Should I renovate my restaurant before I sell it?

A restaurant that looks tired can make a buyer nervous, so the urge to renovate is natural. The harder question is whose taste the renovation serves. Many people who buy a restaurant already have a menu, a style and a budget in mind, and they may strip out what you just built. Start by sorting what a visit shows from what a buyer would redo anyway.

Repairs a buyer notices first

Walk through as a buyer would. Look at the dining room, the washrooms, the back door, the walk-in and the kitchen floor. Broken hinges, stained ceiling tiles, a dripping tap and a greasy hood send a message about how the whole place is run. These fixes are modest and they help any buyer, whatever concept follows you.

Why a full fit-out may not carry over

A new fit-out reflects your taste, not necessarily the next owner’s. If the buyer wants a different cuisine, a different layout or a different feel, your work may be torn out. Ask whether the lease obliges the next tenant to keep or restore anything, and whether the landlord must approve changes. Your lawyer can read those terms for you.

Equipment that works matters more

A kitchen where everything runs on the day of the walk-through is persuasive. Service the hood, the fryers, the refrigeration and the dish machine, and keep the records. A buyer’s inspector will ask what is owned, what is leased and what is near the end of its life.

Ask before you spend

Talk to a broker who knows restaurants, and to your accountant about how any spending is treated in the books. Some owners offer the buyer a credit toward changes instead of doing the work first. This page on investing before you sell takes the wider question further.