Selling your cafe or restaurant is not just about finding the right buyer—it’s about ensuring the process goes smoothly, especially during due diligence. Once you’ve accepted an offer, the buyer will want to examine your business closely to ensure it’s a solid investment. Providing accurate and comprehensive information can build trust with the buyer, speed up the sale, and potentially avoid last-minute negotiations or complications.
Here’s a complete checklist of information you’ll need to supply during the due diligence period, broken down into manageable sections.
1. Financial Documents
Strong financial records are the backbone of your hospitality business sale. Buyers want to ensure your business is profitable and stable.
- Tax Returns: Have at least 2–3 years’ worth of tax returns on hand. These provide an overarching view of your business’s financial health.
- Profit and Loss Statements: Detailed P&L statements for the past 2–3 years help buyers assess consistent trends in revenue and expenses.
- Sales Breakdown Reports: Provide reports that separate sales by categories such as food, beverages, or other services. This helps buyers understand your revenue streams.
- Equipment List with Valuations: Include a comprehensive list of key equipment, noting their estimated market value and condition. This reassures buyers about the tangible assets they are acquiring.
Tip: Organize these documents into an easy-to-digest format. Buyers appreciate simplicity and transparency.
2. Legal and Operational Documents
No buyer wants unexpected legal or operational hurdles after taking over. Ensure everything is in perfect order.
- Business Registration and Incorporation Documents: Provide proof of the business’s legal entity and registration status.
- Licenses and Permits: Include your food service license, liquor license, and any other necessary council or state permits.
- Lease Agreement and Lease Disclosure Statement: Offer a detailed copy of your property lease along with amendments, particularly if the buyer intends to operate from the same location.
- Health Inspection Reports: Supply recent health inspection results to showcase compliance with safety standards.
- Franchise Agreement: If you’re part of a franchise, buyers will need every detail of the agreement.
Tip: An organised file of these documents not only demonstrates credibility but makes the buyer feel reassured about your operational foundation.
3. Intellectual Property
Your intellectual property highlights the uniqueness of your hospitality business and its branding.
- Trademarks and Copyrights: Provide proof of any registered trademarks, such as your logo or business name.
- Training Manuals & Operations Procedures: These highlight your business structure and can make the transition seamless for the new owner.
- Website & Social Media Accounts: Don’t forget to include domain registration confirmation and ensure ownership transferability. Ownership of active social media accounts with an established audience is a valuable asset.
Tip: Streamlining intellectual property handovers reflects the professionalism of your business setup.
4. Marketing and Sales
Restaurants and cafes thrive on relationships, which is why buyers care about your customer-facing assets.
- Gift Voucher Records: If you sell vouchers, detail any outstanding unredeemed amounts.
- Loyalty Program Details: Provide insights on loyalty programs, including customer participation and how these campaigns perform.
Tip: Highlight the strength of your customer retention initiatives in these materials to increase buyer confidence.
5. Human Resources
Your team is likely integral to your business’s success. Providing thorough HR details conveys transparency and builds confidence.
- Redacted Employee List: Share details on staff roles, tenure, and salaries. Ensure names and other personal information are redacted.
- Sample Employment Contracts: Include templates for key roles. If employees are staying on post-sale, this provides clarity for everyone.
- Leave Balance Report: Share accrued leave balances to prepare for future payouts.
- Training Programs & Materials: Showcase how you’ve invested in your staff, which translates to long-term value for buyers.
Tip: Demonstrating a highly engaged team can enhance your business’s perceived value.
6. Operational Systems
Your day-to-day systems are the engines of your business—and buyers will want to see proof they are modernised and efficient.
- Point of Sale (POS) System: Provide details about your POS system, including software and any associated transaction fees.
- Reservation Management: Document your reservation process if you use platforms like OpenTable or other booking systems.
- Security Systems: Include information about surveillance setups and maintenance schedules.
Tip: Smooth operational systems can serve as a selling point to buyers, especially those unfamiliar with the industry.
7. Property and Equipment
Buyers must understand the physical layout and condition of your business’s assets.
- Floor Plans & Seating Charts: Offer accurate layouts to help the buyer visualize the setup.
- Maintenance Records: Show documentation related to repairs for equipment or the premises.
- Utility Costs: Share detailed reports on electricity, water, and gas usage as they reflect overhead costs.
Tip: Buyers appreciate evidence that equipment and facilities have been well maintained.
8. Miscellaneous
Finally, here are additional items that are often overlooked but immensely useful during due diligence.
- Standard Operating Procedures (SOPs): Share SOPs to demonstrate operational consistency.
- Food & Beverage Menus + Pricing: Include menus with recipe cards and menu costings (if possible).
- Premises Photos: High-quality photos of your space and equipment can provide clarity, especially for international buyers.
- Pending Legal Disputes: If there are any unresolved legal or financial issues, be upfront about them.
Tip: Sellers who are transparent about their business’s challenges build greater trust with buyers.
Set Yourself Up for Success
Completing due diligence is key to a smooth transition for both you and the buyer. By proactively organising and presenting these documents, you’ll build trust and increase the likelihood of closing the deal on favourable terms.
Need help navigating this critical step of your business sale? Get in touch with our team today for personalised guidance.
