What to Look for When Buying a Restaurant Business

When people are looking to get into the hospitality industry, they often make the assumption that they’ll need to start from scratch: come up with a concept, lock down real estate, purchase equipment, build a team — the list goes on. But that’s not always necessary.

Buying an existing restaurant business can allow restaurateurs to jump right into daily operations, without a lot of the legwork that’s required when you’re just starting up.

Buying a restaurant isn’t exactly risk-free, though — and it comes with its own set of challenges. If you have dreams of running your own restaurant or bar (or if you’re already in the biz and want to explore other options), here’s what to know about making a restaurant acquisition.

6 benefits of buying an existing restaurant

We’ll start with the upsides to buying an existing concept, versus getting your own off the ground. The running theme here is that the groundwork is laid, so a lot of those big decisions, and investments (as well as all the time and brainpower they require) are often already taken care of.

1. You might have a ready-made team

The recruiting and hiring process is a big part of launching a restaurant, and the team you build can have a direct impact on your success. But finding (and retaining) good talent is tough: the hospitality labor market has been extremely competitive in the past few years. It can be hard to find qualified, reliable employees who work well together.

When you buy an existing restaurant, you’ll likely already have a team (and a team culture) in place. While you may find there are some kinks to work out or changes to make once you get a feel for overall strengths, weaknesses and gaps, having a team who knows their role and each other can save you a lot of headache.

2. You don’t have to play the real estate game

You know what they say: location, location, location…can be a nightmare to find. Another perk of buying an existing restaurant is that you may not have to go through the grueling process of finding a good restaurant location.

While a previous owner may be selling an existing restaurant because the lease is expiring, this isn’t always the case. In many instances, existing leases sell at below market value. If you have to buy a new lease, the landlord can reset it to a price that’s consistent with the going market rate, which means essentially, that you’ll be charged more.

Our advice: take advantage of an existing lease to save money. But be sure there is enough time left on the lease to recover your expenses. Also, make sure it will protect you from unexpected liabilities.

3. You might be able to leverage current operating licenses

Applying for operating licenses when you open a restaurant can often be a monumental task (check out our post on getting your liquor license, if you haven’t already!). When you’re looking at buying a restaurant, you may be able to use the existing license while your applications are processing, saving you a good chunk of time and money.

4. You have access to equipment and other physical assets

One of the biggest benefits of buying an existing restaurant is that it will already come with the equipment you’ll need to operate the business, as this is a costly and time-consuming expense. (Keep in mind, though, that the state of the assets will likely be reflected in the purchase price.) Some of the equipment and machinery you’ll most likely find include:

An HVAC system
A fully-operational kitchen
Code-required fire-prevention system
A ventilation system

Of course, you’ll want to evaluate the equipment to make sure it’s in proper working condition. Hire a professional to inspect it if necessary.

Something else to think about is whether the restaurant equipment is owned or was being leased by the previous owner. If it was leased, be sure whatever contract was negotiated can be easily transferred to you with the same terms and conditions. Some questions to ask about previously-owned equipment are:

When was the equipment purchased?
Are there any current issues?
When was the equipment last repaired?
Is any of the equipment still under warranty?

5. You’ve got an existing customer base

Because the restaurant you’re interested in buying has already been in operation, it’s (probably) already got a built-in customer base. While this doesn’t necessarily mean you’ll spend less on marketing and advertising — that’s usually necessary whether you want to maintain or grow your business — it does mean there’s a little less risk involved. That is, have a general idea of what to expect in terms of volume, whereas opening a new restaurant is always a gamble.

6. Less financial risk

Generally speaking, it costs less to buy an already established restaurant than starting a new one, especially when you consider the risk you’re mitigating and the time you’re saving compared to launching your own restaurant.

Questions to ask before buying a restaurant

Just like you would before any big purchase or investment, you need to do your due diligence prior to buying a restaurant business. (In fact, it’s never a bad idea to consult a professional advisor, like an attorney, business broker, or even an M&A advisor, depending on the size of the transaction.)

While this certainly isn’t an exhaustive list of questions to ask, here are a few to get you started. And remember: don’t just rely on the previous owner’s answers. Make sure you’ve got access to financial/accounting records, contracts, permits, etc., and do your own market research so you get a clear, accurate picture of the state of the business.

Why is the owner selling the restaurant?

This should be the first question you ask. Maybe the owner wants to pursue other career opportunities or retirement — but there could also be some operational, financial, or team issues that you need to know about. They might not be dealbreakers, but just like you’d inspect a home before you buy it, you certainly want to know the good, the bad and the ugly before you sign on the dotted line.

How is the restaurant performing?

A common practice when looking at buying a restaurant is getting access to any and all financial records the previous owner has kept. This will help provide valuable insight into the state of the current business.

A (very) general rule of thumb is that many restaurants are valued at three to five times the yearly profit — but of course, that’s highly dependent on a wide range of variables. (Here again, it’s helpful to have an advisor who’s been through the process before to help answer questions around business value.)

What’s the competitive landscape like?

Which restaurants does your target compete against? How do you stand out among them? How do you expect that to change in the next 3-5 years? It’s not a bad idea to do a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to get a really good understanding of how the business is positioned in the market.

Which employees can you expect to stay on after the transition?

When you’re buying a restaurant, it often comes with employees who have a history with the establishment. But sometimes when a new owner comes in, it can change the culture (for better or worse). Plus: some employees — especially key employees — may have developed strong working relationships with the owner. All of this can lead to personnel shifts. Some may be inconsequential, but if a chef or top managers chooses to leave, that could have a direct impact on the business.

You can probably get good insight from the seller, but as soon as you’re ready to let the rest of the team know about the potential (or pending) sale, have some very candid conversations with the current employees and get a feel for culture, chemistry, and their willingness to stay on board.

Red flags and mistakes to avoid

While there are plenty of good reasons to buy a restaurant, that doesn’t mean there aren’t potential roadblocks to consider. When looking to buy a restaurant, you have the right to know about any past problems that affected the business. Here are some things to watch out for:

Liabilities and legal issues

Before you make your purchase, make sure there are no existing issues, legal or otherwise — like health code violations, unpaid taxes, ongoing litigation, etc. If there are, they could become your problem. You’ll also be responsible for all financial obligations so it’s vital you have a clear picture of the business’s financial history.

The restaurant’s reputation and brand

If you’re serious about buying a particular establishment, you’re likely already aware of any serious reputation/brand issues. But just in case: make sure you know how the business is perceived and whether it’s something you’d like to address.

For example, maybe the restaurant you’re buying is geared more toward business professionals, but you’d like to make it a hot weekend spot; or perhaps you get a lot of college kids and you want it to become more family friendly. Even if you’re buying a fixer-upper and you’re well aware that the brand needs work, it’s still worth understanding what needs to change. So: dig into review sites like Yelp, check out social media pages, or even do some research on your local Subreddit and other local online communities.

Refusal to sign a non-compete

While this doesn’t have to make or break the deal, if the owner declines to sign a non-compete agreement—a contract stating that employees will not start their own version of the restaurant you’re buying in direct competition—it’s something to be wary of. This is especially true if the owner is also the chef, which means he or she might be able to take the recipes and menu concept with them, forcing you to start over and create your own.

To launch or to buy?

Launching your own concept is exciting — and it puts you in the driver’s seat. Like building your own home, you get to have a say in every single decision from the get-go.

But it also takes time, money, and a whole lot of patience. If your goal is to simply get into the restaurant business and you don’t have a concept that you’re set on bringing to life, consider feeling out the market and seeing what’s out there. When you ask the right questions and do your due diligence, buying a restaurant can be just as rewarding (personally and financially) as starting your own.

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Product and Company News, Technology and Software

New Kickfin Feature Alert: Blended Payouts Are Here!

Brand new feature, coming in hot!

As part of our latest product release, Kickfin now offers Blended Payouts for even easier, fully automated tip management and reconciliation.

Why Blended Payouts Matter

Now more than ever, restaurant guests use credit cards or digital payment methods instead of cash. For many operators, that means there isn’t enough cash on hand at the end of a shift to pay out tips. But employees still want to receive their payouts immediately after clock-out.

As our customers know, Kickfin solves for those cash shortages by automating and digitizing the payout process — giving you the power to send instant, cashless payouts directly to your employees’ bank of choice, 24/7/365.

The result: minimal cash handling and risk, better accuracy and tracking — and of course, fewer bank runs.

However, digitizing payouts often results in some leftover cash in the drawer. Over time, we’ve heard from customers who prefer to use up that cash to pay out tips, then distribute the remaining tip amounts via Kickfin.

With Blended Payouts, you can do just that — and still account for every penny paid out, quickly and accurately, within the Kickfin platform.

How Blended Payouts Work

As always, all Kickfin customers can still choose to split individual payment amounts between instant payouts and payroll. Once you enable the new Cash Payouts feature, you will now be able to account for any cash tip payments that were also distributed.

Note: This feature lives within Kickfin’s Tip Calculator, which means you must have an active POS integration to use it.

Once it’s enabled, you’ll see the new “Cash Payouts” button on the Payment Review screen.
After clicking the button, users will be able to enter the individual cash amounts that were distributed to employees.
Back on the Review screen, you’ll see instant payout, payroll, and cash payment amounts for each employee. All three payment methods will have their own line items and be accounted for under your Payment Details.

Watch here for a full walkthrough of the new feature.

Ready to enable Blended Payouts?

If you’re a current customer, in touch with our Customer Success team at support@kickfin.com to activate this new feature.

(Not a customer yet? Click here to see Kickfin in action and learn how you can automate tip pooling and payouts!)

Product and Company News, Technology and Software

Kickfin Partners with Union POS to Automate Tip Distribution for High-Volume Bars and Restaurants

Kickfin is excited to share the latest addition to our integration marketplace. Read on for all the details around our partnership with Union POS. (If you’re a current Union POS customer and you’d like to learn more about how Kickfin automates tip pooling and payouts, schedule a live demo here.)

AUSTIN, Texas (August 13, 2025)—Kickfin, the leading tip management software, today announced the launch of its integration with Union, the purpose-built POS and engagement platform powering the nation’s busiest bars, nightclubs and restaurants.

Thousands of operators use Kickfin to eliminate tedious tip calculations and remove cash from the tip distribution process so managers can move faster, track everything, and ensure accuracy and compliance.

By activating the Kickfin-Union integration, we eliminated clunky spreadsheet formulas and fully automated our tip pooling process. After going live, we reduced our time to close out by an average of 30 minutes after every shift.

The Kickfin-Union integration gives Union’s customers the power to auto-calculate tip pools in a matter of clicks and send payouts directly to employees’ bank of choice—no cash or pay cards required.

“By integrating with Kickfin, we’re giving operators the power to choose best-in-class tools that work seamlessly with their Union POS and data,” said Alex Broeker, the CEO and founder of Union. “This direct integration brings automated tip management to our operators while unlocking new opportunities for operational efficiency, employee satisfaction and simplified compliance.”

KPG Hospitality, which operates experiential bars and unique concepts throughout Texas and Tennessee, was among the first operators to activate the Kickfin-Union POS integration.

“Our venues run at a very fast pace. When you consider the time it takes managers to manually calculate tip amounts every day, after every shift, across every location, it’s a lot of unnecessary admin hours,” said Troy Cramer, the managing partner at KPG. “By activating the Kickfin-Union integration, we eliminated clunky spreadsheet formulas and fully automated our tip pooling process. After going live, we reduced our time to close out by an average of 30 minutes after every shift.”Key Features of the Union + Kickfin Integration:

Automated Tip Pool Calculations: Calculate complex tip pools in seconds, saving managers hours of administrative work while ensuring accuracy and transparency.
Instant Cashless Payouts: Pay out tips directly to employees’ bank of choice instantly, eliminating the need for cash handling and bank runs.
Simplified Compliance: Maintain a digital record of every payout, making tip reporting and tax compliance straightforward.
Enhanced Tracking: Easily track tips by pay period with comprehensive reporting capabilities.
Streamlined Operations: Implement complex tip policies with just a few clicks through an extremely easy-to-use interface.

“Our integration with Union, a leading POS system built specifically to support the busiest venues in the industry, makes perfect sense,” said Kickfin co-CEO Brian Hassan. “Together, we’re creating a solution that saves time, reduces errors, and delivers a better experience for both operators and their staff.”

Available immediately through both Union and Kickfin, venues can integrate their systems and begin leveraging these capabilities today. To learn how this partnership can transform your tip management operations, schedule a demo at GetUnion.com or kickfin.com/demo.

About Union
Union powers a first-of-its-kind venue operating system purpose-built for the nation’s busiest bars and restaurants. More than a point-of-sale, Union connects 1,500+ establishments with 5M+ consumers and leading brands through real-time consumption data. The platform drives operational efficiency, enables frictionless mobile ordering, and facilitates brand-patron interactions that enhance venue loyalty. With $2B+ in annual transactions, Union creates a virtuous cycle where venues improve customer experiences, brands gain direct consumer engagement, and patrons enjoy personalized rewarding hospitality—transforming high-volume operations into next-gen guest experiences. To learn more about Union, visit http://www.getunion.com

About Kickfin
Kickfin is a leading digital tip management platform that automates tip pool calculations and delivers cashless tip payments directly to employees’ bank accounts. Designed to eliminate the administrative burden of tip management, Kickfin helps restaurants, bars, and hospitality venues save time, reduce errors, and improve employee satisfaction. With features like instant payments, digital record-keeping, and simplified compliance, Kickfin is transforming the way venues handle tip distribution in today’s increasingly cashless economy.

Industry Trends, Restaurant Management

Kickfin vs. TipHaus: Which Tip Management Software is Best for You?

If you’re in the market for tip management software, you might find yourself comparing Kickfin and TipHaus.

Kickfin is the largest provider of instant tip payouts on the market and has processed more than $2 billion in employee payments for all kinds of restaurants, from “mom-and-pops” to national franchises — and everything in between.

Kickfin and TipHaus are both designed to digitize tip distribution for restaurants. However, there are some significant differences between the two platforms that you’ll want to consider before making a decision.

Kickfin and TipHaus: Compare at a Glance

Why Do Operators Choose Kickfin Over TipHaus?

Kickfin Offers Better Pricing

Kickfin’s direct-to-bank transaction fees are more competitive than the transaction fees TipHaus quotes their customers.

This is primarily due to the fact that Kickfin is the largest provider of instant payouts in the country (validated by Visa and MasterCard data), with more than $2 billion in employee payments and multiple payment processor relationships.

Employees Prefer Kickfin

Kickfin was built to make life easier not just for operators, but also for their employees.

No app downloads: Kickfin only requires a one-time, 30-second enrollment for employees. (No app downloads or extra phone storage needed!) Payment history and reporting data can be viewed as needed simply by logging into their browser.
No paycards required: Kickfin also doesn’t require pay cards, while TipHaus offers “HausMoney” as a primary payout option for employees. HausMoney is essentially a pay card that employees’ tips are loaded onto. Funds aren’t available to use until the following day. HausMoney may be free for operators, but many employees don’t want to be forced to use a pay card due to the hassles of transferring funds to their own bank accounts, as well as the transaction fees and wait times they may incur. They’d prefer their earnings streamed to their accounts instantly, after every shift—which is how most Kickfin customers choose to pay out their employees.

Zero Prefunding* With Instant Payouts

With Kickfin, customers can send instant, direct-to-bank payouts with zero prefunding required.* While TipHaus does offer zero prefund, employee payouts must be sent to a TipHaus paycard (HausMoney). In other words, if you want to use a zero prefund option with TipHaus, you won’t be able to offer instant, direct-to-bank payouts to your employees.

Option to Manually Input Tip Data

With TipHaus, a POS integration is required, and all tip payment data is generated by the software’s tip calculator.

Kickfin was designed for ultimate flexibility. While many customers use Kickfin’s POS integration to auto-calculate tip amounts, some restaurants don’t need automated tip calculations and prefer to use Kickfin unintegrated. That isn’t an option with TipHaus.

Additionally, some Kickfin customers use Kickfin to auto-calculate tip pools, then manually upload other tip data on an as-needed basis. This comes in handy when you need to pay out “extra” staff, like entertainers, security guards, etc.

Easy, Accurate Distribution of Auto-Gratuities and Service Charges

Kickfin tracks Tips and Auto-gratuities separately. As a result, you can report those types of payments to payroll separately and handle them independently for tax purposes.

Why does that matter? In light of the 2025 “No Tax on Tips” legislation, tipped employees no longer have to pay federal income tax on the first $25,000 in tips earned each year. However, they do need to pay taxes on earnings from services fees, autogratuities and other compulsory charges that are not considered tips by the IRS.

(If 100% of your service charges does not go to your employees, Kickfin allows the “house account” to retain a portion of service charges, while the rest is distributed to your team.)

Enhanced Tip Calculation Functionality and Features

Kickfin’s Tip Calculator was designed to be both highly robust—so it can handle the most complex tip pooling policies—while also being incredibly simple and intuitive to use.

A few unique things about Kickfin’s Tip Calculator:

No data sync delays: Tip calculations are immediate and on-demand. With Tiphaus, a data sync process is required which can add extra time to your tip calculation process.
Built-in flexibility: Kickfin releases new Tip Calculator features on a regular basis based on feedback we regularly source from customers. For example, Kickfin now offers check splitting for both individual checks and groups of checks, making it easier to handle large parties and events.
Ease of use: Customers regularly shout out our sleek, high-quality user interface compared to other platforms. Notably, we’ve made it easy for managers to review all details before hitting “submit,” ensuring the accuracy of every payout.

Cash Tip Tracking and Payouts

Many operators choose Kickfin because they don’t have enough cash on hand to pay out credit card tips, and they want to reduce the amount of cash handling in their restaurant altogether.

However, we know cash will probably always be (a small) part of the equation. Kickfin makes it easy for you to handle that with some added functionality:

Tips left in cash: If a diner leaves a pile of cash at your table, it might not get recorded in your POS. However, Kickfin allows you to record it and distribute it through our platform.

Cash payouts: Many operators may want to distribute all of the cash left in their register at the end of a business day to avoid bank runs. Again, that’s easy to do with Kickfin.

Multiple Payment Processors for Guaranteed Deliverability

For many employees, especially those living paycheck to paycheck, it’s critical that they receive their tip earnings and that they’re instantly accessible/ready to use.

TipHaus uses only a single processor. Kickfin uses multiple payment processors to ensure deliverability of payouts should a processor experience a disruption or become insolvent.

Direct POS Integrations

All of Kickfin’s POS integrations are direct API integrations, while TipHaus has been known to utilize third-party software to integrate with some POS systems. The problem with third-party software is that it can be susceptible to more connectivity issues, creating problems with data reliability.

Top-Ranked Customer Support

Kickfin has an award-winning Customer Success team that is exclusively focused on helping our operators get the most value possible out of Kickfin.

Every member of our team is based in the U.S. We provide free, personalized training and onboarding for your whole team, and when questions or issues arise, we can be reached by phone, email, text or chat. We also have a robust library of support documentation and videos that provide step-by-step guidance for every aspect of the platform.

Credibility and Recognition

At the end of the day, Kickfin’s large and fast-growing customer base speaks for itself, as do their rave reviews of the platform.

For multiple years, Kickfin has been the only tip management software that is recognized on both the Inc. 5000 and Deloitte Fast 500 lists. Kickfin has received recognition from peer software review sites like G2 and Capterra for consistently high customer rankings and reviews.

*Zero prefund is available to select customers after a credit review to confirm their fit with the zero prefund program.

Ready to take the next step?

See why thousands of restaurant pros use Kickfin to auto-calculate tip pools and pay out tips in real time, no cash or math required! Get a demo today.

Industry Trends, Restaurant Management

FAQ: What the “No Tax on Tips” Act Means for Restaurant Operators and Your Restaurant Team

We’ve been talking about “No Tax on Tips” for months, and now it’s a reality. But what exactly does that mean for restaurant operators and their tipped employees?

Signed into law on July 4, 2025, as part of the broader “One Big Beautiful Bill” tax package, the new policy eliminates federal income tax on tipped earnings (up to a cap…along with some other caveats…) for qualifying workers.

While No Tax on Tips garnered widespread support from hospitality employees and employers alike, there’s still a lot of confusion about how it works, who qualifies, and what it means for your restaurant team.

Our FAQ breaks it all down: the fine print, the benefits, the limits—and how you can make sure your team is positioned to take full advantage.

What does “No Tax on Tips” actually mean for my team?

The No Tax on Tips Act has created a new federal income tax deduction — up to $25,000 of “qualified tips” per year for employees in traditionally tipped occupations.

Tipped employees can deduct up to $25,000 in tips from their federal taxable income. (For added context, based on Kickfin customer data, the average tipped employee earns $125 per shift and works 15 shifts per month. That totals $22,500 in annual tip earnings.)
The deduction starts to phase out at $150,000 in annual income.
The deduction is currently restricted to those who earn $160,000 or less in 2025, but that’s expected to change in coming years to account for inflation.
These earnings are assessed based on employees’ income as of December 31, 2024.

Two other important items to note:

Deduction, not exclusion: This is a deduction, not an exclusion. That means all tips still need to be reported; the deduction will be claimed when your employees file their taxes. The deduction is on top of the standard deduction ($16,000 for individuals, $32,000 for married couples filing jointly).
Other taxes still apply: This bill is all about federal income taxes, so Social Security and Medicare taxes still apply. Also, keep in mind that this is a federal tax deduction. States will individually decide whether or not to align with the change.

Which types of tips are eligible?

The bill applies to cash tips—but it’s technically a little broader than that. According to the Senate Finance Committee, “cash tips” includes:

Physical cash tips
Credit card tips
Tips shared through pooled or tip-sharing arrangements

Other types of charges and fees that restaurant customers pay are not eligible for the dedication.

Mandatory service charges
Surcharges
Automatic gratuities

Essentially, any earnings from compulsory charges are not considered tips. Even if a restaurant passes those funds on to employees, they’re not eligible for the deduction. Do employees have to report their tips to get the deduction?

Short answer: Yes. And aside from being legally required to fully report their tip earnings, it actually behooves them to do so.

It’s no secret that many tipped employees don’t fully report their tip earnings. There are a variety of reasons for this: general confusion about tip reporting, poor tracking, and of course, a desire to avoid taxes.

Credit card tips are automatically tracked in most POS systems, so those are typically accounted for. Cash tips, on the other hand, are often underreported.

Again, because this new bill is a deduction, not an exclusion, employees must report their tip earnings to qualify.

Not only will this (legally) allow employees to reduce their tax burden; reporting their full income can really come in handy with things like loan applications, unemployment benefits, and Social Security earnings.

Is this all good news for employees?

Again, for the most part in the hospitality and service industry, there’s a lot of support for this legislation.

It will put money back in the pockets of many tipped employees—which can make a meaningful difference, especially for those who live paycheck to paycheck.

But some in the industry have voiced concerns:

Lowest-earning tipped workers won’t see much benefit. Many of the lowest-earning tipped workers wouldn’t benefit much, or at all.because they’re not paying a significant amount in federal taxes to begin with.
Some workers excluded: Not all hospitality employees are tipped employees – if you’re not operating a tip pool for example, a lot of your BOH employees aren’t going to see any benefit here.
Service/surcharges/auto-gratuity: Compulsory charges are not considered tips, so even if all of those funds are going to the employees, they will still be taxed. Again, that means BOH workers who aren’t tipped but who benefit from service charges won’t get a tax break.

What do restaurant operators need to do?

While there’s no major compliance burden on employers (yet), the smartest operators are thinking ahead—especially when it comes to digitizing tip management.

Here’s why that matters:

Accurate reporting: Employees need clear, auditable records to claim the deduction
Transparency: With platforms like Kickfin, employees can log in to view their full payment history—no guesswork required
Tip pooling: If you want your BOH team to benefit, you’ll need to operate a formal, compliant tip pool.
Efficiency: Automating tip pools (and ensuring accuracy), managing payouts, and syncing with payroll is easier than ever.

Is it time to hit the reset button?

If you’re already using a digital tip management platform like Kickfin, you’re a step ahead—your team will be well positioned to take full advantage if and when the law goes into effect.

If not: This new policy is a great reason to refresh your tip management approach, including digitizing your distribution process, re-evaluating your tip pool policy, and improving payment tracking for your team. And good news—Kickfin can help with all of that. Let’s talk.