Sell-side Due Diligence Checklist

Before making an investment, funds and private investors want to know as much as possible about the business opportunity. This due diligence checklist will help the deal team start the internal research project, which will give them — and potential investors — a comprehensive overview of the enterprise. A sell-side advisor, with assistance of legal counsel, accountants, and bankers, can help assemble these components, identify areas that need further research and documentation, and tailor the process for the specific restaurant.

Company Overview

  • Company name
  • Company domicile
  • Year established
  • Legal structure
  • Articles of Incorporation
  • Restructuring documents (if any)
  • Subsidiaries & equity interests (if any)

Business Description

  • Industry segments
  • Size of business
  • Strategy
  • Business plans (historic & future)

Legal

  • Regulatory information
  • All contracts, including supplier contracts, leases, and license agreements

Financials

All financial information should include previous three years of records.

  • Back Office & Accounting systems use
  • Point of Sale (POS) system(s) used
  • Annual and quarterly financial information
  • Financial projections for next three years
  • Unit-Level Profit & Loss Statements
  • System-Wide Profit & Loss Statements
  • CAPEX Budgets
  • Opening Schedules

Operations

  • Menu & Products, including current & past menus as well as the dates of menu & price changes 
  • Theoretical Food Cost Worksheets
  • Recipes & plating documentation
  • Location-level Information, including square footage, number of tables and seats, as-built documents, date opened, and date of last remodel. 
  • Suppliers

Intellectual Property

  • Training manuals
  • Recipes
  • Proprietary products
  • Proprietary technology
  • Quality assurance processes

Marketing & Sales

  • Marketing analysis
  • Brand positioning
  • Branding materials (logos, style guides, social media profiles, web collaterals)
  • Promotional Materials
  • Marketing Budget Allocation & Calendar
  • Historical marketing campaigns
  • Historical press releases
  • Client base & customer satisfaction data

Human Resources

  • Organizational chart
  • Executive and Deal Team bios
  • Employee count
  • Standard employment contract
  • Historical staffing records
  • Personnel policies
  • Job descriptions
  • Orientation & onboarding materials

Taxes

  • Income tax returns for prior 6 years
  • Government audit reports (if any)

ABOUT AARON ALLEN & ASSOCIATES

Aaron Allen & Associates is a leading global restaurant industry consultancy specializing in growth strategy, marketing, branding, and commercial due diligence for emerging restaurant chains and prestigious private equity firms. We help restaurant operators and investors make informed decisions, minimize risk, and maximize sustainable value. With experience on both the buy- and sell-sides of transactions, we have a robust understanding of trends and factors impacting restaurant chains and private equity funds around the world. We help protect, enhance, and unlock value throughout every phase of the investment lifecycle. Collectively, our clients post more than $100 billion in annual sales, span all 6 inhabited continents and 100+ countries, with tens of thousands of locations.

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