What should I ask about a restaurant’s gift card balances before buying?

Start by asking how cards are sold and tracked. Are they sold through the till, a separate system or a third party? Can the seller produce a report of outstanding balances, with dates sold and redemption history? A restaurant with no clear record is hard to value, and a guest with a card still expects it to work.

Then ask how the money was treated. Cash received for gift cards is not the same as sales earned from meals, and your accountant can explain how it should show in the books. If the seller counted card sales as regular income, the earnings may look better than they are.

Think about who stands behind the cards after the sale. If you honour them, you serve meals without receiving cash. Many buyers ask for an adjustment so the seller covers the outstanding balances. Your lawyer can draft that, and the rules for expiry and unclaimed balances can vary, so ask what applies. Finally, plan how to treat guests. Keep honouring older cards, tell guests nothing changes, and avoid cutting off cards on the day you take over. The goodwill is worth more than a small saving.

Key takeaways

• Ask for a report of outstanding balances with dates and redemption history.
• Check whether card sales were counted as regular income.
• Agree in writing who covers balances after closing, and keep honouring them.