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How to Buy a Pizza Restaurant

Canadians love pizza! Find out how to buy a pizza restaurant and get a slice of the pie!

Canadians love pizza, and Ontario was even the birthplace of the Hawaiian pizza, which was first served in the early 60s. 

Despite there being a huge demand for pizza restaurants, it’s a highly competitive business. It will take dedication, confidence and knowledge to top the dominant franchise restaurants.

A buyer’s profile

As with many hospitality businesses, evenings and weekends are the busiest trading times, so be prepared to work during these periods, and throughout the holidays too. You need to be realistic and willing to sacrifice your social or family time, especially in the first few years. 

You also need to be good at managing a team and delegating authority; a lot of business owners try to do everything themselves, which can be impossible to maintain in the long run. Training and trusting your team to handle certain tasks within the business is vital. 

Qualifications in either hospitality, restaurant management or culinary arts, will also be beneficial. You should also have experience managing or working in a busy restaurant. And a passion for food, especially pizza and Italian cuisine, will also help.

Finance and statistics

There is a wealth of government-funded and private-sector financing options available for entrepreneurs who are keen to buy an existing business. The BDC (Business Development Bank of Canada) loan offers up to CA$100,000 and consultancy advice for first-time buyers.

There is also state-specific funding available across Canada; for example, the Women's Enterprise Centre offers financing options for women keen to start a business in British Columbia. A comprehensive list of financing options is on the Canada Business website.

Pizza restaurant opportunities across the country can vary considerably in price; successful, large, franchise restaurants will cost more than a small pizza takeaway business. Deciding whether to buy an independent business or franchise should be your first big decision. 

Pizza is proving to be a strong staple for Canadians, and despite a shift towards healthy eating, pizza restaurants are still performing well in today’s economy. Convenience is a top priority for many customers, with quick-service restaurant sales growing by 5.3% in 2017.

What to look for in a business

To compete against franchise giants such as Boston Pizza, you need to have a USP that sets you apart from the competition. Try to buy a restaurant that has built its success on offering something unique, such as imported Italian ingredients or eye-catching décor.

You should consider fixed factors such as location, the size of the premise and the competition in the area; these aspects will be reflected in the price of the business. Other points to consider is the value of the ovens and equipment that will be included in the sale.

What kind of reputation does the business have in the area? What are the current turnover and profit margins? You can buy a failing restaurant for a good price, but there is a lot of risk involved and it takes a seasoned entrepreneur to confidently turn the business around. 

Licences and permissions

The location of the pizza restaurant will determine which licences and permissions you will need, each municipality will have different regulations. Use the search tool on Canada Business to find out what permits you will need to operate legally.

You should be well-informed on food safety regulations, such as how to handle, store and prepare food. You will also need to research human resources regulations, which sets out your obligations as an employer to maintain the safety and wellbeing of your employees. 

Due diligence

If you have appointed a broker, they will help you conduct due diligence to make sure the business figures add up. Restaurants are typically valued on either asset or cash flow multiples, which will consider the annual turnover, asset value and freehold or lease value.

However, there are numerous methods used to value a restaurant; consider the hours of operation and factor in your costs, such as rent, stock and employee wages. Will the landlord transfer the current lease onto you, or will you have to negotiate new terms?

You should carry out thorough checks on the condition of the premises, the ovens and any equipment that will be sold with the business. Hire a professional to make any necessary inspections so you can factor in any potential renovation costs when you make an offer.

Krystena Griffin

About the author

Krystena Griffin writes for all titles in the Dynamis stable including, and as well as other industry publications.


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