By RA partner, LINK

Selling a café, restaurant or bar means handing over more than the keys. You’re letting go of something you’ve put years of hard work into. Getting the sale right is what makes for a smooth handover, a strong result and a clean start to whatever comes next. That’s why it matters who you have in your corner.

So, the question worth asking early is:

Who needs to be in the room before the first buyer is?

A business broker, a lawyer and an accountant act for you. A business sale asks a lot of you at once: keeping your business running, answering a buyer’s questions, learning how to manage and maximise the outcome of your sale, while also coming to terms with handing over something you’ve poured years into.

Managing and operating your business is your greatest strength. Selling it is ours. Working with the right specialists means every part of your sale has someone experienced looking after it. It means you can stay focused on the business while it goes to market positioned to achieve the very best of what it’s worth. Each adviser takes part of the load, and together they move the sale towards settlement, and you towards whatever comes next.

What does each adviser do in a hospitality sale?

Your broker handles price, buyers and confidentiality. Your lawyer handles the legal terms and the lease. Your accountant makes the numbers hold up under scrutiny. Hospitality adds its own moving parts: the liquor licence doesn’t transfer to the buyer and the food control plan usually doesn’t either, the landlord has to approve the lease, and a buyer and their bank will go through your accounts line by line. A finance broker acts for the buyer, and when a bank says no, they can often find another lender, which keeps your sale on track.

Adviser	Who they act for	The hospitality-specific job
Business broker	You	Pricing against hospitality comparables, screening buyers, keeping the sale confidential, preparing the sale and purchase agreement with realistic timeframes for every condition
Lawyer	You	Reviewing the sale and purchase agreement, making sure its conditions are met on time, and handling the lease assignment and landlord consent
Accountant	You	Normalised accounts, clean cash and wage records, your tax position on the sale
Finance broker	The buyer	Securing the buyer’s lending, which keeps your finance condition on track

What does a hospitality broker do for a seller?

A hospitality broker specialises in selling cafés, restaurants and bars. They know the industry inside out, and they know how to position a venue in the market to get you the best possible result.

Several of LINK’s specialist hospitality brokers have owned and run cafés, restaurants and bars themselves. They know what it’s like to be in your shoes: the long hours, the staffing, the tight margins, and what it takes to let go of a business you’ve built.

Here’s what that means for your sale:

• Pricing grounded in real sales data and experience. Your broker prices your business through a Business Value Appraisal, using LINK’s proprietary Valu.LINK tool alongside their industry background and training as a business broker. They know how lease terms, trading consistency and owner dependency can move that price.
• Positioning that speaks to hospitality buyers. They know what buyers in this industry look for, and they present your business’s strengths in a way that prompts those buyers to act.
• Confidentiality from the first conversation. Without care and discretion, word that a hospitality business is for sale can travel fast. One whisper in the kitchen can reach your suppliers and carry across the bar to your regulars. That uncertainty can unsettle your staff, some of whom may start looking elsewhere, and give competitors a chance to swoop in on your customers, taking a large part of your business’s value with them. Your broker manages confidentiality at every stage of the sale, controlling what’s shared, when and with whom, so your team and regulars hear about it when you’re ready to tell them.
• Your time spent only on serious buyers. Your broker fields the enquiries and filters out the time-wasters. Every person who enquires about your confidentially marketed business is screened for suitability. Your broker will ensure they sign a confidentiality agreement before any sensitive information is disclosed to them, and their capacity to proceed is checked before you meet them.
• A smooth licence handover. Your broker will put the buyer in touch with a liquor licence consultant to apply for the temporary authority. The buyer needs to register their own food control plan before settlement.
• The freedom to keep trading. With the sale in hand, you stay focused on your business. A business that keeps trading well while it’s on the market gives buyers more confidence in the price.
• Keeping your sale on track and moving. A broker’s role is also to ensure that sufficient time is allocated in any sale document to allow all clauses and conditions to be completed. Invariably they will try to keep the timelines tight to ensure an efficient process, but not so tight as to be unrealistic. Your broker coordinates your lawyer, your accountant and the buyer’s finance broker, so every adviser works to the same timeline. In addition to standard clauses such as due diligence, finance and landlord’s consent, there are other conditions that may relate to the sale. These can include:
  • franchisor approval
  • liquor licence (temporary authority) applications. A temporary authority can take around three weeks to secure, so it’s important that an adequate timeframe is allowed.
  • in more complex sales, key employee clauses, vendor funding clauses, specific restraint of trade requirements and lease extensions.

What does your lawyer handle in a hospitality sale?

Your lawyer protects your interests from the first draft of the agreement through to settlement, making sure the deal agreed commercially is the deal documented legally.

Your lawyer will:

• Check your house is in order before a buyer appears. That covers lease terms and renewal rights, licences, employment agreements, supplier contracts and any registered securities. Problems found early can be fixed quietly. Problems found by the buyer’s lawyer during due diligence become leverage to reduce the price.
• Review the sale and purchase agreement. Once an offer is accepted, your lawyer reviews the sale and purchase agreement. They keep the warranties you give limited and accurate, since each one is a potential post-settlement claim. They also tighten conditions such as finance, landlord approval and due diligence so they cannot become a free exit for the buyer, and address restraint of trade, stock and handover obligations.
• Secure the lease assignment. Lease assignment is often the critical issue, particularly in hospitality, where the lease can be the most valuable asset. Your lawyer works with the landlord’s lawyer to secure consent and, where possible, release you from ongoing liability.
• Manage disclosure through due diligence. This protects you from later misrepresentation claims.
• Handle settlement. At settlement, they confirm funds, apportion rent, rates and wages, and discharge securities.

What does your accountant handle in a hospitality sale?

Your accountant makes your numbers easy to trust. In hospitality, where buyers look hardest at cash, wages and seasonality, that’s what protects your price through due diligence and gives a buyer’s bank the confidence to lend.

Your accountant will:

• Prepare normalised accounts. They strip out personal costs and one-off items so a buyer sees what the business really earns. That’s the figure your hospitality business’s value is built on, so it needs to hold up.
• Get your cash and wage records in order. Hospitality buyers go straight to cash takings, wage costs and seasonal swings, because a buyer can only pay for the profit you can prove. Records that reconcile cleanly answer their questions before they slow the sale down.
• Pull together two to three years of trading history. Consistent, verifiable records give a buyer’s bank something to lend against, which keeps the finance condition on track.
• Back every figure in due diligence. A buyer’s accountant will test the numbers, and anything unsupported gets stripped out, taking value with it. Well-prepared accounts keep your price intact.
• Advise on your tax position. They’ll help you understand the tax implications of the sale, so you know what you’re likely to walk away with.

What does a finance broker do in a hospitality sale?

Many sales hinge on the buyer’s finance coming through. A finance broker helps make sure it does, which keeps your sale moving towards settlement.

A finance broker will:

• Secure lending for the buyer. They match the buyer with a lender that suits the deal, so the finance condition in your agreement has the best chance of being met on time.
• Help find solutions if one funding pathway doesn’t work. If a lender declines, they can look to other lenders and finance options. That can keep alive a sale that might otherwise fall over, and save you starting again with a new buyer.
• Present your figures to lenders. They’ll use the same numbers your accountant prepares. Tidy, consistent figures make the lender’s decision easier and give the buyer a clearer path through the finance condition.

Your broker can tell you early which buyers have finance lined up, so your time goes into the buyers most likely to get to settlement.

How does the right team change the outcome of a sale?

The right team catches problems while they’re still easy to fix. Each adviser covers a different pressure point in a hospitality sale: price, buyers and the licence handover; the agreement and the lease; and the accounts. Your broker liaises with everyone to keep everything running smoothly, so you’re not chasing four people while managing your business.

That changes how the sale plays out:

• Issues are resolved before a buyer finds them, so your price is far more likely to hold.
• Conditions are set with realistic timeframes, so the deal keeps moving.
• You stay focused on trading, so the business keeps performing while it’s on the market.
• You go into each stage knowing what’s coming and who’s handling it.

What should you do before you list?

• Talk to a hospitality broker about your plans, and bring in your accountant and a lawyer experienced in business sales early.
• Pull together your employment agreements, supplier contracts and details of any registered securities so your lawyer can review them early.
• Check your liquor licence’s expiry date and renewal status. The buyer trades on it under a temporary authority, so it needs to stay current through the handover.
• Check that your venue’s current use, including any outdoor or extended areas, has the council consents it needs.
• Have your accountant normalise the last two to three years of accounts where you can.
• Find your lease and read the assignment clause.
• Check the lease term, and whether it carries a demolition or redevelopment clause.

If you’re thinking about selling, talk to a LINK broker who specialises in hospitality. They’ll help you bring the right team together from the start, so you go to market with every adviser in place, every part of the sale covered, and your business positioned for the very best result.

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FAQ

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Find out more about the Restaurant Association and LINK’s partnership here. 

*This article is general information only and is not legal advice. LINK business brokers are licensed under the Real Estate Agents Act 2008 and are not able to provide legal advice. Every sale is different, so talk to your lawyer about how the lease and sale conditions apply to your business, and to your accountant about the accounting and tax implications.