Published 29 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
Buying a restaurant in Ontario runs in seven steps: decide whether you are buying assets or shares, test the asking price against the seller’s real numbers, sign an offer with conditions, do due diligence, get the landlord’s consent to assign the lease, move the licences, then close. The liquor licence does not simply come with the keys: the AGCO must approve a transfer, which costs $1,000, and you cannot run the bar until the Registrar issues an Authorization to Contract Out or the transfer itself. In Toronto the city business licence is not transferable, so you apply for your own ($536.64 for a new eating or drinking establishment licence). On an asset purchase, 13 percent HST applies unless you and the seller file the section 167 election on Form GST44. Ontario repealed its Bulk Sales Act in 2017, so your protection against the seller’s debts comes from searches, holdbacks and your lawyer.
Step 1: Decide what you are actually buying
A restaurant sale is one of two deals. In an asset purchase you buy the equipment, the name, the recipes, the phone number and the right to take over the lease, and you leave the seller’s company behind. In a share purchase you buy the company that owns all of that, with its history attached. Many small restaurant deals are structured as asset purchases, because buyers do not want to inherit a stranger’s tax returns and lawsuits, but the choice changes the tax, the licences and your financing. I cover it in detail in asset purchase vs share purchase for restaurant buyers.
Then decide what you are really paying for. A restaurant is three things: the location (really the lease), the equipment and build-out, and the trade that walks through the door. The trade is the goodwill, and it is only worth what the lease lets you keep. If the lease has two years left and no renewal right, you are not buying a business; you are buying a kitchen with a deadline.
Step 2: Get the numbers and test the price
Before you fall for the room, ask for the numbers a serious seller should produce: at least two or three years of financial statements, the HST returns for the same period, point-of-sale reports, a list of equipment with what is owned and what is leased, and the lease itself. Compare sales on the HST returns with sales in the statements. They should tell the same story.
There is no published multiple that tells you what an Ontario restaurant is worth. The price has to come from what the business earns for an owner-operator, what it would cost you to build the same room from scratch, and how many years of lease stand behind it. I walk through that in how much to pay for a restaurant in Ontario.
The AI restaurant valuation tool below gives you a price range from the numbers a seller should be able to show you, so you can test an asking price before you make an offer.
Step 3: Sign an offer with the right conditions
The offer is where a buyer is strongest, so put your protections in it. A buyer-side restaurant offer usually needs conditions for:
- Due diligence, with enough days to review the books, the equipment and the premises.
- Financing, if a lender is involved.
- Landlord’s consent to assign the lease to you, or a new lease on terms you accept.
- Liquor licence: the seller’s signed consent to the AGCO transfer and cooperation until it is issued.
- Franchisor approval, if it is a franchise.
- A training period, where the seller works alongside you for an agreed number of weeks.
- A non-compete so the seller does not open across the street.
Keep the deposit reasonable and held in trust, and make sure every condition is for your benefit so you can waive it or walk.
Step 4: Do the due diligence properly
Due diligence is where you prove the story you were told. Reconcile sales to bank deposits and HST returns. Walk the kitchen with a trades person. Pull the establishment’s inspection history on Toronto’s DineSafe site, which shows the past two years of results. Search the seller’s name in Ontario’s personal property registry, which costs $8 online, to see which lenders have registered claims against the equipment. Look the premises up in the AGCO’s public licence search to confirm the licence, its capacity and any conditions.
My full list is in the restaurant due diligence checklist for Ontario. Take it to your lawyer and accountant; they will add to it for your deal.
Step 5: Get the lease assigned
Almost every Ontario restaurant sits in leased space, and most leases say the tenant cannot assign without the landlord’s consent. Ontario’s Commercial Tenancies Act, section 23, says that consent is not to be unreasonably withheld, unless the lease expressly says otherwise, and a tenant or assignee can ask a Superior Court judge to decide. Many commercial leases do say otherwise, so read the clause before you rely on the statute.
Expect the landlord to ask for your financial information, a business plan, sometimes a personal guarantee, and a fee for its lawyer. Read the remaining term, renewal options, use clause, and who pays for the HVAC and grease interceptor. More in what buyers must check in a restaurant lease.
Step 6: Move the licences and permits
| Licence or permit | What happens on a sale | Cost (published) |
|---|---|---|
| AGCO liquor sales licence | Transfer to you, approved by the Registrar; conditions on the licence stay with it | $1,000 transfer; $1,000 share transfer |
| Toronto eating or drinking establishment licence | Not transferable; you apply for your own. No new zoning review if the existing licence is valid or expired less than three years ago in the same category | $268.32 application + $268.32 licence |
| Public health | Anyone who intends to start operating a food premise must notify the medical officer of health (HPPA s. 16(2)) | No fee published |
| Toronto sidewalk café permit | Transferable, but a transfer may shrink the permit area to meet current by-laws | $1,016.55 application; $44.14 + HST per m² |
Sources: AGCO fee schedule, City of Toronto licence and permit pages, Health Protection and Promotion Act. On the liquor side, you may operate the bar before the transfer is issued only under a Registrar-issued Authorization to Contract Out. Details in buying a restaurant with a liquor licence and, from the seller’s side, how the liquor licence transfer works.
Step 7: Staff, tax and closing
Staff. Under section 9 of the Employment Standards Act, if you buy the business and employ the seller’s employees, their employment is deemed not to have ended and their years with the seller count as years with you. That matters for any future notice or severance. See taking over restaurant staff.
HST. Ontario’s HST is 13 percent. On an asset purchase it applies to the price unless you and the seller make the section 167 election on Form GST44. The election needs you to acquire all or substantially all (CRA says at least 90 percent) of the property needed to run the business, and if the seller is registered, you must be too.
Seller’s debts. Ontario repealed the Bulk Sales Act on 22 March 2017, so there is no statutory process protecting a buyer from the seller’s creditors. Your lawyer will rely on searches, statutory declarations, direction of funds to pay off registered lenders, and a holdback where needed.
Closing. On closing day you pay, the seller’s lenders are paid out from the funds, the lease assignment is signed, and you walk through with an inventory count.
Where I fit
I help buyers across Toronto and the GTA find restaurants, read the numbers and the lease, and put the right conditions in the offer, then I work alongside your lawyer and accountant to closing. If you are looking, or already have one in mind, book a call or phone 833-330-1925.
Free tool — AI restaurant valuation
Restaurant valuation
What is your restaurant
actually worth?
Restaurants don’t sell on revenue — they sell on what the owner takes home, multiplied by how easy the business is to hand over. Your lease and your rent do more damage or more good than anything on the menu. This weighs all of it in about two minutes.
Reading comparable restaurant sales…
Indicative business value
—
$0$0
Most likely sale price $0 · Implied multiple 0×
Where I’d list it
$0
Comparable restaurants sell for about 85% of asking. Price to that, not to hope.
How the number is built
Your owner earnings, multiplied by what buyers pay for a business like yours — then adjusted line by line.
What the market pays
Benchmarks from completed restaurant sales.
What a buyer will ask for
- Three years of financials — statements and tax returns, not just POS reports.
- The lease, with the assignment clause and every option in writing.
- Proof of your add-backs. Lenders reject the ones you cannot document, and that is the single biggest reason deals reprice.
- Equipment list showing what is owned outright and what is leased or financed.
- Licences — AGCO, food premises, patio, and whether each one transfers.
- WSIB, HST and payroll accounts in good standing.
Want the number a buyer
would actually sign?
Send me three years of financials and your lease and I will price it properly — normalised earnings, real comparables, a defensible asking price and a confidential marketing plan that never tips off your staff or your landlord.
Frequently asked questions
What are the steps to buy a restaurant in Ontario?
Choose asset or share purchase, review the seller’s statements and HST returns, sign an offer with conditions (due diligence, financing, landlord consent, licence transfer), complete due diligence, get the lease assigned, transfer the AGCO licence and apply for your own municipal licence, then close with your lawyer handling payouts and the HST election.
Does a liquor licence transfer when you buy a restaurant in Ontario?
It can, but not automatically. The AGCO Registrar must approve a transfer to you, the fee is $1,000, and you cannot run the licensed business until you have either the transfer or an Authorization to Contract Out from the Registrar. Any conditions on the licence stay with it.
Do I need a new business licence if I buy a restaurant in Toronto?
Yes. Toronto’s licensing by-law says licences are not transferable except as the chapter allows, so the buyer applies for its own eating or drinking establishment licence. A new one costs $268.32 to apply plus $268.32 on approval. You skip the zoning review if the existing licence is valid or expired less than three years ago in the same category.
Is there HST when buying a restaurant in Ontario?
On an asset purchase, 13 percent HST applies unless the buyer and seller make the section 167 election on Form GST44. The election requires the buyer to acquire at least 90 percent of the property needed to run the business. Share purchases are generally not subject to GST/HST.
Does Ontario still have a Bulk Sales Act?
No. Ontario’s Bulk Sales Act was repealed on 22 March 2017. Buyers now protect themselves from a seller’s debts with personal property searches, payouts directed from the purchase funds, seller declarations and holdbacks, set up by their lawyer.
How long does it take to buy a restaurant in Ontario?
There is no fixed timeline. The pace is usually set by the landlord’s consent and the AGCO transfer, and the AGCO does not publish a processing time for transfers. Build the landlord and licence steps into your offer conditions and closing date rather than assuming a number of weeks.
Sources
- AGCO — Section 7: Transferring a liquor sales licence — transfer documents, Authorization to Contract Out, tax clearance
- AGCO — Liquor licensing fees — transfer $1,000; share transfer $1,000; new licence from $925
- O. Reg. 746/21 (Licensing) under the Liquor Licence and Control Act, 2019 — Part XI, ss. 154–158, licence transfers
- City of Toronto — Eating or drinking establishment licence — $536.64 new; zoning review rule for takeovers
- Toronto Municipal Code, Chapter 545, Licensing — § 545-5 E, licences non-transferable
- Health Protection and Promotion Act, R.S.O. 1990, c. H.7 — s. 16(2), notice to the medical officer of health
- Commercial Tenancies Act, R.S.O. 1990, c. L.7 — s. 23, consent to assign
- Employment Standards Act, 2000 — s. 9, sale of a business
- CRA — GST/HST Memorandum 14.4, Sale of a business or part of a business — section 167 election
- CRA — Buying a business — 90% test; share purchases generally not subject to GST/HST
- Bulk Sales Act, R.S.O. 1990, c. B.14 (repealed) — repealed 22 March 2017
- Government of Ontario — Register a security interest or search for a lien — PPSA search, $8
Related reading
- How much to pay for a restaurant in Ontario
- Restaurant due diligence checklist
- Buying a restaurant with a liquor licence
- What buyers must check in a restaurant lease
- Financing a restaurant purchase
- Red flags when buying a restaurant in Toronto
- How to sell a restaurant in Ontario (seller's view)
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Toronto. I work with buyers and sellers across Toronto and the GTA and have helped more than 100 families sell. Four-plus years of active GTA transactions and over $100 million in sales volume. Every figure here comes from a published table, regulator or statute linked in the sources, so you can check all of it without asking me.
Reach me at connect@jatindua.com or 833-330-1925, or book a call.