Sell a restaurant in Texas
Most restaurant buyers start with the lease, not the menu. The location, the rent, and the time left on the lease decide whether a buyer can finance the purchase and earn a return. After that come the permits, the kitchen, and the staff.
This page covers what buyers look at when you sell a restaurant in Texas, the records to prepare, and how alcohol and food permits work when ownership changes.
What restaurant buyers look at first
Restaurant buyers check the things that can stop a deal before they study the earnings.
Lease terms
Remaining term, renewal options, rent and increases, and whether the landlord must consent to an assignment.
Liquor permit
Whether the restaurant sells alcohol, what share of sales it represents, and the buyer's path to its own permit.
Kitchen equipment
Condition and ownership of the hood system, walk ins, and cooking line, and what is leased.
Staff
Kitchen leadership, front of house managers, and who would stay after a change in ownership.
Food and labor costs
Prime costs as a share of sales and how they are tracked.
Sales channels
Dine in, takeout, delivery apps, and catering, and the fees each one carries.
Records to prepare for a restaurant sale
Restaurant buyers verify sales from more than one source. The general document list is on our how to sell a business guide.
Point of sale reports
Sales by month, day part, and category for several years, which buyers compare to tax returns and bank deposits.
Sales tax and mixed beverage filings
State filings give buyers an independent check on reported sales.
The lease and all amendments
Including any personal guarantee and the assignment clause.
Equipment list
Each major item with age, condition, and whether it is owned or leased.
Health inspection history
Recent inspection reports and how any violations were resolved.
Vendor and delivery app agreements
Pricing terms, fees, and any agreements a buyer would need to replace.
How restaurant earnings are measured
Single location restaurants run by an owner are almost always measured on SDE. Groups with several locations, a general manager at each, and a central office are more often measured on EBITDA.
Buyers look closely at cash handling, comps, and owner meals, because restaurant add backs are easy to claim and hard to prove. Sales that cannot be traced to the point of sale system, bank deposits, and tax filings are usually left out of the buyer's numbers.
Restaurant add backs that need documentation
- Owner salary above the cost of a general manager
- Owner and family meals recorded as comps
- One time repairs such as a hood replacement or a walk in compressor
- Personal expenses paid through the business
- Pre opening or remodel costs that will not recur
Texas alcohol and food permits in a restaurant sale
The Texas Alcoholic Beverage Commission (TABC) states that if the ownership of a business changes hands, the new owner must apply for their own license or permit, and that the license or permit cannot be transferred to the new owner. TABC also lists deadlines for notifying the agency of changes to ownership or principal parties.
Food permits are local in most of Texas. The Department of State Health Services (DSHS) regulates retail food establishments in areas that are not permitted and inspected by a local health agency. Under DSHS jurisdiction, food service establishments, with some exemptions, must employ a Certified Food Manager. Restaurants permitted by a city or county health department should confirm that department's rules for a change of ownership. Build the permit timeline into the closing date.
Keeping a restaurant sale confidential
Restaurant staff and regulars notice everything.
- Buyers visit as customers first. Walkthroughs of the kitchen happen before opening or after close.
- Managers and chefs hear about the sale late, usually once the buyer is ready to discuss their roles.
- Vendors and delivery partners are told only when contracts need to be changed.
- The blind profile describes the concept and area in general terms so regulars cannot identify the restaurant.
Pricing a restaurant
Restaurant value rests on documented earnings and on a lease the buyer can live with. A short remaining term or rent that is high relative to sales can limit what a buyer and lender will support, whatever the earnings.
Forge prepares a broker opinion of value from the recast earnings, the condition of the assets, the risks a buyer would take on, and market evidence. A broker opinion of value is not a certified appraisal and is not a substitute for one. If a lender, a partner, or a court needs a formal appraisal, that is a separate engagement with a credentialed appraiser. Our business valuation page explains how the opinion is built.
Questions from restaurant owners
Does my liquor permit transfer when I sell my restaurant?
No. TABC states that a license or permit cannot be transferred to a new owner, and the new owner must apply for their own. Plan the buyer's application into the closing timeline.
What if my lease is close to expiring?
Talk to the landlord before the restaurant goes to market. Buyers and lenders need enough remaining term, including renewal options, to justify the purchase. An extension or new lease negotiated in advance can make the restaurant much easier to sell.
Can I sell a restaurant that is not making money?
Sometimes, as an asset sale where the buyer pays mainly for the location, equipment, and build out. The price then reflects those assets rather than earnings.
How do buyers verify restaurant sales?
They compare point of sale reports, bank deposits, sales tax filings, and tax returns. Sales that do not appear in those records are usually given no value.
Should I tell my staff I am selling the restaurant?
Not until a buyer is committed. Most owners tell managers and key kitchen staff near closing, often with the buyer present.
Talk to Forge about selling your restaurant
Inquiries are confidential. Financial documents come later, after a confidentiality agreement is in place.
Related pages
Thinking about selling your restaurant?
Start with a confidential conversation about your lease, your permits, and your timing.