Taking over an existing restaurant, cafe, or bar can be an attractive entry into the hospitality industry. Compared to starting a new business, buyers benefit from existing infrastructure, established processes, and often a loyal customer base. At the same time, taking over a hospitality business entails specific risks and requirements.
In this article, we show what truly matters when buying a catering business – from legal foundations to economic factors. Basics at a glance – perfect for newcomers!
Why buy an existing business?
Buying an ongoing business offers several clear advantages:
- Quick market entry: An existing business already has equipment, permits, and structures.
- Established processes: Operations in the kitchen, service, and purchasing are usually well-rehearsed.
- Existing clientele: An existing customer base can facilitate the start.
👉 At the same time, an existing business also means inheriting existing problems – which is why a thorough examination is crucial.
Clarify legal foundations
A central point when buying a hospitality business is the legal requirements.
1. Business registration
Even when taking over, the business must be re-registered.
2. Restaurant license (Konzession)
For operating a restaurant – especially when serving alcohol – an official permit is required. The license is generally tied to the person and the business – it does not automatically transfer to the buyer.
3. Further official requirements
- Hygiene regulations (food law)
- Building and usage regulations
- Potentially, permits for outdoor seating
Review economic key figures
Perhaps the most important point when buying is the economic situation of the business.
1. Revenue and profit
- How high are the revenues really?
- Are there known seasonal fluctuations?
2. Cost structure
- Cost of goods sold
- Personnel costs
- Rent and ancillary costs
3. Review calculation
All presented figures should be comprehensible and verifiable by documents.
Analyze location and concept
The success of a catering business strongly depends on its location and concept.
1. Location
- Walk-in customers vs. target customers
- Competition in the vicinity
- Accessibility
2. Concept
- Is the offering still contemporary?
- Does it suit the local target group?
👉 A well-running business can fail if the concept and location no longer match. Especially with new ideas, you should realistically weigh how well they will be received at an established location. See Location Analysis.
Evaluate equipment and condition
When buying, you generally also take over the furnishings and technology.
1. Kitchen equipment
- Condition of the appliances
- Maintenance and age
2. Guest room & furniture
- Quality and modernity
- Necessary renovations
3. Technology & system
- POS system (legally compliant?)
- Reservation systems
👉 Investment needs after purchase should definitely be planned for.
Carefully check contracts
A common mistake lies in insufficient review of existing contracts.
1. Lease agreement
- Term and notice periods
- Rent amount
2. Supply contracts
- Ties to specific suppliers
- Price structures
3. Employment contracts
- Existing staff are often taken over
- Observe legal regulations
👉 Contracts often represent long-term obligations – a precise analysis is worthwhile here.
Consider personnel and working atmosphere
A functional team is a central success factor.
1. Employee structure
- Number and qualifications
- Dependence on key personnel
2. Working atmosphere
- Fluctuation
- Team motivation
👉 Tips for increasing employee satisfaction in your catering team can be found here.
Hygiene and official inspections
Catering businesses are subject to regular inspections by authorities.
- Food surveillance checks hygiene and processes
- Authorities may inspect business premises and take samples
👉 Deficiencies can lead to requirements or, in the worst case, closure.
Understand taxes and accounting
Tax aspects also play a major role:
- Correct cash register management is mandatory
- Different VAT rates for food and beverages
👉 Errors in accounting can be costly.
Common mistakes when buying a hospitality business
- Too quick a decision: Emotional decisions without a numerical basis
- Unclear contractual situation: Unchecked lease or supply contracts
- Underestimated costs: Renovation, personnel, ongoing fixed costs
- Blind trust in the seller: Information should always be verified
👉 Further avoidable mistakes when buying a hospitality business can be found here.
What really matters when taking over a catering business
A successful purchase is based on a combination of analysis and planning:
- Understand economic key figures
- Check legal requirements
- Critically question location and concept
- Realistically calculate investments
- Obtain external advice (e.g., tax advisor, lawyer)
The purchase of a hospitality business can be an attractive entry into self-employment. At the same time, the hospitality industry is one of the most demanding sectors – economically, organizationally, and legally. Those who take enough time for due diligence, critically question figures, and understand all framework conditions can benefit from the advantages of a takeover. Without careful preparation, however, the opportunity can quickly turn into a risk. It is therefore crucial not only what you buy – but how well you understand the business and the industry beforehand.
Article images by wavebreakmedia_micro, freepik and rawpixel.com on Magnific.
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