How to buy a restaurant in New Brunswick: licences, ownership rules and what transfers

Buying a restaurant in New Brunswick means dealing with two separate provincial regimes. The Food Premises Regulation, made under the Public Health Act, governs the licence to operate a food premises. The Liquor Control Act, administered by the Minister, governs any liquor licence. Each treats a change of owner differently, and neither lets a buyer simply step into the seller’s position. The order of the steps matters, because a closing that triggers a forfeiture can leave the restaurant without a licence on the day the buyer takes over. This guide sets out what those two enactments say, and covers New Brunswick only.

Who regulates a restaurant in New Brunswick

The Food Premises Regulation, number 2009-138 under the Public Health Act, sets out how a licence to operate a food premises is applied for and kept. Liquor is a separate matter. The Government of New Brunswick says a dining-room licence is required for selling liquor in public places such as bars, restaurants or pubs that sell food. A restaurant that sells liquor therefore needs a liquor licence in addition to any licence it holds to operate a food premises. Check which of the two the seller actually holds, and in whose name, before discussing anything else.

The food premises licence does not transfer

Section 14 of the Regulation says a licence to operate a food premises is not transferable. A buyer of the assets therefore cannot take over the seller’s licence as part of the purchase. The buyer applies for a licence of their own. Section 6(1) sets out what an application must provide, including the mailing address of the food premises and the Service New Brunswick property identification number of the parcel. Ask the seller for the current licence and recent inspection reports, and confirm with the province what the buyer must file and when.

Selling shares does not avoid the question

The Regulation’s non-transfer rule is written about the licence, not about the structure of the deal. A share purchase leaves the licensee the same company, and section 14 does not say how a change in who owns that company is treated. Do not assume a share deal solves it. Put the question to the province in writing before the purchase agreement is signed, and ask a lawyer how the agreement should deal with the answer. Section 13(1) adds that it is a term and condition of every licence that the licensee shall not alter or extend the food premises without first notifying the Minister and obtaining an approval, so a planned renovation is a second question to raise.

The liquor licence can be forfeited on a sale

Section 66(1) of New Brunswick’s Liquor Control Act says that, subject to the section, a licence is a licence only to the person named in it and for the premises mentioned in it, and remains valid only as long as that person continues to be the true owner or lessee of the premises and the true owner or operator of the business, subject to paragraph (b), which requires a licensee carrying on business in premises it does not own or lease to continue to have the written permission of the true owner or, for a public place, of the authority having jurisdiction. Under section 66(2), and subject to subsections (3) and (4), a licence becomes forfeited and void if the licensee, by sale of shares or otherwise, sells, transfers, assigns or conveys more than the interest in the business set by that subsection. The same subsection also covers the licensee’s death before the licence expires and dispossession by bankruptcy or operation of law. Under subsection (3), where the licensee notifies the Minister in writing of an intention to discontinue the business, the Minister may cancel the licence as of the date of discontinuance the licensee indicates. Read the whole section, not this summary.

Notice and the six-month permission

Under section 66(2.1), where a licensee, by sale of shares or otherwise, sells, transfers, assigns or conveys more than the interest set by that subsection, the licensee and the person who acquires the interest shall immediately notify the Minister. Under section 66(4), the Minister may, if it seems proper, give written permission for a person who appears to be entitled as assignee, purchaser or trustee in bankruptcy, or otherwise by operation of law, to carry on the business under the licence in the specified premises. That permission cannot extend beyond six months from the event that would cause the forfeiture, and it entitles the person only to the benefit of the licence on the permission’s terms. Under section 66(5), and subject to subsection (6), a person claiming the benefit of a licence under subsection (4) may, within the six months, apply to the Minister for a licence for the same or other premises, and the Minister shall consider it in the same manner as a first-time application.

What to ask the seller for

Request the following, and confirm each against the province’s own records where you can:

• The current food premises licence and the most recent inspection reports, so the buyer knows what the premises is licensed for.
• The liquor licence, with the licensee’s name and the terms and conditions it carries.
• The corporate records showing who holds the interest in the business, so that any transfer past the Liquor Control Act’s change-of-interest line can be identified.
• Any correspondence with the Minister about permissions, conditions or notices.
• The lease and the list of permits and licences the business relies on, which BDC lists among the items to review in due diligence.

For the national picture, see buying a restaurant in Canada, and browse restaurants for sale or restaurants for sale in New Brunswick.