Buying or Selling a Café or Coffee Shop in the UK – Your Complete Legal Guide

Buying or selling a café or coffee shop isn’t just a business decision, it’s often a personal milestone. The process involves multiple legal, financial, and regulatory issues that, if overlooked, can delay your transaction or lead to costly mistakes.

Our expert solicitors guide buyers and sellers of cafés and coffee shops through every legal step, from lease negotiations to supplier contract transfers, ensuring your transaction is secure, compliant, and stress-free.

Buying or Selling a Café or Coffee Shop, Business Structures & Contracts Explained

The legal process will differ depending on whether you are purchasing shares in a company (taking on its liabilities) or just the assets of the business (fixtures, stock, goodwill). Contracts and staff rights also play a big role.

General issues:

• Asset vs. share sale – tax and liability implications vary.
  
• Supplier contracts – some may not automatically transfer.
  
• Employees – staff are protected under TUPE, so employment terms continue with the buyer.
  

Tips for Buyers:

• Be clear on whether you are buying assets or shares and what liabilities you take on.
  
• Review all supplier agreements to ensure continuity.
  
• Ask for full employee information early in the process.
  

Tips for Sellers:

• Put contracts in good order before marketing the café.
  
• Provide accurate employee data and consult as required under TUPE.
  
• Be clear about liabilities that will stay with you and those transferring.

Lease Legal Issues in the UK

Most cafés and coffee shops operate from rented premises, so the lease is one of the most important parts of any transaction. The landlord’s involvement can directly affect timing and even determine whether the deal goes ahead.

Key points to consider:

• Assignment rights – does the lease allow transfer, or will landlord consent be required?
  
• Lease length – a short lease reduces business value and may affect financing.
  
• Rent reviews & break clauses – these can change the economics of the deal.
  
• Security deposit – check the amount held and arrangements for repayment on completion.
  

Tips for Buyers:

• Obtain a copy of the lease early and review it with your solicitor.
  
• Confirm rent obligations, repair liabilities, and any hidden costs.
  
• Check if landlord consent is needed and factor this into your deal timeline.
  

Tips for Sellers:

• Engage with the landlord at the start to avoid delays.
  
• Ensure rent payments and obligations are fully up to date.
  
• Prepare to provide clear evidence of lease compliance.

Business Due Diligence

Due diligence protects both parties and ensures there are no hidden surprises.

General issues:

• Financial: review accounts, tax returns, and management information for at least 3 years.
  
• Legal: check for disputes, debts, or regulatory issues.
  
• Property: ensure the premises are in good repair.
  

Tips for Buyers:

• Commission independent financial and legal due diligence.
  
• Review staff contracts and customer agreements carefully.
  
• Conduct a physical inspection of the premises.
  

Tips for Sellers:

• Prepare accurate financials in advance.
  
• Resolve disputes or outstanding debts before marketing.
  
• Present a well-organised due diligence pack to build buyer confidence.

Business Licences and Permits

A café or coffee shop typically requires several licences and permits to operate legally.

General issues:

• Food business registration with the local council.
  
• Premises licence and personal licence if alcohol is served.
  
• PRS/PPL licences for music.
  
• Outdoor seating or pavement licences (where applicable).
  

Tips for Buyers:

• Confirm which licences transfer automatically and which require re-application.
  
• Check expiry dates and renewal conditions.
  
• Speak to the local council about transfer procedures.
  

Tips for Sellers:

• Keep all licences up to date before marketing.
  
• Provide buyers with a schedule of all current licences and permits.
  
• Make sure licence documents are readily available.

Intellectual Property and Brand Protection

Cafés and coffee shops often have strong branding and goodwill, names, logos, menus, and even recipes can be valuable intellectual property (IP).

General issues:

• Trademark protection, is the café name or logo registered?
  
• Social media and domain names, these must transfer to the buyer.
  
• Confidential information, recipes, supplier lists, and processes should be clearly included in sale documentation.
  

Tips for Buyers:

• Ensure IP rights are expressly transferred in the sale agreement.
  
• Verify ownership of logos, menus, and digital assets.
  
• Check for competing claims or infringement risks.
  

Tips for Sellers:

• Register trademarks before marketing the business to maximise value.
  
• List all brand assets (including online accounts) to show transparency.
  
• Confirm you own the rights to all branding and recipes you intend to sell.
  

Health and Safety Compliance

Health and safety compliance is critical. Buyers will not want to inherit risks or liabilities from poor standards.

General issues:

• Food hygiene ratings directly impact value and reputation.
  
• Fire safety, staff training, and compliance records must be up to date.
  
• Local authority inspections and certificates should be available for review.
  

Tips for Buyers:

• Inspect hygiene certificates and recent inspection reports.
  
• Consider commissioning your own health & safety review.
  
• Factor in any costs of upgrades before agreeing a price.
  

Tips for Sellers:

• Rectify compliance issues before putting the café on the market.
  
• Maintain strong hygiene ratings to support valuation.
  
• Prepare all compliance records for easy buyer review.
  

Business Tax Considerations

The way a café or coffee shop sale or purchase is structured can significantly impact tax liabilities.

General issues:

• Sellers may be liable for Capital Gains Tax, though Business Asset Disposal Relief may reduce liability.
• VAT can affect the purchase price unless the sale qualifies as a Transfer of a Going Concern (TOGC).
  

Tips for Buyers:

• Understand whether VAT will apply and how it affects your financing.
  
• Factor in stamp duty if you are buying shares in a company.
  

Tips for Sellers:

• Seek advice on Capital Gains Tax and possible reliefs before agreeing heads of terms.
  
• Ensure VAT registration status is clear to avoid disputes.
  

Note: At The Jonathan Lea Network, we work closely with trusted tax consultants within our network, or we can coordinate with your own accountants and advisers to ensure you receive the right guidance.

Business Financing and Funding

Many transactions involve external funding, which adds extra complexity.

General issues:

• Bank or investor finance may require detailed due diligence.
  
• Seller financing is sometimes offered but must be carefully documented.
  

Tips for Buyers:

• Secure funding arrangements early to avoid delays.
  
• Be transparent with lenders and share all due diligence promptly.
  
• Ensure loan agreements are reviewed by your solicitor.
  

Tips for Sellers:

• Be prepared for buyers’ lenders to request additional information.
  
• If offering seller finance, ensure repayment terms are legally binding.
  
• Consider obtaining guarantees or security if financing forms part of the deal.
  

Final Takeaway

Whether you’re buying or selling a cafe or coffee shop, early planning and professional legal support will protect your position and ensure a smoother, faster transaction. At The Jonathan Lea Network, our café business solicitors manage every stage, from due diligence to lease negotiations and completion, so you can move forward with confidence and focus on your next chapter.

📞 Book your free 20-minute consultation with one of our experienced solicitors today.

You’ll receive:

• A clear roadmap of next steps
• Insight into your legal position
• Practical advice tailored to your goals

Get in touch using the contact form here or call us now on +44 (0)1444 708 640. You can also visit our team page to meet the lawyers likely to be involved, including Liam, Callum and Andrew.