Full-service restaurant takeover due diligence checklist - six pockets to turn inside out (lease, licenses, transfer price, equipment, staff, stored value), every question demanding paper not promises, price talk only after all pockets clear

You are a restaurant-opening diligence coach. Produce a Takeover Due Diligence Checklist for an owner-operator preparing to take over a transferred restaurant, used before any deposit. Organized into six pockets, each item in three columns: what to check / what evidence to demand (nothing verbal counts) / what to do when a problem appears (negotiate into the price / require resolution before closing / walk away).

Six pockets, order fixed - a failure in either of the first two terminates the deal:
1. Lease pocket:
- Remaining term, annual escalation clause, deposit amount and refund conditions, whether the transfer requires the landlord's written consent, renewal rights at expiry, utility service class and any arrears
- Evidence: the original signed lease, a face-to-face with the landlord themselves (not the seller's retelling), the landlord's written position on this transfer
2. Licensing pocket:
- Whether the business license and food-service permits transfer to your name or must be cancelled and re-applied; fire and gas-related paperwork on hand; whether current menu categories fall inside permitted scope (adding deli or alcohol sales needs to be possible)
- Evidence: original certificates, your own visit to the permitting counter to ask about the transfer process in person - the counter's answer is authoritative, the seller's is not
3. Transfer-price pocket:
- Break the asking price into items: equipment value, build-out value, remaining lease value, brand/recipes/supply relationships, other - a single bundled number is not accepted
- Hidden debts, asked line by line: supplier payables, unpaid wages, utility and property arrears, leased or liens on equipment, unresolved disputes
4. Equipment pocket:
- Power-test every unit: walk-in and reach-in cooling, range ignition, steamers, dish machine, exhaust fans; record make and condition
- Handling rule: anything broken either comes off the price or is fixed before closing, written into the contract - "it's all fine, see for yourself" is not a condition
5. Staff pocket:
- Which current staff would stay, any unpaid wages, and above all the head chef's intent (a full-service restaurant that loses its head chef loses its menu)
- Evidence: recent payroll records, face-to-face conversations with the staff themselves
6. Residuals and reputation pocket:
- Unredeemed stored-value balance: amount, number of holders, and who covers it (the seller funds an escrow, or you accept it) - this must be settled before closing
- Whose book the running tabs belong to, whether delivery-platform and review-site listings can transfer, and what the bad reviews actually complain about (food complaints are fixable with a new chef; location and parking complaints are not fixable at all)

Closing rules (fixed):
- Any item in any pocket where the seller "can't quite say" or "won't show" is treated as a problem that exists, not as one that doesn't
- No deposit under any name before every piece of evidence is in hand
- The completed checklist ends in exactly one of three outcomes: negotiate against the problem list / require resolution before closing / walk away

Constraints:
- Do not judge for me whether the asking price is fair - the checklist digs out the composition and the traps; the price call is mine
- Do not cite specific regulations - licensing questions are settled by the permitting counter's in-person answer; the checklist only requires "go ask, keep the record"
- No prediction of "will this restaurant make money" - diligence hunts for traps, not for prospects
- The item lists for the six pockets are not extended or trimmed - unused items stay blank; no padding with invented questions

Why it is written this way

The information asymmetry in a transfer is structural: the seller has every incentive to wrap the traps, and you hold all the negotiating power only until the deposit clears. So the design principle is a single move - upgrade every question from "ask about it" to "produce the paper". Verbal promises are worth nothing after closing; the signed lease, the payroll sheets, the counter's written answer are the things you can put on a table later.

The lease leads and holds veto power because taking over a restaurant is, at bottom, taking over a lease: equipment ages, chefs leave, build-outs go out of style - the only non-renewable asset is the right to occupy that spot. Too short a remaining term and the transfer price never amortizes, however clean the other five pockets look. "The landlord themselves" gets its own evidence line because the single most-faked link in these deals is "the landlord already agreed to the transfer" - the loop only closes with the landlord's own written position.

The stored-value balance sits in the last pocket but is the most lethal: it is the one liability that flows back to you with certainty - cardholders will come in and consume your food and labor, while the previous owner already banked the cash. Who covers it (the seller escrows, or you accept it) has to be settled dead before closing, or it is not a risk, it is a scheduled loss.

"What the bad reviews actually complain about" is the one judgment diligence can get for free: complaints about the food are an operator problem, fixable by replacing people; complaints about the location, the trade area, the parking, are conditions you cannot buy your way out of. The review history is public - one evening of reading beats any "business has been steady" the seller tells you.

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