Restaurant takeover checklist: fonds de commerce (business asset), lease, debts and permits to check before you sign

A restaurant takeover can take three different legal forms, which do not concern the same object and do not entail the same checks: the sale of the fonds de commerce (clientele, trade name, lease rights, equipment), the sale of the droit au bail alone (the leased premises, without the other elements of the fonds), or the cession de titres — parts sociales or actions — of the company operating the restaurant.

In a cession de fonds de commerce, the landlord cannot oppose the transfer of the business itself: any lease clause forbidding it is deemed unwritten (réputée non écrite). In a cession de bail seul, the landlord's prior written consent is almost always required. In a cession de titres, it is the company that remains the tenant: its identity as tenant does not change, and the landlord in principle has no say over the buy-out of the shares.

Taking over a restaurant most often means taking over a bail already signed by a third party, with its remaining term, its clauses and its history. This lease must be read in full before valuing the takeover.

The destination of the lease — the activity it actually permits — must match the intended concept. A lease that permits « restauration » does not necessarily permit alcohol, extraction, a terrasse or delivery: these uses must be checked clause by clause, just as for a new opening.

The history of the fonds in the SIRENE register lets you check the real continuity of operation: dates of creation, cessation or removal (radiation) of the establishment, and any succession links (liens de succession) between the predecessor and the current seller.

A fonds that has been closed for a long time may have lost part of its clientele and footfall — two elements that make up the value of the fonds de commerce. An alcohol licence (licence de débit de boissons) attached to an establishment that is not being operated can also lapse (péremption) after five consecutive years of closure, which would cause the buyer to lose the benefit of it.

A fonds de commerce may be encumbered by a nantissement (pledge) or a privilège (preferential claim) securing a seller's debt that has not yet been settled. The law sets up a procedure to protect the buyer: the sale must be published in a journal of legal notices and then in the BODACC (the official bulletin of civil and commercial notices) within fifteen days of the deed, which opens a ten-day period for the seller's creditors, from that publication, to lodge an opposition to payment of the price.

Until that period has run its course, the sale price cannot be freely released to the seller: creditors who came forward within that period can block the payment, demand to be paid out of the price, or make a higher bid (surenchère). This is why the sale price is generally held in escrow (séquestre) — often by the notaire — during this period.

A takeover does not automatically transfer all of the previous operator's permits. Some follow the fonds or the building; others are personal to the previous operator and must be applied for again in the buyer's name.

The alcohol licence in principle transfers with the fonds, but its transfer (mutation) must be declared to the mairie in the new operator's name. A sanitary approval (agrément sanitaire), if one exists, must also be checked. The ERP classification in principle follows the building, but a change of operator requires reviewing the predecessor's opening order (arrêté d'ouverture) and the report of the safety commission (commission de sécurité), and can trigger a new inspection if the premises have stayed closed for more than ten months or if works are planned. The permit to occupy public land (autorisation d'occupation du domaine public — terrasse, display) is personal and non-transferable: it ends automatically on the sale of the fonds, and the buyer must apply for a new one.

The equipment taken over (kitchen, refrigeration, extraction, furniture) is part of the value of the fonds, but its real condition and ownership must be checked separately from the advertised price.

Some equipment may belong to the landlord, be under a lease-finance arrangement (crédit-bail) or be the subject of a rental contract separate from the fonds: in that case it does not belong to the seller and cannot be sold with the fonds without lifting those contracts.

In some communes, the municipal council has defined a périmètre de sauvegarde du commerce et de l'artisanat de proximité (protection perimeter for local shops and crafts). Within this perimeter, any sale for value of a fonds de commerce, an artisanal business or a bail commercial is subject to the commune's pre-emption right (droit de préemption).

The seller must then send the commune a prior declaration (déclaration préalable) specifying the price, the activity the buyer intends, the seller's employees and the terms of the cession. The commune has a two-month period to decide: after that, its silence counts as a waiver and the sale can go ahead on the declared terms.

When a restaurant changes operator while continuing its activity, the current employment contracts are transferred by operation of law to the buyer: the staff in post continue their contract with the new operator, on the same terms, without any agreement between the parties being able to set this rule aside.

The buyer must therefore know precisely the fonds's employment situation before signing: staff taken over, seniority, ongoing or past labour-court (prud'homaux) disputes, final-settlement balances (soldes de tout compte), and any non-compete or non-poaching clause that might concern them.

The price asked for a fonds de commerce must be consistent with its real chiffre d'affaires (turnover), its profitability, its location and the state of the bail, the equipment and the permits. A high price guarantees neither a good location nor a healthy fonds.

This verification cannot be automated and is not covered by an address pre-diagnostic alone: it requires analysing the accounts, the tax filings and the real cash position of the business, work that falls to your chartered accountant (expert-comptable) or your lawyer.