A restaurant buyer checklist covers whether the liquor licence and food premises licence can transfer, the health inspection history, the age and condition of kitchen equipment, the lease term and rent structure, staff food-safety certifications, and third-party delivery and supplier arrangements — the items that determine whether a restaurant can keep operating the day ownership changes.
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This checklist covers what to verify before buying a Canadian restaurant, bar or food-service business. Restaurants carry a concentration of licensing, equipment and lease risk that most other small businesses do not, so several of these items need to start well before closing, not the week before the doors are expected to reopen under new ownership.
Confirm the licences that keep the doors open
Confirm the status of the liquor sales licence and start the transfer process with the provincial regulator as early as possibleIn Ontario, the Alcohol and Gaming Commission of Ontario treats a change of ownership as a formal transfer with its own conditions; other provinces run their own equivalent process, and a gap here can mean opening without the ability to serve alcohol.
Pull the health inspection history and ask directly about any past closures, infractions or conditional passesA pattern of repeat infractions on the same issue — pest control, food storage temperatures — points to a management problem, not a one-off, and it becomes the new owner’s reputation to fix.
Confirm the food premises licence is current and understand what re-inspection a change of ownership triggersA food premises licence is generally tied to the specific location and operator, and a new owner typically needs their own inspection and approval before opening under new ownership.
Inspect the kitchen and check the equipment history
Physically inspect major kitchen equipment — walk-in coolers, hoods, fryers, ranges — and request service and maintenance recordsA walk-in cooler or hood system with no documented maintenance is one of the more expensive surprises a new owner can inherit, often within the first year.
Confirm the exhaust hood and grease trap are on a documented cleaning schedule that meets fire and municipal codeAn undocumented or lapsed cleaning schedule is both a fire-safety risk and something an inspector or the landlord can flag immediately after the sale.
Confirm which equipment is owned outright and which is leased, financed or tied to a supplier placement agreementDraft beer systems, POS terminals and some coolers are often placed by a supplier under a separate agreement rather than owned by the business, and those obligations do not automatically transfer on the buyer’s terms.
Review the lease and the location economics
Confirm the remaining lease term, whether the landlord will consent to assignment, and whether percentage rent appliesA short remaining term with an uncooperative landlord can mean the business is worth far less than the sale price implies, since the location is what much of a restaurant’s value depends on.
Confirm the permitted-use clause covers the current concept and anything the buyer plans to change, including patio or delivery useA narrow permitted-use clause can block a planned menu change, a liquor service expansion or a patio a buyer is counting on to grow revenue.
Check staffing, sales reporting and supplier terms
Confirm which staff hold current Smart Serve or provincial-equivalent alcohol-service certification and food handler certificationServing alcohol without properly certified staff is a compliance gap that can put the newly transferred liquor licence at risk almost immediately.
Reconcile POS sales data against bank deposits and reported tips over several months, not a single periodA restaurant is a largely cash- and card-mixed business, and a gap between what the POS reports and what actually lands in the bank account is worth investigating before relying on reported revenue.
Ask for copies of any exclusive beverage supply or franchise agreements and confirm what obligations transfer with the businessAn exclusive supply agreement with a beverage distributor can restrict pricing or product choices in ways a new owner may not expect going in.
Review third-party delivery platform agreements, including commission terms and account ownership, and confirm who controls the account after closingA delivery platform account tied to the seller’s personal login, rather than the business, can leave a new owner locked out of an established online ordering presence.
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.