The short answer Buying a restaurant can mean buying the building, buying the business, taking over a lease, or a combination, and each is priced and financed differently. Before you buy, inspect the hood, grease trap and kitchen systems, confirm parking and zoning, and plan for licensing: Colorado retail food licenses do not transfer, and liquor licenses need local and state approval for a new owner. SBA 7(a) and 504 loans often fit, with terms that vary by lender.
Building, business or lease: what is for sale?
- The building only. You buy the real estate, often a former restaurant with kitchen infrastructure in place. You bring your own concept.
- The business only. You buy the operating restaurant (name, recipes, equipment, staff, customers) and take over or sign a new lease with the landlord.
- Building and business together. The owner-operator sells both. The price has to be split between real estate, equipment and the business, and each piece is valued differently.
If you are buying the business in a leased space, the lease is one of the most valuable assets you are acquiring. Review the remaining term, renewal options, rent increases, assignment rules and who maintains the kitchen systems. Our tenant representation service and lease checklist cover that side.
What should you inspect in the kitchen?
Kitchen infrastructure is expensive to install and is often what makes a second-generation restaurant space valuable. Have qualified contractors inspect:
- Hood and exhaust. Size, condition, fire suppression system and inspection tags, and whether it serves the cooking line you plan.
- Grease trap or interceptor. Size, location, pumping records and what the local sewer provider requires.
- Walk-in coolers and freezers. Age, compressors and refrigeration service history.
- Gas, electrical and water heating. Capacity for your equipment, not only the seller's.
- Plumbing and floor drains. Sewer line condition, often checked with a camera.
Also inspect the roof (rooftop units and exhaust fans are common leak points), HVAC and restrooms, including accessibility.
Which licenses and permits do you need?
Food license. According to the Colorado Department of Public Health and Environment, retail food licenses are tied to the current owner and location and are non-transferable. A new owner gets a sales tax license and then applies for a new retail food license through the local public health agency. If you change the layout, menu or equipment, plan review may be required first.
Liquor license. Colorado retail liquor licenses require approval from the local licensing authority and the state Liquor and Tobacco Enforcement Division, and local approval comes first. A change of ownership needs its own application. Ask the local clerk about timing and put license approval into your contract timeline.
Zoning and building permits. Confirm the restaurant use is allowed and legally established, and check for open permits or code issues with the city or county.
Is there enough parking?
Parking can limit seating, hours and future changes. Count spaces, check any shared parking agreements with neighbors, and ask the planning department what the code requires if you add seating, a patio or a bar.
Can you buy a restaurant with an SBA loan?
Often, if you will operate it. An SBA 7(a) can combine real estate, business acquisition, equipment and working capital in one loan. An SBA 504 finances real estate and long-lived equipment, with about 10 percent down for a general-purpose building and typically 15 percent if the lender treats the property as special-purpose or the business is a startup. This is general information, not a loan offer; rates and terms vary by lender. See our SBA owner-user page and the 504 vs. 7(a) comparison.
Restaurant due diligence checklist
- Three years of tax returns, profit and loss statements and sales tax filings
- Point-of-sale reports by month, with food, alcohol and catering separated
- Equipment list with age and owned vs. leased status
- Hood, fire suppression, grease trap and refrigeration inspections
- Roof, HVAC, plumbing and sewer line inspection
- Retail food license requirements with the local public health agency
- Liquor license transfer process with the local licensing authority
- Zoning, parking and open permit review
- Lease review if the business is in leased space
- Title, survey and what conveys (name, recipes, website, phone number)
How Goff CRE Group helps
Goff CRE Group, brokered by Nassar Realty, represents restaurant operators buying property, and tenants leasing it. We help you decide between buying and leasing, separate real estate from business value, set a due diligence period that covers kitchen inspections and licensing, and coordinate your lender, inspectors, title company and attorney through closing. Alex Goff is licensed in Colorado. More on our buyer representation, or see other business properties.
