Independent restaurants, cafés, bars, and franchise locations across Ontario — a restaurant deal is really several parallel transfers happening at once: the liquor licence, the lease, the health-unit inspection. Each runs on its own clock, and all of them race the same closing date.
Part of Food & Hospitality — see the family overview.
Every figure below is a typical Canadian deal-market pattern, not a valuation — use it to sanity-check what you're being told.
| Metric | Typical benchmark | Use this to |
|---|---|---|
| Format drives the number |
| Sanity-check where a listed restaurant should sit before you get attached to the asking number. |
| Valuation convention | Priced as a multiple of verified seller's discretionary earnings for owner-run locations, not gross revenue or the number on the listing.† | Apply the multiple to earnings you've verified yourself — not the number in the listing. |
| Rent-to-sales ratio | Occupancy cost — rent plus related charges — as a share of gross sales is the single most-watched ratio in a restaurant resale.† | Flag a lease worth protecting, or a rent that's already eating the upside. |
| Prime cost | Food cost plus labour cost, combined, as a share of sales — the standard test of whether a restaurant's margins can support its asking price.† | Test whether the margins you're shown can actually support the price being asked. |
| Deposit norms | A deposit tied to the purchase price is customary at the time the offer is signed, well before financing is arranged.† | Budget the cash you need at offer stage, before financing is even discussed. |
The lease is usually the single biggest value lever in a restaurant deal — the term remaining, renewal options, and the rent-to-sales ratio move price more than almost any other factor.
A below-market rent is a real, valuable asset — but it is only protected, or lost, through the specific wording of the lease assignment, not by assumption.
Earnings claims from a listing or a broker get verified against your own review of the books during diligence, not taken on faith.
The same sequence underlies almost every restaurant deal — what changes from deal to deal is how long each step takes, and which one becomes the bottleneck.
Reaching an agreement
The offer sets price and key terms — for a restaurant it should build in the conditions that actually matter from day one, not just financing.
usually 1–2 weeks†The APS fixes price, structure — asset or share — and closing date, plus the reps, warranties, and holdbacks that protect you if diligence turns up something different than promised.
1–3 weeks to negotiate†AGCO liquor licence, Lease, Health-unit inspection, Equipment & PPSA, Staff (ESA) all start moving at once, on separate clocks — this is usually where restaurant deals are won or lost.
often the critical path†Getting to closing
Corporate, PPSA lien, and litigation searches confirm what you're actually buying; we chase down licence standing and records the seller doesn't always have to hand.
2–4 weeks, in parallel†Funds, keys, and signed documents change hands, alongside any inventory count and interim authorizations that bridge the gap until final transfers are confirmed.
1 day, once conditions are met†We track final licence confirmation and the staff transition through to completion — nothing is left for you to chase once the deal is done.
1–2 week tail†This is the first real decision in almost every restaurant deal — and it changes what you're buying, what you're taking on, and how it's taxed.
| Question | Asset purchase | Share purchase |
|---|---|---|
| What you buy | The restaurant's assets — equipment, inventory, lease, recipes, goodwill, and the name. | The shares of the corporation itself — everything it owns, and everything it owes. |
| Seller's liabilities | Generally stay behind with the seller's existing corporation. | Generally come with the company, known and unknown. |
| The liquor sales licence | Handled as a transfer application, or a new licence, bridged by an interim authorization to keep the business serving. | Stays with the corporation, but the regulator must be notified of the change in ownership. |
| The lease | Needs the landlord's written consent to assign — often the pacing item for the whole closing. | Usually stays in place, unless the lease has its own change-of-control clause. |
| Tax angle | Buyer gets a stepped-up cost base on the assets purchased; an HST election may apply to the sale. | Seller may access the lifetime capital gains exemption on qualifying shares. |
| Staff | Employment continuity rules typically apply to how staff carry forward. | Employment generally continues uninterrupted — the employer doesn't change. |
| Typical use in a restaurant deal | The default for most single-location restaurant deals. | Less common — sometimes preferred where a hard-to-reassign licence or lease favours keeping the corporation intact. |
The restaurant's assets — equipment, inventory, lease, recipes, goodwill, and the name.
The shares of the corporation itself — everything it owns, and everything it owes.
Generally stay behind with the seller's existing corporation.
Generally come with the company, known and unknown.
Handled as a transfer application, or a new licence, bridged by an interim authorization to keep the business serving.
Stays with the corporation, but the regulator must be notified of the change in ownership.
Needs the landlord's written consent to assign — often the pacing item for the whole closing.
Usually stays in place, unless the lease has its own change-of-control clause.
Buyer gets a stepped-up cost base on the assets purchased; an HST election may apply to the sale.
Seller may access the lifetime capital gains exemption on qualifying shares.
Employment continuity rules typically apply to how staff carry forward.
Employment generally continues uninterrupted — the employer doesn't change.
The default for most single-location restaurant deals.
Less common — sometimes preferred where a hard-to-reassign licence or lease favours keeping the corporation intact.
We tell you which structure fits — before you sign anything.
Different lists depending on which side of the deal you're on — both matter for how smoothly closing goes.
No open-ended hourly surprises — the cost is confirmed in writing before any work begins.
| Type of work | Fee | How it's confirmed |
|---|---|---|
| Straightforward purchase or sale | Starting from $3,388.87 Our charges · taxes included | Confirmed in writing once we see the agreement. |
| Larger or more complex deal | Quoted to scope | Short call → fixed written quote before any work begins. |
| Searches, filings & third-party fees | At cost | Itemized on your invoice, not marked up. |
A café or takeout spot, a single franchise unit, or a family restaurant with a straightforward lease — one buyer, one seller.
Start my file →A restaurant group or multi-location deal, a licensed venue bundled with real estate, or a franchisor whose consent and a new agreement are part of the deal.
Book a consultation →Not sure which you are? That's our job to figure out, not yours. As a rough guide, most deals under a couple of million dollars are the first kind — above that, you're usually in Mergers & Acquisitions territory.
†Typical patterns across Canadian deals — not a quote or advice; every deal is confirmed on its own facts.
Often, yes — an interim authorization can let the premises keep serving under temporary authority while the full transfer application works through the regulator. What applies to your specific licence and timeline gets confirmed before closing, not assumed.
That's negotiated, not fixed — reasonable consent fees and administrative costs are commonly split between the parties in the assignment terms. A landlord generally can't refuse consent without a reasonable basis, though what counts as reasonable depends on how the lease itself is worded.
On most restaurant asset sales, continuity rules can carry over an employee's length of service and shape what happens if a role changes or ends. Your exposure depends on your specific staff and how the transition is handled — that gets walked through for your deal before you commit to a structure.
It changes what you're taking on. The corporation's history and its existing liabilities come along with the shares, while the licence and lease generally stay attached rather than being re-applied for. Share-sale requests are usually about protecting a hard-to-reassign licence or lease, and that reasoning gets tested before you agree to it.
Most restaurant deals count and value saleable inventory on closing day, added on top of the agreed structure. The method — who counts, how spoilage is handled, what's excluded — gets agreed in the purchase agreement itself, not improvised at the till on the day.
| Resource | Official link |
|---|---|
| AGCO — liquor sales licensing Licence transfers and interim authorizations | Visit www.agco.ca |
| Find your local public health unit Food-premises inspections and change-of-operator notices | Visit www.ontario.ca |
| Employment Standards Act — general guide Staff continuity on a sale | Visit www.ontario.ca |
| Personal Property Security Registration (PPSR) Equipment lien searches | Visit www.ontario.ca |
Where we close restaurant deals
Tell us about your restaurant deal — we'll point you the right way and confirm the cost in writing before any work begins.