Purchasing an existing restaurant in Florida can be a smart business move. The state offers several benefits, including a massive number of residents and tourists willing to consume high-quality goods and services.
In this article, you will find the essential steps to buying a restaurant in Florida.
Buying a Restaurant in Florida – The Fundamentals
Business Purchase Agreement
The most important document involved in process of buying a restaurant in Florida is the business purchase agreement. This contract outlines the terms and conditions of the sale, including:
- Party identification
- Description of the business
- Financial terms
- The assets included in the transaction
- Each party’s contractual duties and responsibilities
- Covenants and protective clauses
The signature of this legally binding instrument happens after a process that begins in the negotiation, going through the due diligence, the buyer’s issuance of Letters of Intent (LOI), and the final stages until the signature of the documents.
It is crucial to determine the restaurant’s location and whether it is included in the purchase as a property purchase or a commercial lease contract.
Florida law has strict regulations when it comes to land use and zoning. Handling the complex aspects of these regulations at the local, state, and federal levels are not easy for non-lawyers.
Closing the transaction also requires utmost attention, as the business purchase agreement is only one of the documents required in this phase. The best strategy is to consult with a well-versed attorney to conduct the whole process leading to the closing by:
- Providing valuable insights
- Representing a client during negotiation
- Reviewing the terms and conditions of the transaction
- Overseeing the due diligence process
- Helping to draft or review the terms in an LOI
- Handling and reviewing all required paperwork
- Identifying and avoiding potential pitfalls in the transaction
- Drafting the business purchase agreement
- Helping both parties to close the transaction as smoothly as possible
It is illegal to operate a restaurant in Florida without approval from the Department of Business and Professional Regulation (DBPR), the agency responsible for regulating and licensing restricted activities.
Businesses serving foods and drinks must file different forms with DBPR, such as Form DBPR-7005 (Division of Hotels and Restaurants Application for Plan Review) and Form DBPR HR-7007 (Division of Hotels and Restaurants Application for Public Food Service Establishment License).
Obtaining a license to serve alcoholic beverages can be more challenging, depending on the type of license. This segment is regulated by the Division of Alcoholic Beverages and Tobacco (ABT), a branch of the DBPR.
A restaurant also needs to file taxes at the local, state, and federal levels, which require different tax permits. For example, Florida restaurants must obtain a seller’s permit (or sale tax license) to collect taxes on goods and services provided by the business.
Please note that the necessary licenses and permits to operate a restaurant should be properly included in the business purchase agreement as part of the assets transferred to the new owner.
If the establishment needs additional licenses and permits, the guidance of an expert licensing attorney is crucial to identify the best licensing strategy.