Purchasing a restaurant is a significant investment that requires careful planning but also self-examination and assessment. At We Sell Restaurants, the nation’s leading restaurant brokerage firm, we guide thousands of buyers annually through the complex process of buying a restaurant. The journey is a marathon, not a sprint, with the average transaction taking about six months to close, according to our data and industry sources like BizBuySell. Whether you’re eyeing a franchise restaurant for sale, an independent concept, or a food cart, asking these five key questions before buying a restaurant will save you time, money, and frustration. These considerations position you as a strong candidate for lenders, franchisors, and sellers, ensuring a successful purchase.

1. What Type of Restaurant Am I Buying?

Understanding the financial structure of the restaurant for sale is critical. Are you purchasing a cash flow-positive business or an asset sale? An asset sale includes furniture, fixtures, equipment, and the right to operate in the location but may not generate immediate revenue. These turnaround opportunities often don’t qualify for Small Business Administration (SBA) loans, though unsecured lending or alternative financing may be available. Here’s what to consider when buying a restaurant:

For Non-Cash Flow Positive Businesses (Asset Sales):

• Do I have proof of funds to cover the restaurant purchase price?
  Without cash flow, you’ll need sufficient capital to cover the full cost. If funds are short, explore partnerships, unsecured loans, or alternative sources like a home equity line of credit. Secure these before searching for restaurants for sale to streamline the process.
• Do I have liquidity for 3–6 months of rent and operating expenses?
  Beyond the purchase price, you’ll need reserves to cover rent and operations until the business turns profitable. Landlords will expect proof of your ability to sustain the restaurant during this period.
• What’s my credit score for restaurant financing?
  Since the business won’t qualify for lending, your personal credit score is key. Check your credit report early, especially for outstanding debts like student loans, to avoid surprises when applying for restaurant business loans.
• Do I have the experience to turn this restaurant around?
  Turnaround opportunities require hands-on expertise. Assess whether you have the skills to revamp operations, rebrand, or overhaul the concept to make it profitable.

>>See Resources for Unsecured Lending for Buying a Restaurant

For Cash Flow-Positive Restaurants:

• What’s my credit score for a restaurant business loan?
  Even with a profitable restaurant, lenders evaluate your personal credit to ensure responsible money management. A strong score strengthens your loan application.
• Am I a U.S. legal resident, along with my partners?
  As of June 2025, SBA loan rules require all partners to be U.S. legal residents. If relying on non-resident partners for funds, explore alternative financing early to avoid rejections.
• What’s my cash position for buying a restaurant?
  Lenders typically require a 10–20% down payment for cash flow-positive restaurants. Landlords may also expect several months of rent in reserve—often around $100,000 in liquid assets. Ensure these funds are accessible before submitting an offer.

>>See Resources for SBA Lending for Buying a Restaurant

Secure financing or investor capital before making an offer to avoid being seen as a “tire-kicker.” Sellers and We Sell Restaurants’ Certified Restaurant Brokers expect serious buyers ready to move forward.

2. Are You Buying a Franchise Restaurant for Sale?
   

Franchise restaurants for sale come with unique requirements set by the franchisor, differing from independent restaurant purchases. Meeting these standards is non-negotiable. Consider these questions when buying a franchise restaurant:

• Do I meet the franchisor’s net worth and liquidity requirements?
  Franchisors enforce strict financial thresholds, often requiring a net worth of $450,000 and liquid assets of $150,000, even for resales. Confirm you meet these before pursuing a franchise restaurant for sale.
• Is my cash readily accessible?
  Cash tied up in a business, 401(k) (unless using a ROBS rollover), or foreign accounts may not qualify. Transfer funds to a personal U.S. bank account to demonstrate liquidity before submitting an offer.
• Do I own any competing restaurant brands?
  Owning a competing concept can disqualify you. Be transparent, as hiding ownership through a separate LLC is unethical and likely to be uncovered, leading to rejection.
• Can I attend the franchisor’s training schedule?
  Franchisors often require 3–6 weeks of in-store training, which may conflict with your current job. If you can’t attend, consider an operating partner with an ownership stake. Some franchisors mandate two trained individuals. Failing to meet training requirements could result in losing your escrow.

Understanding the franchisor’s expectations ensures alignment. If they don’t fit, explore independent restaurants for sale with We Sell Restaurants.

3. Are You Ready to Assume the Restaurant Lease?

The lease is a critical component of a restaurant’s value, especially in prime locations. Landlords typically expect buyers to assume existing lease terms without negotiation for lower rent or new improvements. Evaluate these when buying a restaurant:

• Are you prepared to accept the lease terms as-is?
  Renegotiating lease terms after drafting an offer rarely succeeds, as landlords already have a paying tenant. Work with your Certified Restaurant Broker to identify unique circumstances, such as converting to a franchise, which might persuade the landlord to offer short-term rent relief for a longer lease term. Avoid expecting rent reductions.
• Do you understand the lease’s financial obligations?
  Review rent, security deposits, and renewal options to ensure you’re prepared. A strong lease in a prime location adds value, but only if you can meet its terms.

Clarifying lease terms early strengthens your offer and avoids surprises.

4. Do You Have Relevant Restaurant Industry Experience?

While prior restaurant ownership isn’t required, experience boosts your success and approval chances from lenders or franchisors. Evaluate your background when considering a restaurant for sale:

• Are you a current or former restaurant owner?
  Ownership experience signals to franchisors and landlords that you understand the industry, increasing your credibility.
• Have you worked in restaurant or hospitality management?
  Years in restaurant operations or management demonstrate familiarity with the industry’s challenges, even without ownership.
• Are you a franchise owner of another brand?
  Experience with another franchise shows you can navigate structured systems, a strong asset for franchise restaurant purchases.

Related experience in catering, foodservice, or hospitality strengthens your profile. Highlight these qualifications to stand out with We Sell Restaurants.

5. What’s Your Motivation for Buying a Restaurant?

Buying a restaurant is a lifestyle choice, not just a financial decision. Clarifying your “why” ensures you pursue the right opportunity. Consider:

• Are you seeking better work-life balance?
  Restaurants demand long hours but may offer more flexibility than a corporate job with constant travel. Ensure the business aligns with your lifestyle goals.
• Do you want to build a legacy or transition from corporate life?
  Your vision may influence whether you choose a scalable franchise or a unique independent restaurant.
• Is this an investment or an owner-operator role?
  Owner-operators often succeed with turnarounds, while investors may prefer cash flow-positive restaurants. Be honest about your goals.

Clear motivations align your goals with the right restaurant for sale, making you a compelling buyer to sellers and We Sell Restaurants’ Certified Restaurant Brokers.

Why Trust We Sell Restaurants?

With over 20 years of experience, We Sell Restaurants has facilitated thousands of restaurant sales as the leading Certified Restaurant Broker. Our expertise, industry knowledge, and personalized guidance ensure buyers find the right restaurant for sale, from financing to lease negotiations. Client testimonials highlight our commitment to success, making us the trusted partner for your restaurant purchase.

FAQ: Common Questions About Buying a Restaurant

• How long does it take to buy a restaurant?
  On average, it takes six months to close a restaurant purchase, per We Sell Restaurants and BizBuySell data.
• What financing options are available for restaurants for sale?
  Options include SBA loans, unsecured lending, or alternative sources like home equity or partnerships. Consult We Sell Restaurants for tailored advice.
• What qualifications do I need for a franchise restaurant?
  Franchisors require a minimum net worth (e.g., $450,000), liquidity (e.g., $150,000), and often industry experience or training commitment.

Ready to Buy a Restaurant?

Explore restaurants for sale on WeSellRestaurants.com to find opportunities matching your location, cuisine, and budget. Contact our Certified Restaurant Brokers and be ready to discuss:

• Your restaurant financing strategy (cash, loans, or investors)
• Your restaurant or business background
• Your timeline for ownership
• Why this restaurant for sale fits your goals

Not sure where to start? Our team guides you through financing, due diligence, lease negotiations, and franchisor onboarding. Visit WeSellRestaurants.com or call our Certified Restaurant Brokers to begin your journey to restaurant ownership today.