Buying a Restaurant in BC: Lease, Liquor Licence, Equipment and Permits

A restaurant for sale can look like a turnkey opportunity: the kitchen is built, the tables are set and the customers already know the address. But several of the things that make it work, from the lease to the liquor licence, do not simply pass to a new owner.

This article sets out the restaurant-specific items a buyer in BC should review before committing, including what the Liquor Control and Licensing Act and the Food Premises Regulation say about new owners.

Start with the structure of the deal

Most restaurant purchases are either an asset purchase (you buy the equipment, goodwill, name and lease from the seller's company) or a share purchase (you buy the company that runs the restaurant). The choice affects which liabilities come with the business and how each licence and permit is handled. Our article on share purchase or asset purchase explains the trade-offs.

Whatever the structure, the points below should be reviewed before your offer becomes firm, and the important ones written into the purchase agreement as conditions.

The lease is often the real asset

For most restaurants, the location matters as much as the menu, and the location depends on the lease. Review:

• Remaining term and renewal options. A short remaining term may not leave enough time to recover what you pay for the business.
• Assignment terms. Most commercial leases need the landlord's consent to an assignment, and many treat a change in control of a corporate tenant the same way. Ask what the landlord will require, such as financial information, a personal covenant or a higher deposit.
• Use clause and exclusivity. Make sure the permitted use covers your concept, including any change to liquor service, hours or takeout.
• Repair and fit-out obligations. Who is responsible for the grease trap, ventilation hood, HVAC and restoration at the end of the term.
• Arrears and defaults. An estoppel certificate from the landlord can confirm that rent is paid and there are no known defaults.

Our article on commercial lease clauses covers these terms in more detail.

Liquor licence: transfer, not automatic

Under the Liquor Control and Licensing Act, a licence is transferred only by the general manager of the Liquor and Cannabis Regulation Branch, on application. The seller must not purport to transfer or otherwise deal in the licence before that happens (section 21). The Province's guidance says that when a business changes ownership, the liquor licence must be transferred; the current licensee starts the transfer in the licensing portal, and the buyer then completes the application. An expired licence is not eligible for transfer.

Section 22 lets the proposed buyer use the licence while the branch completes its review, and treats the buyer as the licensee for that period. The branch's guidance says the establishment can stay open during the transfer, with the seller responsible for the licence until the branch confirms the application is administratively complete. If the transfer is ultimately refused, the general manager may suspend the licence, allow a transfer to an arm's-length person, or cancel it. That is a risk to price in, and a reason to make approval of the transfer a condition of closing.

The application also has to meet the Act's eligibility rules. Among other things, the applicant generally must own the business and must own, or have an arrangement giving sufficient control over, the premises, which brings the lease back into play (section 19).

If you are buying shares instead, the licence stays with the company. Under a September 2025 branch bulletin, private corporations holding licences such as food primary and liquor primary no longer report share transfers, but must report changes to their directors and officers, who must provide criminal record checks and personal history summaries. Confirm the current requirements for the specific licence class.

Health permit, business licence and FOODSAFE

Health permit. Under BC's Food Premises Regulation, a person must not operate a food service establishment without a permit from a health officer, and the permit is not transferable. As the buyer, you need your own permit from the local health authority. Any construction or alterations to food premises also need plan approval from a health officer first, which matters if you plan to renovate.

FOODSAFE. The same regulation requires the operator of a food service establishment to hold a FOODSAFE certificate or equivalent, and to make sure at least one certified employee is present when the operator is away.

Municipal business licence. Rules vary by municipality. The City of Vancouver allows a business licence to be transferred to a new owner only if the new business is the same type (a restaurant to a restaurant), only once each calendar year, and subject to any zoning, building, police, fire and health approvals. Outside Vancouver, check the local bylaw early.

Equipment, suppliers and the things that are not on the asset list

Restaurant equipment is often leased or financed. A search of BC's Personal Property Registry can show whether a lender or leasing company has registered an interest in the ovens, coolers, point-of-sale system or furniture. The purchase agreement should list the included assets, confirm they are owned free of claims, and deal with leased items expressly.

Also review supplier and distributor agreements, delivery-app accounts, online reservation and review profiles, gift cards and loyalty balances, the trade name and social media accounts, and any franchise agreement, which usually needs the franchisor's approval. Our due diligence checklist for buying a business covers the general items.

Staff

Staff who keep working in the restaurant after the sale are not treated as new hires under BC's employment standards law. Section 97 of the Employment Standards Act says that if all or part of a business is disposed of, an employee's employment is deemed continuous and uninterrupted for the purposes of that Act. Their length of service under that Act carries over to you, including for an asset purchase. Ask for an employee list with start dates, wages, tips and gratuity practices, and any outstanding vacation pay, and address who pays what in the agreement.

Buying a restaurant? Have the lease and licences reviewed before you commit

Our business purchase and sale lawyers can review the purchase agreement and lease, coordinate the liquor licence transfer and landlord consent, search for registered claims on the equipment, and handle the closing.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.