Last updated on May 5th, 2025
You’ve put countless hours—and likely many years—of hard work, dedication, and passion into your restaurant business. To ensure that the legacy you have worked so hard to build continues after you step away, you need to formulate a plan for the future of your business. Creating a succession plan is crucial for ensuring business continuity and enabling a smooth transition of ownership when the time comes.
When is the best time to create a succession plan? The answer is, as soon as possible. A succession plan often takes years to develop and execute, as you will need time to identify, prepare, and mentor your chosen successor(s). You should begin planning for succession long before you expect to retire or sell your restaurant. Life is unpredictable, and you never know when circumstances may demand a transition of ownership. The absence of a succession plan can have devastating financial and operational consequences for your business. In the case of an unexpected event such as injury, illness, or even death, you’ll want to ensure that the management of your business is left in trusted hands.
Not only does a detailed succession plan provide a blueprint for the future of your company, but it also earns the confidence of your employees, investors, customers, and other stakeholders by assuring them that a plan is in place for the inevitable transition of leadership. As such, you should communicate your plan, as well as any changes or updates, to all relevant stakeholders. Your succession plan should be regularly reviewed and adjusted if necessary to ensure alignment with the business’s goals and needs.
A key element of any succession plan is, of course, the selection of a successor. Since many restaurants are family-run businesses, succession plans often involve selling or gifting ownership to the next generation. Other possible strategies include identifying and developing a non-relative successor, selling to an outside party, or establishing buy-sell agreements in the case of multiple owners. You may choose to sell the building if it is owner-occupied, or you may decide to sell the business, hold the real estate, and rent to the new business owners.
As you can see, there are several different ways to approach the issue of succession. But how do you know what the best course of action is for you and your business? That depends largely on your personal goals and individual situation. A trusted team of advisors—including an accounting professional—becomes a critical resource when making these kinds of decisions.
RBT CPAs’ accounting experts are available to work with you to create a succession plan that best meets your goals. Our firm has been supporting restaurants at all stages of their business lifecycles for over 55 years, and our professionals are deeply familiar with the unique challenges and opportunities facing the restaurant industry. You can count on our CPAs to help you navigate the tax implications and other financial considerations of transferring ownership of your business.
Don’t leave your legacy up to chance. Protect the future of your business by developing a succession plan today. Call RBT CPAs to speak with one of our experts, and find out how we can be Remarkably Better Together.