Why buy an existing restaurant instead of starting one
A trading restaurant hands you a customer base, a team that already works together, a kitchen that already meets the rules, and turnover you can measure across several financial years. That is the real difference with a start-up: you are buying a track record, not a hypothesis.
The risk doesn't vanish, it moves. It's no longer about whether demand exists, but about the quality of what you're buying. Which is exactly why the analysis has to happen before you sign.
There's another practical argument: banks lend far more readily against a plan to take over a profitable business than against an opening with no history. A file backed by three years of accounts reassures a credit committee.
- Cash coming in from the first service, with no dead months of building work
- Equipment already installed: kitchen fit-out often costs €40,000 to €80,000 to buy new
- Alcohol licence and permits already granted
- Suppliers, negotiated rates and ordering routines handed over
Starting versus buying a traditional restaurant: what actually differs
The question comes up every time a prospective operator compares two listings. Starting up means writing your menu on a blank page. Buying means inheriting a reputation, good or bad. Both routes work; they simply don't demand the same effort or the same cash up front.
| Criterion | Opening a restaurant | Buying an existing business |
|---|---|---|
| Start-up budget | New fit-out and equipment, €150,000 and up | Price of the business, often 60 to 100% of annual turnover |
| Time to first cover | 6 to 12 months | A few weeks after completion |
| Financial visibility | Theoretical forecast | Real accounts over 3 financial years |
| Freedom of concept | Total | Constrained by the existing clientele |
| Staff | Everyone to be recruited | Contracts transfer automatically |
One factor matters more than the rest: your experience of the restaurant trade. If it's thin, buying gives you a structure that already runs. If you have a precise concept in mind, starting up leaves your hands free.
Assessing the financial health of the restaurant for sale
Ask for the last three sets of accounts, the profit and loss statements and the VAT returns. VAT is the best referee: it cross-checks declared turnover month by month and exposes the real seasonality.
Then you need to restate the figures. The seller's own pay, their vehicles, personal expenses, or a rent kept artificially low because they own the walls all distort the profitability on paper. Rebuild the result as if you were already in charge.
Watch three ratios: food cost (28 to 35% in a traditional restaurant), total payroll including contributions (35 to 45%) and rent, which should stay under 10% of turnover. Above that, the business gets fragile. For more on these benchmarks, see our article on the margins and key ratios of a profitable restaurant.
Out of ten acquisition files, the asking price rarely comes down to the décor: it comes down to the rent, the margin on drinks and the number of covers served at lunch during the week.
Finally, check the drinks side of the sales. A well-run wine list and alcoholic drinks offer delivers 70 to 80% gross margin. That's often where the gap opens up between two businesses with identical turnover.
What a restaurant business actually includes
A restaurant business is not a building. It's a bundle of intangible and tangible assets you buy as a whole: goodwill, the trading name, the right to the lease, licences, equipment, furniture. The walls themselves almost always belong to a third-party landlord.
Location and catchment area
Go and count the footfall past the door at three different times. A restaurant can sit on a busy street and live off lunch alone if the catchment area is made up of offices that empty at 7pm. Even a rough-and-ready market study, done over two days on site, spares you that kind of nasty surprise.
The commercial lease in force
Read the commercial lease line by line. Time remaining, review date, deposit amount, permitted-use clause: if the lease doesn't allow eating in, or bans extraction, your operation is dead in the water. Also check who pays for major works and the property tax.
Equipment and kit
Take the inventory with a refrigeration engineer. A cold room or a range at the end of its life means €15,000 to budget for in year one. Check the extraction hood, the grease trap and compliance with food hygiene rules too: inspectors can turn up the day after you move in.
Licences and contracts
The alcohol licence transfers with the business but has to be declared to the local council. Go through the contracts that come with it: maintenance, card terminal, delivery platforms, equipment rental. Some roll over automatically for 36 months.
Staff and customers: the two assets that never show up in the accounts
The staff transfer automatically, along with their length of service, accrued holiday and any live disputes. Ask for the contracts, the staff register and the latest payroll journal. A sous-chef with fifteen years in the place is genuine know-how; it's also a heavy severance bill if you want to change the team.
Customers are measured by average spend, the share of regulars and the online reviews from the last twelve months. Have lunch there twice without announcing yourself. You'll see the service as it really is, not as the seller describes it.
Plenty of buyers use the change of name to refresh the menu. It's the logical moment to move to a QR code menu: you can correct prices and dishes without reprinting, during the weeks when everything is still shifting.
Buying a restaurant with no experience: what you need in place
No qualification is required to buy a restaurant business and run it. Two obligations remain: the operating licence, obtained by taking a course of 20 hours (or 6 hours if you have ten years in the trade), and the 14-hour HACCP food hygiene training for at least one person on the premises.
The real requirement lies elsewhere: being able to hold a margin and a rota. If you're coming from another world, build in a handover period with the seller, two to four weeks written into the sale agreement. It costs little and it saves your first season.
- Operating licence required to serve alcohol
- HACCP food hygiene training
- Compliant price display and allergen information
- Opening declaration to the local council and the food safety authority
On that last point the rules are precise and actively checked: our guide to allergen information in restaurants sets out what you need to be able to produce from your very first service.
Funding, price and securing the purchase
A restaurant business typically changes hands at 60 to 100% of annual turnover including VAT, or 2 to 4 times EBITDA. A city-centre bar-restaurant with a full alcohol licence goes higher; the type of location accounts for the whole gap between two comparable restaurants for sale.
On funding, expect the bank to want 30% of your own money, topped up with a loan over seven years, an unsecured start-up loan and sometimes vendor finance. Buying with no cash of your own is still possible through a management lease: you run the place, you pay a royalty, you buy later.
To find businesses for sale, work several channels at once: specialist listing sites, chambers of commerce, business transfer networks and word of mouth from suppliers. The best deals aren't always advertised.
Finally, the sale agreement has to go through a professional. Holding the price in escrow during the creditors' objection period, mandatory disclosures, joint tax liability: just as important, make sure you secure a warranty against liabilities if you're buying the company's shares rather than the business itself. A legal audit costing €2,000 to €4,000 spares you a €50,000 dispute.