Selling a Restaurant | 6 minute read

Negotiating the Best Deal When Selling Your Restaurant

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Whether you’re trying to sell your restaurant because you want to make a profit or because your business is not going well, the negotiation process is one of the crucial steps in selling a restaurant.

Considering sale negotiations can be intense and tiresome, here are 11 tips for getting the maximum selling price for your restaurant. They’ll help you offer a fair price to interested parties and draft the most favourable restaurant purchase agreement once you lock in the purchase price.


Know Your Restaurant’s Value

First and foremost, it’s essential to know your restaurant’s value. Before setting the asking price, you must do your due diligence, considering many factors. Calculate the value of your assets, space and parking lot, lease, financial statements, and other costs. Ensure you set a competitive yet realistic restaurant price.

Potential buyers will most likely ask you to justify your price, so equip yourself with evidence, facts, and relevant data to support your asking price.


Build Rapport

Good relationship and communication is the key to the negotiation process. As a restaurant owner, you need to build a positive relationship with potential restaurant buyers. Being transparent and open in the negotiations will make you more trustworthy. With better rapport, you’re more likely to close the best deal.

If your restaurant buyer is uncomfortable with you, they might consider opening escrow. However, if they open escrow, that will add to your costs.


Listen Actively and Address Buyer Concerns


Two women practicing the art of listening during a serious conversation at a cafe.


The most underestimated tool in negotiating the restaurant sale is listening. Listen to your buyers and understand what motivates them to buy a restaurant. You’ll gain valuable insights into what aspects they’re most interested in and what they expect from the purchase.

They will conduct their due diligence process and get a crystal-clear idea of how the transaction will look. It’s your job to address their concerns and show your commitment to reaching the best outcome.


Stay Informed

Being well-informed is essential to looking like a reliable restaurant seller. Follow the market trends, understand local regulations, and keep up with industry developments. Staying informed will help you reach the best purchase agreement.

Being informed and equipped with relevant business knowledge can help you better negotiate the sale price and other terms affecting the restaurant’s cost. Moreover, your potential restaurant buyers will appreciate your valuable insights during the talks to sell your establishment.


Stay Composed

Another vital tip to negotiate the best restaurant purchase agreement is to stay composed. Any emotional reaction can only drive potential purchasers away. For example, if a restaurant seller reacts harshly to the buyer’s proposal, the buyer is likelier to walk away.

Remind yourself not to take negotiations personally. Your goal is to sell a restaurant, so focus on that. Stay professional and composed. If you can’t leave emotions out of the negotiations, hire an escrow agent. That will make the transaction smoother and more professional.


Restaurant Sale Negotiation in Stages


Negotiators close the deal and toast with red wine, celebrating a moment together in a cozy setting.


Properly negotiating is the best way to stay composed and professional while arranging a restaurant sale. If you jump from one aspect to another, selling your restaurant will become overwhelming. Focusing on one aspect of the deal at a time will make the process easier to bear.

There are too many variables in the negotiation process. As an expert, take the lead and guide the conversation in the right direction.

Successful negotiations unfold in the following stages:

  1. DiscussionSchedule an informal meeting with your buyer to discuss their intent and learn what they expect from the sale.
  2. Due diligence – The buyer thoroughly examines the business, financing, and relevant documents.
  3. Price negotiations – Set your asking price, support it with data and relevant evidence, and set the payment terms.
  4. Purchase agreement – Draft a purchase agreement, outline the deal terms, the price, payment method, closing date, etc.
  5. Contract review – Leave room to negotiate further with the buyer. You may need to compromise on the cost or payment methods.
  6. Deal closing – Once both parties have agreed, the seller will transfer the ownership to the buyer and receive the agreed-upon payment. They can open escrow for the safe title and money handover to close the sale once both meet the deal terms.


Establish a BATNA

BATNA stands for Best Alternative to a Negotiated Agreement. This concept is helpful in negotiations if they fail. It’s a plan B in negotiations. A good BATNA for owners of restaurants is to consider other buyers, licensing their brand, rebranding, or partnerships.


Leverage Competing Offers

Restaurants present a lucrative business opportunity, so you’ll have multiple potential buyers. That puts you in an excellent position to create competition. You can make a sale with better terms and receive higher offers.

However, be wise and humble. Be careful not to overdo it and chase away a potential buyer.


Be Prepared to Compromise, Counteroffer, or Walk Away

Another tip is to be aware of your restaurant’s value. Be flexible and willing to make concessions, but also be clear on your non-negotiables. Evaluate any offer you get. Consider the terms and the buyer’s financial capability. If the offer is unsatisfactory, be prepared to make a counteroffer or continue discussions.

If negotiations don’t move in the right direction or the terms are unfavourable, be prepared to walk away. Showing your willingness to walk away can sometimes motivate the buyer to make a more attractive offer.

Therefore, show the willingness to compromise but know when to walk away.


Document Everything

Even though you want to be fair, you must protect yourself in case of disputes or misunderstandings. The restaurant is your property, and you want to make a fair sale.

We strongly suggest you document everything. Keep a record of all communication and agreements in writing. Save all the documents and reports. Having a paper trail is an excellent safety measure if you encounter issues along the way.


Consider Professional Advice



Selling a restaurant is exhausting, and understanding the legal considerations can be crucial. Negotiations can take a toll on you as a restaurant owner. Thus, to make the process smoother and avoid missing any critical factors in the negotiations, ask for professional help.

That can include business brokers, attorneys, or financial advisors specializing in restaurant sales. If the talks become overwhelming, hire a professional as a mediator or facilitator.




How important is it to maintain complete and accurate financial records when selling a restaurant?

Maintaining complete and accurate financial records is essential when selling a restaurant. It makes your business more attractive to potential buyers and ensures that your financial profile is in order.

How do I determine the right asking price for my restaurant?

Determining the right asking price for your restaurant requires careful consideration. While some use a simple formula of multiplying the annual profit by 3 to 5, other factors such as the current economy, the business’s establishment, inclusion of equipment, and community perception should also be considered. Various valuation methods can be utilized to determine the appropriate asking price.

What is escrow, and when do I open it?

Escrow is an agreement in which a third-party professional receives the money from the buyer and distributes it to the seller after certain conditions have been met. Escrow’s purpose is to protect both parties and come to the best possible arrangement.

Does my restaurant’s liquor license transfer to the new owner?

It depends. The liquor license can be transferred to your buyer when they purchase a restaurant if you, as a seller, give authorization and sign the required forms. Unless you do that, the new owner must get a new one from the licensing board.

How long do restaurant sale negotiations last?

The length of the negotiation process can vary depending on many factors. It can take anywhere from a few weeks to a few months. The process can last three to four weeks depending on how well you and your buyer agree on the terms and how willing you are to compromise.


Written by

Manoj Kukreja is a real estate expert and trusted guide in the pursuit of the perfect property. With a remarkable professional journey, Manoj began his career in major Canadian financial institutions, achieving the prestigious Certified Financial Planner designation in 2010. During this time, they earned recognition as one of Canada's top ten financial planners and also played a role in training industry peers. Manoj's extensive financial background now serves as a valuable asset in the real estate domain, ensuring clients make informed decisions during their property search.