Hospitality and restaurants
Restaurants and hospitality businesses are bought and sold constantly in BC, and many are sold for less than the owner invested. The reasons are predictable: thin documented margins, a lease that caps the value and many first-time buyers. We help owners present defensible earnings and help buyers avoid paying for a dream.
How the money works
- Buyers pay for documented earnings, which are often lower than real earnings
- The lease, its term and its assignment clause set the ceiling on value
- Liquor and food licences transfer under rules that affect timing and conditions
- Fit-out and equipment cost far more than they resell for
The moves we make
- Normalise and document earnings so a buyer's accountant believes the number
- Negotiate lease extensions and assignment consent with the landlord before listing
- Map licence transfers early so closing is not delayed
- Qualify buyers for experience and financing before they see the books
What a restaurant is really worth
A buyer values a restaurant on normalised earnings after paying the owner for the hours they work, and on the likelihood those earnings continue with a new face in the room. Where earnings cannot be documented, buyers fall back to asset value: the fit-out, the equipment and the lease, which is usually a fraction of what was spent. Owners who want a business price need clean books, point-of-sale records that tie to deposits and a team that runs service without them.
The lease is the business
Most hospitality value sits in the right to occupy a good location on good terms. A buyer will not pay for a business with a lease that ends soon, cannot be assigned or carries a rent that resets without a cap. Before listing, we review the lease with your lawyer and approach the landlord for an extension, options or consent to assignment. For hotels and motels where the owner holds the property, we value the operation and the real estate separately.
Buying hospitality in BC
First-time buyers are drawn to restaurants and cafes, and many underestimate the hours and the margin. We set criteria, rebuild the earnings from the records, inspect the lease and licences, model the debt service and plan the transition, in which the seller introduces regulars, suppliers and staff to the buyer. Buyers who are newcomers to Canada work alongside a regulated immigration consultant or lawyer for anything related to status. Liquor and food licensing questions go to the relevant authority and your lawyer.
Questions from hospitality and restaurants owners
Why do restaurants sell for less than the owner invested?
Because buyers pay for documented earnings and the lease, not for the cost of the fit-out. A restaurant with proven profit and a long lease sells as a business. One without sells as assets.
Can I sell a restaurant with a liquor licence?
Yes, and the licence transfer runs on its own timeline with its own conditions. We map the process early with your lawyer so the sale is not held up at closing.
How do buyers finance a restaurant purchase?
Usually with their own equity and a vendor take-back from the seller. Bank financing is available for well-documented businesses with experienced buyers and a secure lease.
Start with a confidential conversation.
Tell Ali where the business is and what you want to happen next. You leave with a straight read on value, timing and the two or three moves that matter, whether or not we work together.