Succession in hotels and restaurants: buying, selling or leasing a business

The chambers report that many businesses can hardly find staff, and that buyers are often unwilling to take on the hours the work demands. Add requirements on hygiene and fire safety, building work and high rents.

The German hotel and restaurant association DEHOGA reports a sixth year in a row of falling real sales in 2025, with sharply higher costs. Since January 2026, food is taxed at the reduced VAT rate of 7 per cent again. For successors, the solidity of the last few annual accounts matters most.

A business can stay in the family, pass to employees or be sold to an outsider.

According to KfW's succession monitor, most Mittelstand owners would prefer a family solution, followed by a sale to outsiders. Management buy-outs have recently been planned more often again.

A takeover has no fixed timetable, but these steps almost always come up:

Succession works when not only the successor is prepared, but the business too. These steps help:

Small and mid-sized businesses are usually valued by capitalised earnings: what counts is the profit the business can generate over time. The starting point is the adjusted profit of recent years. An owner's salary is deducted, meaning what a hired managing director would cost. The rest is converted into a value with a rate that reflects the risk.

In hospitality, the business and the property are often valued separately. An investment backlog, for example in the kitchen, fire safety or rooms, lowers the value. Steady occupancy, regulars and a settled team raise it.

According to KfW's 2025 succession monitor, expected sale prices in the Mittelstand have risen by around 34 per cent since 2019. According to the DIHK's 2025 report, 36 per cent of retiring owners expect too high a price. An independent valuation early on protects both sides.

Often the business and the building belong to the same family. That leaves three routes: you buy both, you buy the business and lease the building, or you lease both. A lease lowers the capital you need; buying gives you more freedom to rebuild.

Serving alcohol traditionally needed a licence under federal law. Many states now have their own rules, and in some a trade registration is enough. The licence is personal, so you apply for your own. Also check lease and supply contracts, for example with a brewery.

In hospitality a lot depends on familiar faces. A shared transition period helps the team and guests stay:

KfW's ERP loan for start-ups and succession (077) finances up to 500,000 euros and at most 35 per cent of eligible costs. You apply through your own bank. If collateral is missing, the guarantee banks of the German states can back loans.

If the price includes property, banks assess it differently from a pure business purchase. Valuing the business and the building separately makes the financing clearer.

A vendor loan often completes the financing: the previous owner defers part of the price. According to KfW's 2025 succession monitor, expected sale prices in the Mittelstand have risen by around 34 per cent since 2019. A realistic valuation at the start saves both sides a lot of time.