Buying a café, bar or pub: what to check before you sign

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In short

• Before you sign, check four things: the liquor licence, the planning permit, the compliance history and the building and council approvals.
• The planning permit can cap what the licence can ever be. Check it before you rely on the vendor's trading figures.
• Make the contract subject to the liquor licence transfer, timed to settlement.
• Ask for the paperwork. A vendor who won't share correspondence with council or Liquor Control Victoria is telling you something.
• If you plan to change anything, such as hours, capacity or outdoor seating, check it's possible before you buy, not after.

What should be on a buying a hospitality business checklist?

A good buying a hospitality business checklist goes beyond the accounts and the equipment list. The value of a café, bar or pub depends on what it's allowed to do: its hours, its capacity, where it can serve liquor and whether any of that is under threat. Those things sit in the liquor licence, the planning permit and the venue's history with council, police and Liquor Control Victoria (LCV).

This checklist covers what to look at, in the order we look at it. Use it alongside your solicitor and accountant, not instead of them.

Check the liquor licence

• The licence type. Is it a restaurant and café licence, an on-premises licence, a general licence or something else? Each allows different things. A restaurant and café licence, for example, is for liquor served with meals, with tables and chairs for most patrons. If you plan to run it as a bar, that matters.
• The hours. Do the licensed hours match how the venue trades now, and how you plan to trade?
• The capacity. What patron number does the licence allow? As a guide, LCV generally works capacity out at about one person per 0.75 m² of licensed floor area.
• The red line plan. This is the plan showing the boundary of the licensed area. Walk the venue with it. Does the licensed area match the floor? Is the courtyard or footpath area included?
• The conditions. Read every condition. Look for crowd controller requirements, music limits and anything unusual.
• The licensee and nominee. Who holds the licence, and who is the nominee if it's a company?

Plan the licence transfer

When you buy a licensed business, the licence is transferred to you through LCV. You'll need to pass suitability checks, including police checks of directors and associates. Victoria Police can object to a transferee's suitability.

A transfer can be timed to settlement, so make the contract subject to the transfer. If something goes wrong with the transfer, you don't want to have settled already. Our page on transferring a liquor licence explains the process.

Check the planning permit

This is the step most buyers skip, and the one that most often costs them.

• Is there a permit? Does the use need one in this zone, and does it have one?
• What do the conditions say? A permit for the use can cap hours and patron numbers. The licence can't take the venue past those limits.
• Are there old liquor conditions? Since 1 July 2025, liquor no longer needs a planning permit. Many permits still carry conditions from the old clause 52.27 permission. It's our position that conditions relating only to that permission no longer have effect, but they may still need cleaning up. See VC286: what changed for venues.
• Does the venue match the permit? Extra seating, a new deck or a bigger outdoor area may have gone in without approval.
• Car parking and music. Check any car parking conditions, and whether live music is covered.

Check the compliance history

Ask the vendor for all correspondence with council, LCV, Victoria Police and the EPA over the past few years. Look for:

• planning compliance letters, notices to comply or infringements from council
• any VCAT proceedings, including enforcement orders
• LCV compliance matters or breaches
• noise complaints and how they were handled
• objections lodged on past applications, and any conditions agreed to settle them.

An open enforcement matter doesn't always kill a deal. But you need to know about it, understand what it would take to resolve, and price it in.

Check the building and council approvals

• Building permits and occupancy. These are issued by a building surveyor, separate from planning. Check the fit-out was approved and the occupancy matches how the venue is used.
• Food business registration. This is with council. Ask how registration will move to you.
• Footpath trading permit. Serving on the footpath needs a council footpath trading permit plus that area on the licence. Ask council whether the permit moves to you or whether you need to apply for your own.

Check the lease against the permit and licence

The lease, the planning permit and the licence should all agree. Check that the lease allows the use you plan, and the hours and area you plan to trade in. A lease that allows trading until midnight doesn't help if the permit stops at 11pm.

Check what you want to change

Many buyers plan to change something: later hours, more patrons, a bigger licensed area or footpath seating. Check it's possible before you buy.

• Later hours or more patrons usually need a licence variation. The question for LCV is the change itself, not the whole licence again.
• Trading after 1am needs a late night licence, and some inner-Melbourne council areas have had restrictions on new ones. Check the address.
• If the use needs a planning permit, the permit may need to change too.

What are the red flags in a hospitality business sale?

These don't always mean walk away. They do mean stop, find out more and reprice if needed.

• The red line plan doesn't match the venue.
• There's an open council enforcement matter or VCAT proceeding.
• Permit conditions cap hours or patrons below how the venue currently trades.
• Outdoor areas or seating are in use without a permit or licence cover.
• The vendor won't share correspondence with council or LCV.
• There's a history of noise complaints or objections with no resolution.

Paperwork to ask the vendor for

• The liquor licence, its conditions and the approved red line plan
• The planning permit, its conditions and the endorsed plans
• Building permits and the occupancy permit
• Food business registration and any footpath trading permit
• Correspondence with council, LCV, police and the EPA
• Any acoustic reports and venue management plans

Getting it checked before you sign

Our due diligence service works through this checklist for you, for a fixed fee quoted before we start, and tells you what we find in plain words. When you're ready to proceed, we can manage the liquor licence transfer through to a decision. Book a 15-minute call before you sign anything.

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