actually inherit.

Inspect the premises and equipment

Commercial kitchens can require expensive repairs or upgrades. A qualified inspection can help identify the condition of refrigeration, ventilation, fire-suppression systems, plumbing, electrical service and major cooking equipment.

Confirm the permitted use and the status of relevant licences directly with the appropriate authorities. Any liquor licence, patio permission or food-service approval should be treated as subject to regulatory requirements and transfer rules.

Plan the transition

Ask what training the seller will provide, which employees are expected to remain, how suppliers will be introduced and whether recipes or operating procedures are documented.

A good transition plan also covers customer communications, digital listings, delivery accounts, deposits, gift cards and access to business systems. Your offer can make satisfactory verification and approvals conditions of the transaction.