How to Sell a Restaurant in Ontario: The Complete Process

By Jatin Dua · Licensed Realtor, RE/MAX Quantum Realty · Updated August 13, 2026 · 10 min read

I sell real estate and businesses across the GTA, and restaurants are one of the harder categories to sell well — not because buyers are scarce, but because the sale touches so many systems at once: your lease, your liquor licence, your staff, the CRA and your own financial records. This is the map of the whole journey. Each major step links to a deeper guide in this series.

What does the process actually look like, start to finish?

Here is the sequence I walk owners through. The order matters: preparation problems discovered late are the classic way restaurant sales go wrong.

Why do clean books come before everything else?

Because nothing downstream works without them. A buyer is purchasing your cash flow, and the only evidence of that cash flow they will accept is documentation: financial statements, HST filings, payroll records, POS reports. If the records are incomplete — or if some of the revenue never made it into them — the business is worth what you can prove, not what you know.

How is a restaurant actually valued?

The Business Development Bank of Canada describes three broad approaches to valuing a business: earnings- or cash-flow-based methods, market-based methods that look at comparable transactions, and asset-based methods — and it recommends engaging a professional such as a Chartered Business Valuator. For a restaurant, the earnings conversation centres on normalized earnings: what the business really generates once owner’s discretionary and one-time items are adjusted for. The lease, the equipment, the licences and the brand all push the number around.

Be wary of anyone who quotes you a “standard multiple” for Ontario restaurants without seeing your books — there is no reliable public standard, and I explain why in the full guide: how restaurant valuation actually works in Ontario.

How do you sell a restaurant without staff and customers finding out?

Confidentially, and it takes discipline. A restaurant that is visibly for sale can lose staff, spook suppliers and hand talking points to competitors before a buyer ever appears. So the marketing is blind: the listing describes the opportunity without identifying the business, and nobody learns the name until they have signed a non-disclosure agreement and shown me they are a plausible buyer — relevant background, and the means to close.

Buyer qualification is not gatekeeping for its own sake. Every disclosure is a small leak risk, so the goal is to disclose to few people and the right people. The full playbook is here: how a confidential restaurant sale works.

Should you sell the assets or the shares?

This is the biggest structural fork in the deal. In an asset sale, the buyer purchases specific assets — equipment, leasehold improvements, goodwill — from your corporation. In a share sale, the buyer purchases the shares of the corporation itself and takes the company whole.

Buyers often prefer asset purchases, because they can choose what they buy and limit the liabilities they inherit. Sellers of incorporated restaurants sometimes prefer share sales, because the Lifetime Capital Gains Exemption can shelter a gain on qualified small business corporation shares — the CRA’s guidance puts the exemption at $1,250,000 for dispositions on or after June 25, 2024. But QSBC qualification has strict tests, and only your accountant can tell you whether your corporation passes them. The trade-offs are laid out in asset sale vs share sale.

What conditions will the offer contain?

Almost every restaurant offer is conditional, and the conditions are where the real work happens. Expect at least these three:

Landlord consent. Your buyer needs your lease, and assigning a commercial lease usually requires the landlord’s consent. Section 23 of Ontario’s Commercial Tenancies Act provides a default that, where a lease requires consent to assign, that consent is not to be unreasonably withheld — but the default yields to the lease’s own wording, so the starting point is always reading your lease. Full guide: assigning your restaurant lease.

The liquor licence. A liquor sales licence does not simply follow the keys. The AGCO handles transfers through its iAGCO online portal, and its guidance describes an “Authorization to Contract Out” that can let the buyer operate the business while the transfer application is pending — with the existing licensee remaining liable in the meantime. Details: transferring the liquor licence.

Financing. Many restaurant buyers borrow part of the price, and their lender will scrutinize the same books your buyer did. A financing condition is normal; an open-ended one is not, and part of my job is negotiating condition periods that keep the deal moving.

If your restaurant is a franchise, add a fourth: franchisor consent and the transfer requirements in your franchise agreement. That has its own guide — selling a franchise restaurant.

What about HST on the sale?

GST/HST normally applies when business assets are sold. But the CRA’s guide on the sale of a business explains that a buyer and seller can jointly elect under section 167 of the Excise Tax Act — using Form GST44 — so that no GST/HST applies, where the buyer acquires ownership, possession or use of all or substantially all of the property needed to carry on the business, and, generally, both parties are GST/HST registrants. The election has conditions and exclusions, so it belongs in your accountant’s hands, not in a template. I walk through it in HST when selling a restaurant.

One piece of good news: Ontario’s Bulk Sales Act, which used to add a compliance layer to asset sales, was repealed on March 22, 2017. Buyers now protect themselves through due diligence and indemnities instead.

What happens to your employees?

Under Ontario’s Employment Standards Act, when a business is sold and the buyer employs your staff, their length of employment carries over — the province’s ESA guide says the new employer has to recognize the time worked for the previous employer. If the buyer does not continue employing them, you as the seller can owe termination pay and, in some cases, severance. In a unionized restaurant, successor rights under the Labour Relations Act can bind the buyer to the union and the collective agreement — get counsel involved early. The full picture, including the timing question of when to tell your team, is in what happens to your employees.

What happens during due diligence and closing?

Once conditions are being worked, the buyer’s team verifies everything: the financials against source records, the lease terms, equipment ownership versus leases, licence status, supplier contracts, employee records. Your job is to be organized and responsive; slow document production reads as concealment even when it is only disorganization.

Closing is the lawyers’ show: final agreements, adjustments for inventory and prepaid items, the HST election if one is being made, the lease assignment, and the handover plan for staff and the licence. A well-prepared closing is boring. That is the goal.

Where do I fit in?

Commercial and business sales, including restaurants, are part of my practice alongside residential work across the GTA. My role is the confidential marketing, buyer screening and negotiation — keeping the sale quiet, keeping it moving, and keeping the price defensible — while your lawyer and accountant handle the legal and tax execution. I do not replace either of them, and I will tell you when a question is theirs.

Frequently asked questions

Sources

• BDC — Business valuation: what’s your company worth?. The three valuation approaches and the recommendation to engage a professional. Accessed 13 August 2026.
• CRA GST/HST Memorandum 14-4 — Sale of a Business or Part of a Business. The section 167 election, Form GST44, and its conditions. Accessed 13 August 2026.
• CRA — Line 25400: Capital gains deduction. The $1,250,000 LCGE for dispositions on or after June 25, 2024. Accessed 13 August 2026.
• Ontario — Your guide to the ESA: Continuity of employment. Length of employment attributed to the purchaser when staff continue. Accessed 13 August 2026.
• AGCO — Manage your liquor sales licence. Transfer applications through iAGCO when a business is sold. Accessed 13 August 2026.
• AGCO — Section 7: Transferring a Liquor Sales Licence. The Authorization to Contract Out while a transfer is pending. Accessed 13 August 2026.
• Commercial Tenancies Act, R.S.O. 1990, c. L.7 (e-Laws). Section 23 on consent to assignment. Accessed 13 August 2026.
• BLG — The Bulk Sales Act (Ontario) repealed. Repeal effective March 22, 2017 under the Burden Reduction Act, 2017. Accessed 13 August 2026.

Related reading

• How restaurant valuation actually works in Ontario
• Asset sale vs share sale: which way to sell your restaurant?
• How a confidential restaurant sale works