Blog · Guide · 4 min read

What to look for when buying a pub, café or restaurant in the UK

Buying a hospitality business is exciting, and adverts are written to keep it that way. "Well established", "huge potential", "genuine reason for sale". None of that is a lie, exactly, but none of it is evidence either. Much of what really matters sits in public records, and it's worth knowing what to look out for before you spend money on professional fees.

This is a checklist for England and Wales. It won't replace your solicitor or accountant, but it should help you decide whether a business is worth paying them to look at.

1. Know exactly what you're buying

Many adverts hide the name of the business, which is understandable. But you can't check a business you can't name. Before you invest time, you need to know the trading name, the legal entity behind it, and whether it's an asset sale (you buy the equipment, goodwill and usually the lease) or a share sale (you buy the company, history and all). The advert often doesn't say.

Where buyers get caught out: pinning down which business an anonymous advert really is, and which company actually owns it, is often the slowest part of the whole job. Get it wrong and every other check is about the wrong business.

2. The company's track record

If a limited company runs the business, its record on Companies House matters. Watch for late or missing accounts, strike-off warnings, growing debts, and lenders with security over the assets. Ask the agent why if the company is much younger than the "years of trading" in the advert.

3. Insolvency history

The Gazette is where liquidations and winding-up petitions are published. A past failure at the same premises doesn't rule a business out, but it changes who can legally sell the assets, the lease and the licence. Those are questions for your solicitor.

Where buyers get caught out: a history of failed companies rarely shows up under the name on the advert. Connecting the dots between companies, people and addresses takes hours, and it's where the most serious RED findings in our test checks came from.

4. The premises licence

If the business sells alcohol, the premises licence matters as much as the building. It names a licence holder and usually a designated premises supervisor. Ask whether the licence holder is still the right person or company, whether the hours and activities match what the advert promises, and what conditions come with it. GOV.UK explains premises licences and the personal licence you'll probably need yourself.

Where buyers get caught out: a licence still held by a company that no longer exists, or that's in liquidation. It isn't obvious from the advert, and it can turn a simple handover into a legal problem.

5. Food hygiene

Check the rating on the FSA ratings site. A low score can be turned round, but it may mean spending on equipment or training, and it puts customers off in the meantime. A new owner also has to register the food business.

6. Business rates

The rateable value tells you what your rates bill is likely to be based on. Relief such as small business rate relief depends on circumstances, so don't assume you'll pay what the current owner pays.

7. The lease

For a leasehold business, the lease is often worth more than the business itself. "20-year lease" means little without knowing how much is left. Ask about the start date, rent reviews, repairing obligations, any beer tie, renewal rights and whether the landlord must consent to the sale. GOV.UK has an overview of tenant responsibilities.

Where buyers get caught out: a lease with years less to run than the advert implies. It turned up in our own test checks, and it directly affects what the business is worth.

8. The figures

Turnover, profit, rent and wages should tell a consistent story. Ask whether figures come from filed or accountant-prepared accounts, or are estimates, and whether "profit" assumes the owner works for nothing. Anything missing goes on your list of questions for the agent, so don't fill the gaps with guesses.

9. Reviews and social media

Recent reviews and posts show how the business is doing now, not how it did when the advert was written. A drop in reviews, mentions of closures or a social account that's gone quiet are all worth asking about.

10. Staff and suppliers

If staff come with the business, TUPE rules usually mean their jobs transfer to you on the same terms. Ask about contracts, pay, supplier deals and equipment leases you'd be taking on.

An illustrative example

This example is made up to illustrate the point; it isn't a real business. A village café is advertised as "trading for 10 years" with a "long lease". The public record shows the current company is barely a year old, its predecessor at the same address was liquidated, and the lease has far less time left than the buyer assumed. None of that makes it a bad buy, but each point needs a written answer before anyone pays a solicitor.

Where this leaves you

You don't need to become an expert in company records to buy well. You do need these questions answered early, while walking away is still cheap.

Want it done for you? The BizHistoryCheck business history check looks into an advert against public records and sends back a red, amber and green report, with the questions to ask. See a sample report or check an advert.

This article is general information only. It is not legal, financial or tax advice. Registers can be out of date, and "nothing found" never means "all clear". Always speak to your solicitor and accountant before making an offer or signing anything.