Partner primer

How to evaluate
a restaurant deal.

A 3-week diligence framework you can run on any restaurant partnership opportunity — investor, operator, or advisor.

1. The numbers (week 1)

• Trailing 12 months P&L, monthly. If they can only produce annual, that's a red flag.
• Balance sheet — current assets, current liabilities, debt, payables aging.
• Bank statements for the same 12 months. Reconcile to the P&L. Discrepancies are the conversation.
• Sales tax returns. Numbers should match revenue on the P&L.
• Check prime cost (food + labor) — should be 55–65% of sales for full-service, 60% or under for QSR/fast casual.

2. The lease (week 1)

• Years remaining + renewal options. Anything under 5 years left is a problem.
• Rent as % of revenue — healthy is 6–10%. Above 12% and the unit economics likely don't work.
• Personal guarantees, demolition clauses, percentage rent, exclusivity.
• Landlord relationship — friendly, neutral, or hostile?

3. The people (week 2)

• Org chart and tenure. High GM/chef turnover is operational debt.
• Talk to the GM and chef separately, with the owner's permission. Their candor tells you more than any spreadsheet.
• Equity, profit-share, or retention agreements already in place — especially anything that triggers on a sale.
• Family involvement. Spouse, kids, in-laws on payroll without clear roles is a future blow-up.

4. The brand and operations (week 2)

• Google, Yelp, and TripAdvisor reviews — last 12 months trend, not lifetime average.
• Social presence: real engagement vs. follower count.
• Health inspection history (most jurisdictions publish online).
• Documented systems: recipes, training, ordering, scheduling. If it lives in the owner's head, the price should reflect that.

5. Structure the deal (week 3+)

• Match the structure to your role: see /partnership-types for the nine common shapes.
• Always paper it: shareholder/operating agreement, vesting, drag-along, tag-along, ROFR, key-person clauses.
• Hospitality-specialist attorney + CPA. Generalists miss the things that bite later.
• Define the exit before you sign. "What happens in 5 years?" should be answered in writing on day one.

Red flags that should kill the deal

Any one of these on its own is enough to walk. Two is a pattern.

• Books that arrive late, in pieces, or 'don't tell the whole story.'
• Owner who can't articulate prime cost % from memory.
• Cash sales 'off the books' presented as a positive — it's a tax fraud admission.
• Lease under 5 years with no renewal in writing.
• Concept that depends entirely on the owner's celebrity, recipes, or personal relationships.
• Any partner, family member, or former employee with an undocumented equity claim.
• Pressure to move fast or 'sign before someone else does.'

Wingman doesn't provide legal, tax, or financial advice. Use this framework as a starting point — not a substitute for a hospitality-experienced attorney and CPA.

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