Buying a restaurant in France

The main ways to acquire a restaurant

a) Buy the “fonds de commerce” (business assets). You purchase the trading assets: name, clientele, equipment, goodwill, sometimes the right to the lease, and staff transfer by law. This is the most common route in hospitality.

b) Buy the shares (titres) of the company (SARL/SAS). You keep the legal entity (including all its past liabilities). Useful if there are valuable contracts, licences, or tax positions—but you’ll do deeper due diligence.

c) Take over a “droit au bail” (leasehold right). You pay to take the commercial lease but not the business (no clientele, no equipment, no staff). Works when you want to install your own concept in a proven location. See also “pas-de-porte” (key money) in French practice.

Licences, permits & hygiene: what’s non-negotiable

Alcohol & restaurant licences. If you serve alcohol with meals only, you need either a Petite licence restaurant (beer, wine, cider, etc.) or a Licence restaurant (includes spirits). If you want bar service (alcohol without meals), you need a Licence III (wines/beer) or Licence IV (spirits). Before opening, you file a declaration in the town hall at least 15 days before (Cerfa 11542/11543).

Permis d’exploitation (alcohol awareness certificate). Mandatory for licence holders; obtained after an accredited training (usually ~20h over ~2.5–3 days for first-timers). It’s valid for 10 years, then renewed with a short refresher. You submit a valid permis with your licence declaration.

Food hygiene & DDPP. At least one person in every commercial restaurant must have the specific food-hygiene training (distinct from HACCP “method”) and you must declare any activity handling products of animal origin to the DDPP (local food-safety authority) before opening (online or Cerfa 13984). France’s “Alim’confiance” portal publishes inspection results—use it when you’re scouting sites.

Safety & accessibility (ERP – établissements recevant du public). Restaurants are ERP “type N.” Expect fire-safety obligations (extinguishers, signage, safety register, annual checks) and accessibility rules for disabled customers; older premises may need works or documented compliance.

Extras you may need.

• Terrace on public land: separate municipal authorisation (redevance).

• Background music / TV: SACEM (and related) rights/fees.

• Display rules (prices, mandatory notices; allergen information under EU Reg. 1169/2011; beef origin and other consumer info): enforced by DGCCRF.

VAT (TVA) in restaurants (know your rates)

• Food eaten on site: 10% VAT (alcohol is always 20%).

• Take-away / delivery: generally 5.5%, but if the product is prepared for immediate consumption (hot pizza delivered, etc.), it’s 10%. Alcohol to go: 20%.

The lease (bail commercial 3-6-9): non-negotiables to check

• Duration typically 9 years with exit windows every 3 years; a protected right to renew or compensation if refused (eviction indemnity).

• Watch destination of the premises (authorised use), extraction/venting, noise constraints, opening hours, terrace clauses, indexation, charges, deposit, and any subletting or assignment restrictions.

• “Droit au bail”/“pas-de-porte” can add significant cost in hot locations.

People & payroll: what transfers, what applies

If you buy the fonds de commerce, all current employment contracts transfer automatically to you by law (article L1224-1), with seniority and terms preserved. The HCR national collective agreement (IDCC 1979) governs many sector specifics (hours, premiums, classifications). Budget for onboarding, uniforms, medical checks, and training.

Due diligence—what to verify before you sign

Legal & administrative

• Licence category and permis d’exploitation validity; prior mairie filings.

• DDPP declaration receipts; last inspection reports; any non-compliance notices; check Alim’confiance history.

• Fire-safety register, maintenance logs (hood/extractor, gas, extinguishers), and accessibility documents.

• Commercial lease: clauses, rent/charges, renewal date, landlord consent for assignment, permitted use (“destination”).

Financial & tax

• 3–5 years of accounts, VAT returns, payroll, supplier contracts, utilities, waste-oil collection, pest control, linen, POS rental.

• Revenue mix (eat-in/takeaway/delivery), average ticket, covers, seasonality; prime cost (food + labour) and rent as % of sales.

Operations & assets

• Inventory and equipment list with serial numbers; ownership (leased vs owned) and maintenance records.

• Extraction and odour control compliance; grease trap servicing; waste management contracts.

Reputation

• Online reviews trend, local footfall, competitor mapping; Alim’confiance rating/dates.

Valuing a French restaurant

Small restaurants are often priced from a multiple of revenue and/or EBITDA, adjusted for location, terrace, licence type, and lease quality. In practice, sectors use barèmes (rules of thumb) by trade and % of annual turnover; your accountant will “normalize” earnings (owner wages, one-offs) and stress-test seasonality. (Local CCI and specialist brokers publish indicative ranges; treat them as a starting point.)

Deal process & timeline (fonds de commerce)

1. Offer / LOI with conditions precedent (financing, landlord consent, clean licences, no material adverse change).

2. Drafting by avocat/notaire; financing pack; landlord waiver/consent.

3. Signing (compromis or final act).

4. Legal publications (annonces légales + BODACC). Creditors then have 10 days to oppose payment of the price. Funds are usually held in escrow until creditor and tax windows close (commonly around 3–5 months in practice).

5. Handover & training; DDPP/mairie formalities; stock-take and meter readings.

   
   

Taxes & costs you’ll encounter

• Registration duty on a fonds de commerce sale (progressive scale) and notary/avocat fees.

• TVA treatment as above (10% on meals on site, 20% alcohol, 5.5%/10% take-away depending on immediacy).

• Ongoing costs: SACEM/music rights (if applicable), terrace fees, mandatory inspections, payroll charges, insurance (RC pro, multirisque).

UK/US expat notes (buying or directing a French restaurant)

• Immigration/Work: Non-EU owners who are hands-on need an appropriate long-stay visa/residence allowing self-employment/entrepreneurship (business plan, financial means, etc.).

• Company form: SAS/SASU and SARL/EURL are common. Speak with a French expert on payroll/social charges and dividend options.

• Banking & payments: French banks will insist on in-person KYC; set up a merchant account and French card terminal; clarify tips (“pourboires”) handling in your payroll software.

• Accounting: Hospitality needs tight daily cash/POS controls and inventory; set VAT filing cadence and monthly dashboards from day one.

First-90-days operational checklist

• Change utility contracts, waste-oil collection, pest control, linen, cash collection, card terminal; reset POS tax parameters (TVA mapping).

• Refresh food-safety plan (HACCP logs), temperature checks, allergen matrix, supplier specifications; book staff hygiene training if missing.

• Inspect/maintain extraction, extinguishers, emergency lighting; update the safety register; schedule the fire-safety visit if required.

• File/confirm mairie declaration (licence), terrace permit, and music rights if applicable.

• Review menus & pricing to align with VAT rules (e.g., alcohol @ 20%); configure POS accordingly.

• HR: issue contract transfers, register with payroll, apply the HCR convention; align rotas to demand.

Typical pitfalls (and how to avoid them)

• Assuming the licence “comes with the walls.” Licences are regulated—verify the category, validity of the permis d’exploitation, and timely mairie declaration in your name.

• Underestimating compliance catch-up. Small items (hood cleaning, gas checks, safety register, DDPP paperwork) can add up quickly; cost and calendar them.

• Lease traps. Hidden works obligations, use limitations, or assignment bans can sink your concept—have a specialist review the bail.

• Cash flow during escrow. Expect several months before the seller receives the price due to legal publications and creditor/tax windows—plan your working capital.

Final tip

Line up three pros early—avocat/notaire (deal & publications), expert-comptable (valuation, tax, payroll), and a licensing/hygiene coach—and have them sanity-check your lease, licence route, VAT mapping, and day-one compliance list. It’s the cheapest insurance you’ll buy.