So You Want to Buy a Restaurant? Here’s What You Really Need to Know
- Micah
- Jul 9, 2025
- 5 min read
Updated: Aug 29, 2025
Opening a restaurant or takeaway isn’t just a business decision — it’s a full-body commitment. It’s your recipes, your reputation, and your retirement plan all rolled into one.
But before you start plating up your signature dish, there’s a slightly less glamorous question to answer: Where exactly is this culinary empire going to live?
Buying your own premises — rather than renting — can be a smart move. But only if you go in with your eyes open and your budget spreadsheet fortified.
Why Buy Instead of Rent?
Renting is like dating: low commitment, easy to exit, and occasionally full of surprises (usually involving the boiler). Buying, on the other hand, is like marriage — more expensive upfront, but with long-term stability and fewer awkward conversations with landlords about extractor fans.
When you own the space:
You control the layout.
You’re not at the mercy of rent hikes.
You’re building equity, not just someone else’s pension pot.
If you’re serious about your food business, owning the premises gives you the freedom to grow — and the security to sleep at night.
Location: It’s Not Just About Footfall
Yes, you want foot traffic. But you also want:
The right kind of foot traffic (office workers? students? hungover brunchers?)
Visibility (can people find you without a treasure map?)
Access (for customers, delivery drivers, and your future self hauling in 20kg sacks of flour)
And don’t forget the vibe. A vegan café might thrive in Hackney but flop in a sleepy commuter village.
Spend time in the area. Lurk in local cafés. Watch the footfall. Eavesdrop (politely). It’s the cheapest market research you’ll ever do.
Licences, Layouts & Legal Landmines
Restaurants aren’t just shops with ovens. They come with a buffet of legal and compliance requirements:
Use class: Most restaurants = Class E. Takeaways = sui generis (Latin for “you’ll need planning permission”).
Ventilation: You’ll need proper extraction. And no, a desk fan doesn’t count.
Fire safety & accessibility: Think exits, alarms, and wheelchair access.
Food hygiene: Can you separate raw and cooked zones? If not, Environmental Health will have words.
Buying a unit already fitted for food use can save you thousands. If not, budget for the full works — and then some.
What to Check Before You Buy
Here’s your unofficial checklist (minus the bullet points and with slightly more sarcasm):
Is the use class correct?
Does the kitchen have actual infrastructure, or just a plug socket and a dream?
Any signs of damp, dodgy wiring, or structural issues?
Are there planning restrictions or covenants that say “no frying after 6pm”?
Is there space for bins, deliveries, and that all-important extractor fan?
And yes, get a solicitor. One who knows commercial food premises. Not your cousin who once helped someone buy a shed.
Can You Get a Mortgage for This?
Yes. But it’s not like buying a flat.
Lenders will want:
A business plan (menus, market, revenue projections — the works)
Your financials (past and future)
A deposit (usually 25–40%)
If you’ve run a food business before, great. If not, be prepared to explain why this won’t be a very expensive hobby. A good broker - ideally one who’s funded the odd restaurant or two - can make all the difference.
Need expert commercial mortgage advice?
Fit-Out Costs: The Bit Everyone Underestimates
Buying the building is just the starter. The fit-out? That’s the main course. And it’s rarely cheap.
Commercial kitchen kit is pricey.
Plumbing and electrics may need upgrading.
Front-of-house design adds up fast.
Compliance costs are non-negotiable.
And delays? Oh yes. Always budget for delays. Then double it. Then add a discretionary 12.5% service charge.
Buying as an Investor? Here’s the Play
You don’t need to be the next Ottolenghi to profit from the food business. In fact, you don’t even need to know how to poach an egg. If you’re more interested in rental yields than risottos, buying a restaurant or takeaway unit as an investment can be a smart move — provided you approach it with the same rigour you’d apply to any other commercial asset.
Why Food Premises Make Attractive Investments
Sticky Tenants: Food operators tend to stay put. Why? Because once they’ve spent tens of thousands fitting out a kitchen, installing extraction systems, and branding the place to within an inch of its life, they’re not keen to start over somewhere else. This means longer leases, lower turnover, and fewer void periods.
High Yields: In the right location, takeaway units can deliver strong rental returns — often outperforming standard retail. Busy high streets, transport hubs, and densely populated residential areas are prime hunting grounds.
Resilience: The food sector, particularly takeaway and delivery, has shown remarkable resilience — even during economic downturns. People might cut back on holidays, but they’ll still order a Friday night curry.
What to Watch Out For
Of course, it’s not all gravy. Food premises come with quirks that make lease structuring and due diligence especially important:
Fit-Out Clauses: Make sure your lease clearly defines who owns what. If your tenant installs a £30k pizza oven, is it theirs or yours? And who’s responsible for removing it if they leave?
Maintenance Responsibilities: Kitchens are hard on buildings. Grease, heat, and heavy footfall take their toll. Ensure your lease spells out who’s responsible for maintaining extraction systems, grease traps, and other specialist kit.
Rent Reviews: Build in regular rent reviews — ideally upward-only — to keep pace with market rates. But be realistic. If your tenant’s margins are tight, a steep hike could push them out (and you back to square one).
Break Clauses: These should work both ways. Give your tenant flexibility, but protect your own position too. A well-drafted break clause can be a lifesaver if things go south.
Planning and Licensing: Always confirm the unit has the correct use class (Class E or sui generis) and that any licences (e.g. late-night refreshment, alcohol) are in place or achievable. A tenant without the right permissions is a tenant who won’t be trading — or paying rent.
Bonus Tip: Buy with the End in Mind
If you’re buying purely for investment, think about resale value from day one. Is the unit adaptable? Could it be re-let to a different type of operator if needed? Is the location improving or declining? A unit next to a new Crossrail station is a very different proposition to one next to a boarded-up pub.
Final Thoughts: Think Long-Term
Whether you’re chasing a dream or chasing returns, the rules are the same:
Know your numbers
Build the right team (solicitor, broker, planner, builder)
Plan for the long haul
Because this isn’t just about opening a restaurant. It’s about building something you own, control, and maybe even pass on one day.
Need expert commercial mortgage advice?