Selling a food and drink business in the UK
Selling a UK pub, restaurant, cafe or food business. What buyers want to see on the lease, the kitchen, the licence, and the numbers.
Overview
Food and drink covers a wide spread in the UK: tenanted and freehold pubs, independent restaurants, cafes and coffee shops, takeaways, food production and wholesale, and the growing world of dark kitchens. Most owners selling in this sector have built the business through long hours and tight margins, and want a clean handover that respects what they have created.
Buyers in hospitality price for risk. Lease length, alcohol licence transferability, kitchen condition, and reliable trading patterns are the four things they look at first. Get those documented and the conversation moves quickly to price.
Selling a food & drink business
What buyers look for in a hospitality business
Three things up front: weekly takings split by daypart (breakfast / lunch / dinner / late), gross profit margin separated by wet and dry sales for licensed premises, and an honest read on labour cost as a percentage of revenue. Buyers know hospitality is staffing-heavy and seasonal, so they are looking for trends and the ability to explain dips.
Lease, freehold, and the alcohol licence
Most pub and restaurant sales hinge on the lease (or freehold) and the licence. For leased premises: how long is left, what are rent-review and break-clause provisions, and how does the landlord treat assignment? For freehold: are you selling the property with the business or separately? On the alcohol licence: the premises licence usually transfers with the business, but the Designated Premises Supervisor must be a qualified personal licence holder, and that needs planning into the handover.
Kitchen, plant, and compliance
A walk-around with someone who knows kitchens is worth its weight. Buyers want a current EHO rating (ideally 5), a clean PAT testing record, a documented HACCP system, working extraction, current gas safety certification, and a sensible answer on equipment age and remaining useful life. Stock is typically separated and valued at completion.
Typical UK hospitality valuation multiples
Independent restaurants and cafes typically trade at 1.5x to 3x adjusted SDE. Tenanted pubs often trade at 0.5x to 1.5x turnover (or 2x to 4x SDE), reflecting tighter margins and lease risk. Freehold pubs are priced on a blend of business value and property value, with the property element frequently dominant. Wet-led pubs in catchment-rich locations and strong-margin specialist food operations can push above these ranges.
Preparing your hospitality business for sale
- Three years of accounts, plus weekly takings reports for the last 12 months
- Latest EHO inspection report and PAT, gas, and fire safety certificates
- An honest answer on labour percentage, staff retention, and key-person dependency
- A list of equipment with age, condition, and any finance still outstanding
A few hospitality-specific extras
- Reviews matter: a consistent 4-star plus presence on Google and TripAdvisor lifts the multiple
- Delivery platform revenue (Deliveroo, Uber Eats, Just Eat) is part of the picture, separate it out
- Seasonal cashflow needs to be transparent: a buyer taking over in January should know what March looks like
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Frequently asked questions
- Does the alcohol licence transfer with the business?
- The premises licence transfers with the business. The Designated Premises Supervisor (DPS) must be a qualified personal licence holder, so the buyer needs one in place at completion. This is straightforward to plan but easy to overlook.
- How are tied vs free-of-tie leases treated?
- Tied leases (where you buy beer from the pubco at set prices) trade at lower multiples than free-of-tie, because margins are constrained. Buyers ask for the latest BDM correspondence and any open rent negotiations. Be ready to share.
- What about the freehold?
- Selling business and freehold together typically gets the highest headline price but the smallest buyer pool. Splitting them (selling the business and letting the freehold to the buyer) widens the pool and creates ongoing income, but lowers the headline. Take advice on the tax treatment of each.
- How do I value goodwill if my margins are thin?
- Cafes and restaurants with strong location and reputation but thin margins are often priced closer to fixtures-and-fittings value plus a small goodwill premium. That is honest, and a credible buyer will pay it. Inflating goodwill on weak margins is a fast way to lose serious buyers.
Last reviewed 29 May 2026
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