Buying a restaurant in Dubai, or leasing a space for one

Licences come first, and they are not one licence

A restaurant needs a commercial trade licence with the correct F&B activity, issued by the relevant authority for where the venue sits — the mainland economic department or the free zone that governs that plot. On top of it comes a food establishment permit from the municipality, which is about the premises: kitchen layout, extraction, grease management, cold storage, staff food-handler cards.

Alcohol is separate again. The permission attaches to the venue and its category rather than to the operator's ambitions, and in practice it is decided by the location and the landlord long before you are involved. A concept that only works with a bar, in a space that will never hold that permission, is not a concept.

Signage, outdoor seating, delivery aggregator registration and, for anything with music, an entertainment permission are each their own approval. None of it is exotic — it is simply a longer list than a first-time operator budgets time for.

Buying a working venue against fitting out a shell

Buying an operating restaurant looks faster, and sometimes is: an existing kitchen, staff who know the room, and revenue from week one. What you are paying for beyond the equipment is goodwill, and goodwill is the hardest number in the transaction to verify. Ask for filed accounts and aggregator statements, not a spreadsheet.

The trap is assuming the licences come with it. A trade licence is tied to its holder, and transferring or reissuing it is a process with its own approvals — including the landlord's consent to assign the lease. A sale agreed on the assumption that everything simply carries over is a sale that stalls at the first counter.

A shell unit is the opposite trade: no goodwill to overpay for, and a fit-out to fund. Kitchens, extraction and cooling are the expensive part, and they are what a landlord will usually give a rent-free period for rather than money.

The lease is the deal

Term against payback. A fit-out has to repay itself inside the lease you actually hold, including renewal rights. A three-year term with an uncertain renewal and a heavy kitchen behind it is a bet that you will be negotiating from weakness exactly when the business is finally working.

Then the costs that are not rent: service charge, chiller, marketing contributions in a mall, and who pays for the extraction route. In a mall you may also meet trading-hours obligations and exclusivity clauses — sometimes protecting you, sometimes preventing you from doing the thing you planned.

Location, last, because it is the most misread. Footfall in a mall is bought, not found: you pay for it in rent and in percentage-of-turnover terms. A destination location is cheaper and requires you to generate your own traffic. Both work. Confusing which one you have signed for is what empties a dining room.