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Selling any type of property can sometimes involve some hurdles, and that’s particularly true when trying to sell a freehold or leasehold takeaway shop. This guide offers important advice on potential problems that you might encounter when trying to sell this type of property, as well as suggestions on how to boost the potential for a buyer to make a fast and fair offer.
- Making the decision to sell your takeaway shop
- Factors that can help the sale of a takeaway shop
- Potential hurdles with selling your takeaway shop
- Getting your takeaway shop ready for sale
- Paying Capital Gains Tax on the sale of your takeaway shop
- Your options for selling a takeaway shop
- Frequently asked questions about selling a takeaway shop
Making the decision to sell your takeaway shop
Popular throughout the UK, takeaway shops serve up a wide range of cuisines including fish and chips, Italian, Indian, Greek, Chinese and many more in cities, suburbs and rural locations.
Under a UK law known as The Town and Country Planning (Use Classes) Order of 1987 (Gov.uk), takeaway shops serving hot food are part of a "use class" of leisure properties that is a broad category covering many different commercial businesses such as gyms, restaurants and bed and breakfast properties.
Takeaway shops are distinct from restaurants because the former are designed for customers to visit, place an order for hot food, and then take it away to eat not on the commercial premises. That’s why takeaway shops rarely have seats or tables, and if they do they’re usually for people to use whilst waiting for their food. That’s why staff at a takeaway shop are all behind the counter and there are no servers.
Some takeaway shops are standalone buildings, whilst others might have a flat above where you or a tenant lives. In some situations the owner of the property may live in the flat and someone else pays them to own the takeaway shop space for their food business. Or you could be both the owner of the takeaway shop and also live in the residence on-site.
Regardless of whether the property has any living space attached to it, you may be selling the takeaway shop as either freehold or leasehold. Freehold means that you are the outright owner of the property and the land on which it is located. Leasehold means that you own the takeaway shop for a set number of years in exchange for paying the freeholder an annual ground rent.
Whichever type of takeaway shop you own, keep reading to learn about the various obstacles that you might face with trying to sell, and how to boost the potential for a fast and fair sale.
Factors that can help the sale of a takeaway shop
When someone is considering buying a takeaway shop, there are various pros and cons that they will assess before making an offer on the property. If you’re trying to sell a takeaway shop it can be useful to know what these issues are, because you can talk up the advantages to buyers whilst also having quick and full answers to any concerns that potential buyers might raise.
The faster that you’re able to respond to queries from prospective buyers, the better your prospects of keeping someone interested in making an offer on your property.
Great location: Takeaway shops are designed for convenience and making it easy for people to quickly pick up hot food. Properties that are located in areas with heavy foot traffic and that are easy for people to park nearby may be the most sought after by potential buyers.
Profitable business: Often linked to a great location, though not always essential, is if the takeaway shop makes a strong, consistent profit. If this is the case for your business be sure to show buyers as much information as possible to prove how much money the venue makes.
Flat on premises: If the takeaway shop has a flat above it or some other living space as part of the same building, this can be attractive to buyers either to provide them with a home or for the potential that they could rent out the property and make extra money from that income.
Potential hurdles with selling your takeaway shop
In addition to various factors that can potentially help when trying to sell your takeaway shop (be sure to read this article from Plande), there are also a few possible negative aspects of the property that might make it harder to attract a serious buyer.
The faster that you are able to respond to buyers’ possible concerns about your takeaway shop the better, because they are more likely to respond favourably to prompt, detailed answers.
Also, beware that you must fully disclose any potential problems that you are aware of with your property, such as structural flaws or other negative issues. If you know of such problems but hide them from a buyer, you could be liable for facing a lawsuit and severe penalties in the event that someone purchases your takeaway shop and the discovers the problem as owner.
Property damage: If your takeaway shop has structural problems, for example flood damage, this could deter some buyers because they will be concerned about the time and money it will cost them to fix the issue.
Bad location: An unenviable location can also make some prospective buyers lose interest in your takeaway shop, such as a location that is hard to reach, because they will fear that where the property is situated will make it much harder to have a steady stream of customers.
Flat on premises: Although a living space above or next to a takeaway shop can be seen as a bonus by some buyers, there are also people who will view this is a drawback because they will not want to additional hassle of having to become a landlord and maintain the residence.
Getting your takeaway shop ready for sale
When you are preparing to sell your takeaway shop, appearances matter and that’s why you should spend some time cleaning up your property before you list it for sale.
Inside, it’s advised to remove any clutter that you might have in the customer waiting area, the kitchen and other parts of your takeaway shop. The more spacious that your property appears, buyers are likely to see it as more valuable (as discussed in this article by Homebuilding.co.uk). The same goes for tidying up and removing dust and rubbish, so that the takeaway shop looks in its best possible condition when buyers view it.
Outside, you should also spend some time checking that the property looks inviting and that any glaring issues are fixed, such as missing roof tiles, chipped paint or broken glass. And if there’s any grass outside your takeaway shop you should mow it and remove any weeds.
On a larger scale, if your takeaway shop has some problem that buyers might consider to be a dealbreaker – such as structural issues, dry rot, asbestos and other situations – then you will have to consider whether to invest the money and time necessary to fix the problem before trying to sell.
One advantage of repairing any existing physical problems with your property ahead of seeking a buyer is hopefully improving the perceived value of the takeaway shop. Some buyers will see the negative issue and be concerned about the funds that will have to spend to fix the problem if they were to own your property, and they’ll likely reduce their purchase offer by that amount. By addressing the problem before seeking a buyer, you prevent this outcome from happening.
If your property does have some type of major structural problem or other issue that you cannot fix before selling because of a lack of funds, time or desire to pursue the work, the good news is that you can still get a fast and fair offer for the property depending on how you try to sell it.
Should this be your situation, you should get in touch with a quick buyer like LDN Properties, because these companies have extensive experience with making competitive and speedy offers to buy problem properties "as is"without any repairs or other work being done to them. It’s a great way to get a decent offer for your property and with the added benefits of not having to pay any commission and enjoying a streamlined sale that will be completed in a few weeks.
Paying Capital Gains Tax on the sale of your takeaway shop
One important consideration that should be part of your budget planning (and plans to save money) with the sale of your takeaway shop is whether you will have to pay Capital Gains Tax. This is a levy that the UK government imposes on the gain, also known as the profit, that an owner makes when they sell a physical asset – a definition that can include property, cars, artwork and various other items.
If you are required to pay Capital Gains Tax then it will only usually apply to the profit that you make from the sale of your takeaway shop.
It’s worth consulting with a financial expert about your potential Capital Gains Tax burden because there are situations where you could eliminate or reduce the amount that you owe. And if you either sell your property at a loss compared to the price at which you bought it, or you break even by selling it close to the initial purchase price, Capital Gains Tax won’t apply.
Your options for selling a takeaway shop
One of the most important decisions that you will have to make when selling your takeaway shop is deciding which method to use for finding a buyer. Your choices are usually selling to a quick property buyer, selling at an auction, selling on your own, or selling via an estate agent.
There are pros associated with each of these four methods, but some of the choices also have some rather prominent drawbacks, such as taking many months or requiring that you pay large amounts of commission if the third party helping you to sell is able to find a buyer.
In order to select the approach for selling that best matches your goals, start by writing down your top aims with selling, including whether you are willing to pay commission, what your ideal asking price is, how long you can wait before getting an offer, and more. Then compare all of these details against the specifics of the four selling choices as outlined below, and this should assist you in identifying which of the approaches will be most suitable for your situation.
Selling to a quick property buyer
You’ll find that this is usually the speediest method for selling a takeaway shop, because quick buyers like LDN Properties are able to complete the entire process of buying a property within a handful of weeks, and that includes exchanging contracts and paying you the proceeds.
They are able to move so rapidly because these companies have the financial resources available to buy properties immediately, without having to wait for weeks or months to first get approval for a mortgage that will cover the cost of purchasing your takeaway shop.
In addition to the speed of selling, another benefit of selling to a legitimate quick buying property company is that they will not make you pay any commission, so you are assured of receiving the full proceeds. That compares favourably to using an estate agent or auctioneer, because you will have to pay those third parties fees that will add to your overall selling costs.
Quick buyers are also a good choice if your takeaway shop has any structural damage or another problem that might deter other buyers from making an offer. For example, LDN Properties has been offering on leasehold and freehold commercial and residential properties since 2003, including takeaway shops with structural problems, flats with leaks, houses that have septic tanks, vandalised homes, hotels with subsidence, and many other situations.
Selling at an auction
A second way to find a buyer is through an auction, where people will be able to place bids of increasing value on your takeaway shop, with the highest bid at the end auction deemed the winner. Note that a qualifying bid on a property is a binding agreement to sell it, and the buyer could sue you to enforce the sale in the event that you try to walk away from it.
Selling this way can take many months, with a significant delay of several weeks at least between when you list the takeaway shop for sale and when the auction occurs. And even if your property sells at the auction, the winning high bidder then has an average of 28 days to complete all of their required steps, such as signing all the relevant legal paperwork.
Some auctioneers might be open to setting a shorter deadline for the buyer to finalise all of their mandatory actions, so you could ask individual companies if they’re open to doing this.
Another negative aspect of selling this way is that you’ll have to pay the auctioneer commission for the work that they do, which includes creating and advertising a listing that describes your takeaway shop and features photographs of it, hosting the auction, and overseeing a sale. They typically charge commission based on a property’s final selling price and this will add to your total costs when selling because the fee is taken out of the eventual sale proceeds.
It’s possible that some auctioneers might be willing to negotiate a lower rate of commission, or make the buyer pay some of your expenses, so it’s worth asking if this might be an option.
Also, some auctioneers might not have much experience, if any, with selling commercial properties like takeaway shops, and if that’s the case then they might struggle with knowing how to market your property in such a way that it gets many buyers interested in placing bids. Ask individual auctioneers about their track records with selling takeaway shops, and opt against selling via any company that has never managed to sell such a property in the past.
Selling on your own
Another way to sell your takeaway shop is doing so without any assistance, but beware that this can be a very stressful and time-consuming option. That’s because you will be responsible for every step of the process from creating a listing to booking viewings and fielding offers.
This is a major undertaking that you will not be able to simply do in your spare time, so it’s only recommended if you have sold a takeaway shop in the past or have an experienced friend or family member who might be willing to help you for free. Otherwise, you face an extensive amount of work that may take more than a year before you receive a serious offer.
The only obvious advantage of selling on your own is that you would not have to pay a third party like an auctioneer or estate agent any commission for selling your takeaway shop. But you could still have large expenses, such as paying to advertise the listing for your property.
Instead, you should think about selling your property to a quick buyer because you would also not have to pay any fees, but you’d get a much faster sale as the process should only take a few weeks. Selling to a quick property buyer is also a streamlined and no-hassle process, so you would also be saving yourself a lot of stress by selecting that selling option instead.
Selling via an estate agent
A fourth way to sell your takeaway shop is by using an estate agent, which can help to reduce your workload because they will handle most of the work in finding a buyer, such as creating and advertising a listing, organising viewings, and hearing offers from serious buyers. It’s a lot of work and not having to do any of this will save you a significant amount of time and stress.
But this is a slow way to sell any kind of property and you might be waiting more than an entire year before you get an offer. Remember also that potential buyers can withdraw an offer without penalty any time up until just before exchanging contracts. If that unfortunate situation happens, you’ll have to start over with finding a buyer, which could add many months to the process.
Estate agents, like auctioneers, also charge commission for the work that they do in selling properties. You can expect to pay a fee as a percentage of whatever sale price you’re able to get for your takeaway shop. This commission will be deducted immediately from the sale proceeds, which will increase your overall expenses.
Note that some estate agents might not have any experience with selling a takeaway shop, which implies that they could struggle to know how to best advertise your property in order to generate interest from buyers. Always ask individual estate agents whether they have successfully sold a takeaway shop in the past, and avoid using those that have not.
Top queries and answers about selling a takeaway
Property owners considering a quick sale usually have some questions, ranging from the condition needed before selling through to selling with a tenant. These are the top questions we’re asked about selling a takeaway:
Your top questions when selling a takeaway
Takeaway shops, which serve hot food that people buy and eat off-site such as fish and chips, Indian, Chinese and Italian cuisine, are defined as leisure facilities under The Town and Country Planning (Use Classes) Order of 1987, along with restaurants, gyms and other businesses.
They can be either freehold or leasehold – if the property is freehold this means that you own the takeaway shop and the land on which it was built outright. If your takeaway shop is leasehold then you will have the legal ownership of the property for a specific number of years in an agreement with the freeholder, and you will pay them an annual ground rent.
One of the most important issues with trying to sell a takeaway shop is the profitability of the business, because if you can show potential buyers that the property can make a consistent profit by selling hot food, they might be more interested in owning it. If there’s a residence above the takeaway shop or otherwise attached to it, this can also increase interest from buyers.
Yes, there are several factors that might complicate the sale of your takeaway shop, including an unenviable location. If the property is in an area where it’s hard for people to reach by foot or car then this will likely make some prospective owners lose interest. This is because the potential buyer may be concerned that it will be hard to attract customers to the business.
It is not required that you repair any physical damage to your takeaway shop, and indeed it might be beyond the time, effort or funds that you are willing to invest before seeking a buyer. Thankfully, you can still get a fair and swift offer for your property as is in its current condition without spending any money on fixes if you get in touch with a fast property buyer.
Your best option is likely contacting LDN Properties or another honest quick property buyer because these companies are able to complete the purchase of most types of property within a few short weeks. Using an estate agent, a property auction or selling on your own can all be very lengthy processes that will take at least several months to finalise every step.
If you decide to sell your takeaway shop by using an estate agent or trying your luck with a property auction, then you will have to pay them commission if they find a buyer, and this will add to your selling expenses because the fee will be taken out of the sale proceeds right away. But if you sell using a quick buyer or without any help then you won’t pay any commission.
