What should I check before buying a deli?
Check four things a deli adds to an ordinary food shop: the slicers and display cases at the counter, who holds the house recipes, whether specialty supplier accounts will carry over, and whether the counter staff who know the regulars will stay. Then ask your lawyer about food-safety requirements.
A deli is more than a sandwich counter. Customers buy by weight, ask for a particular cut of meat or cheese, and often deal with the same person every week. That makes the business depend on equipment, recipes, supplier relationships and people in ways a plain lunch spot does not. Go through each of them with the seller before you form a view, and write down what you are told.
The counter and its equipment
Ask for service records on the slicers, scales and refrigerated display cases, and ask which of them are owned and which are leased or financed. Have an independent technician look at the cases and the cooling system, since a failed case in a busy week is costly. Ask how often the slicers are sharpened and cleaned, and who does it. This answer on sandwich shops covers the lunch side.
Recipes and house-made products
If the deli cures, smokes or prepares its own items, ask where the recipes are written down and who actually makes them. A recipe that lives in one cook’s head can leave with that cook. Ask whether the seller will teach you or your team, for how long, and whether that help can be written into the purchase agreement.
Suppliers and importers
Specialty cheeses, cured meats and imported grocery often come through accounts that were built over years. Ask for a list of suppliers, what each one provides, the terms and whether any account is exclusive or personal to the owner. Then ask each supplier, with the seller’s consent, whether it will keep supplying a new owner.
The people behind the counter
Regulars often come for the person who knows their order. Ask who they are, how long they have worked there and whether they know about the sale. Food-safety requirements for the premises are a question for your lawyer, and the lender will set its own terms.
Related reading
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Canadian Food Inspection AgencyGovernmentPreventive controls and preventive control plans: Requirements for food businesses in Canada
- 04Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
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