The Restaurant Closing Guide
Closing a restaurant has a specific sequence. Do it in the wrong order and you pay obligations you did not have to pay, miss deadlines that create legal exposure, and leave money on the table from assets you did not value correctly. This guide covers the complete sequence from the decision to close through final dissolution.
The Closing Sequence
Step one is the decision. Before you announce anything, you need a clear picture of your total obligations: remaining lease, outstanding debt, final payroll, and vendor accounts. Most owners underestimate this number by 30-50%.
Step two is employees. The WARN Act, final paycheck timing, and COBRA obligations are all time-sensitive. Getting these wrong creates personal liability that survives the business closing.
Step three is the lease. This is usually the largest obligation. The options are a lease buyout, sublease, assignment to a buyer, or default. Each has different costs and different timelines. The negotiation strategy depends on your landlord's situation and the current market for your space.
Step four is licenses and permits. Your liquor license may have market value. Surrendering it without checking is a common and expensive mistake.
Step five is equipment and assets. Auction, dealer, and private sale produce different recovery percentages. The sequence of who you sell to matters for maximizing recovery.
Step six is taxes and dissolution. Final sales tax returns, payroll tax deposits, and state dissolution filings all have deadlines. Missing them creates ongoing liability.
What Rod Downey Does
Rod Downey spent 40 years in the restaurant industry. A $195 diagnostic session gives you a clear read on your specific closing situation -- what the sequence should be, what each step costs, and where the hidden exposure is.