There’s no denying it, running a pub or restaurant in the UK is a hard slog. It has become increasingly difficult over recent decades, whether it’s the cost of a pint, business rates, or the ever-increasing red tape surrounding employment law. If you’re preparing to sell your pub or restaurant, whether you’re ready to retire, or take on a fresh challenge, you’ll already be thinking about how to attract the right buyer: presenting the premises well, dealing with any essential repairs, and ensuring your online reputation and reviews are in good shape.
Alongside the practical and financial steps, such as working with your accountant on how to value your pub or restaurant, tax planning, and providing financial records, it’s essential to get the legal groundwork right. Being well-prepared can make your business more attractive to buyers and prevent last-minute issues that might cause delays or reduce the sale price.
Here are some of the main legal areas to focus on when planning the sale of a pub or restaurant.
When selling hospitality businesses, early preparation pays off
Buyers want reassurance that the business they are acquiring is well run and compliant. Sorting out potential issues early will make your business more appealing and the process less stressful.
It’s also a good opportunity to check that your company’s records, filings, and governance are all in order. With changes coming under the Economic Crime and Corporate Transparency Act 2023, now is the right time to make sure everything is accurate and up to date.
Anticipate buyer checks
Every buyer will carry out “due diligence” – a detailed review of the business before signing on the dotted line. You can save time and avoid problems by reviewing key areas in advance, including:
- Company records: If you are selling shares, check statutory registers, Companies House filings and share histories are complete and consistent.
- Compliance and data protection: Buyers will expect evidence that you handle customer bookings, marketing lists and employee data in line with GDPR.
- Contracts: Look at employment contracts, supplier agreements, booking platforms, and other commercial arrangements. Are there any clauses that could trigger termination on a sale, or restrict assignment to a buyer? Do senior staff have restrictive covenants protecting the business post-sale?
- Assets and brand: Confirm ownership of property, equipment, websites, and trademarks. If consultants have worked on your branding or website, check that intellectual property has been formally transferred to your business.
- Point of sale description: Be ready to provide a clear “point of sale description” of your business, setting out what is being sold, how the business operates, and any exclusions (for example, personal assets or non-transferable licences). A concise and accurate description helps reassure buyers and reduces the risk of misunderstandings later.
Don’t overlook licensing
Licences are central to running a pub or restaurant, so buyers will want clarity on what permissions are in place. Your premises licence will need to be transferred, and a new designated premises supervisor may need to be appointed if you don’t plan to continue in that role.
Other consents, such as outdoor seating, live music, or late-night refreshment licences, should also be reviewed to confirm they can be passed on smoothly. Getting this right avoids delays and ensures continuity of trade after completion.
Agree how the price will be finalised
In many sales, the price is adjusted at completion to reflect day-to-day factors such as:
- Stock levels
- Deposits from advance bookings
- Prepaid utilities or service contracts
In company share sales, the final figure may also be adjusted through completion accounts to reflect the business’s net asset value. Agreeing how adjustments will work early on gives certainty and avoids disputes later.
Plan for life after the sale
It’s important to consider your own future plans and how they fit with the buyer’s expectations. You may be asked to agree to restrictive covenants that prevent you from opening a competing venue nearby or hiring key staff.
If you intend to stay on temporarily, perhaps as a consultant, make sure the terms of that arrangement are clear. If you are retiring, show that the business can run smoothly without your ongoing involvement to reassure potential buyers.
Our expert private client team are well placed to advise on updating your wills and powers of attorney at what will be a key milestone in your life.
Decades of hospitality sector experience
Our Company & Commercial and Commercial Property teams have decades of experience advising businesses in the hospitality and leisure sector. From the sale and purchase of pubs, restaurants, and hotels, to day-to-day legal matters such as leases, contracts and employment advice, we provide practical advice that reflects the realities of running a hospitality business. Based in Lymington, Hampshire, we act for clients right across the South Coast region, supporting independent operators, family businesses and larger groups alike.
Fixed legal costs for sale of business
Did you know, our business solicitors almost always work to fixed fee agreements when acting on the sale of a business? Unlike firms still using hourly rates, and loose estimates, we offer a clear fixed fee right from the beginning, so that you know the extent of your outlay from the start.
Head of Corporate and Commercial at Scott Bailey, Ben Ironmonger, says “Why agree a fee structure that only benefits the lawyer if things become more complex and drawn out? We’d rather help you get your deal done, so that you can enjoy your next stage.”
How we can help
Selling a pub or restaurant is rarely a straightforward process. It requires careful coordination of corporate, commercial, property, employment and licensing law. That’s where we come in.
At Scott Bailey LLP, our hospitality and leisure solicitors help business owners like you through every step of the sale process. We help identify and resolve potential issues early, protect your position in negotiations, and ensure your sale agreement reflects the deal you want.
Whether you’re ready to take the next step, or simply want to enquire about how we can help you, contact our corporate and commercial team today for expert advice on selling your pub or restaurant. If you’d prefer to speak to us, call us on 01590 676933.
