A café’s suppliers do not necessarily transfer with the business. The buyer may need fresh accounts, credit approval, guarantees and contracts even when the products and representatives appear unchanged. The seller’s price, rebate or credit limit may also depend on its volume, payment history or related venues.

Treat supplier continuity as a separate due-diligence and settlement workstream. Map material suppliers, verify parties and terms, quantify concentration and rebates, then obtain written confirmation of the buyer’s position. The test is whether the buyer can order the required goods on acceptable terms from the first trading day.

Build a complete supplier map

Cover food and beverage suppliers, packaging, cleaning, linen, pest control, waste, gas, grease-trap services, POS, internet and maintenance. Coffee equipment and loan arrangements require separate title and contract analysis, covered in Coffee Equipment Ownership, Supplier Loans and Supply Agreements.

Request at least 12 months of invoices and statements, the accounts-payable ledger, bank payments, price lists, contracts, credit applications, rebate statements and recent correspondence. For each supplier record:

  • the full legal supplier and customer entity, ABN or ACN and account number;
  • goods or services supplied, order method, delivery days and minimum order;
  • price basis, freight, surcharges, payment period and credit limit;
  • exclusivity, minimum spend, rebate, volume tier or promotional support;
  • contract term, renewal, assignment, change-of-control and termination provisions;
  • personal or director guarantees, deposits and direct debits;
  • arrears, disputed invoices, credits, supply holds and service complaints; and
  • the alternative supplier, lead time and switching cost if continuity fails.

Check names rather than relying on logos or trading styles. ASIC’s company and organisation registers can be searched by an organisation name, registered business name or identifier such as an ACN. Match that information to contracts, invoices and the seller’s entity structure. An account in a related company or another venue’s name may not be available to the buyer.

Reconstruct the real commercial terms

Terms can sit across a signed agreement, credit application, price list, email variation, purchase order, invoice conditions and informal practice. The Australian Government’s supplier guidance recommends written terms covering matters such as price and payment, delivery, quality, warranties, insurance, disputes and termination. Assemble all relevant documents and identify which one prevails if they conflict.

Reconcile invoices to purchase volumes and bank payments. Check whether costs are before or after credits and whether rebates were booked against the purchases that earned them. Ask whether a rebate is contractual or discretionary, paid as cash or credit, dependent on multiple sites, or conditional on no overdue balance. Do not normalise profit using a benefit that has not been offered to the buyer in writing.

Distinguish a transferable contract from a relationship. A salesperson saying that supply should continue is useful operational intelligence, but it is not assignment, novation or approval of a new credit account. A contract may require consent, prohibit assignment, terminate on sale, or allow the supplier to reset price and credit. Where there is no written contract, continuity may depend entirely on the supplier accepting the buyer and its proposed terms.

Test concentration and fallback capacity

Calculate purchases by supplier and category monthly, not only for the full year. This shows whether one wholesaler provides most food lines, whether several suppliers are controlled by the same group, and whether seasonal buying masks dependence. Also identify single-source items central to the menu, even if their dollar value is modest.

For each material supplier ask:

  1. Could the café trade if the account stopped at settlement?
  2. How many days of usable stock remain?
  3. Is there a tested substitute with suitable quality, allergens and delivery windows?
  4. Would switching alter recipes, prices, waste or preparation time?
  5. Can the premises store a larger minimum order?

Hypothetical example: a café buys 55% of its food and packaging from one wholesaler and receives 21-day credit. The buyer is offered cash-on-delivery for the first six weeks with a lower credit limit thereafter. The historic gross margin may still be reproducible, but the buyer’s opening cash requirement and ordering frequency are different. These figures illustrate the method only; they are not an industry benchmark.

Review credit, guarantees and stock rights

Ask what the new buyer must provide: application, trade references, deposit, direct debit, bank guarantee or personal guarantee. Confirm timing. A late credit application may not produce an active account for the next delivery cycle.

Read retention-of-title and consignment terms with legal advice. The PPSR’s retail guidance explains that goods acquired from wholesalers on retention-of-title terms and goods supplied on consignment may be affected by Personal Property Securities law. That matters when stock on site has not been paid for or the seller has granted security interests. PPSR searches are one evidence source; they do not replace identifying who owns settlement stock, matching unpaid invoices and agreeing what will be counted and transferred.

Many cafés sign standard-form supplier or service contracts. The ACCC’s current contracts guidance says that, for new or varied standard-form contracts from 9 November 2023, the small-business protections use fewer than 100 employees or annual turnover below $10 million. It also says only a court can finally determine whether a term is unfair. Have a lawyer assess unilateral price changes, one-sided termination, automatic renewal, broad indemnities and disproportionate exit charges; do not simply assume a difficult term is unenforceable.

Make continuity a pre-settlement plan

Create a supplier cut-over register with an owner and deadline for every action. Before completion, seek written confirmation of opening price, credit limit, payment terms, delivery schedule, first order, contract status, rebates and required security. Arrange alternatives where approval is uncertain.

Coordinate the final seller order, stocktake and account cut-off. Specify who owns pre-completion deliveries, who receives later credits, and how returns, deposits, reusable crates and disputed invoices are handled. Keep the buyer’s direct debit separate from seller liabilities, and provide the correct buyer entity, billing email, delivery contacts and authorised orderers.

A day-one file should contain account numbers, order portals, contacts, delivery timetables, specifications and approved substitutes. Where permitted, test logins and place opening orders before settlement. Completed onboarding demonstrates continuity; a last-minute contact list does not.

When specialist advice is needed

Use a transaction lawyer to review assignment, novation, guarantees, security interests, unfair-term issues and settlement allocation. Ask an accountant to reconcile purchases, credits and rebates and model working-capital changes from new credit terms. The buyer’s operator or chef should test substitutes, ordering cadence, storage limits and service standards.

Sources

  • Suppliers — Australian Government business.gov.au, reviewed 2026-10-03
  • Contracts — Australian Competition and Consumer Commission, reviewed 2026-10-03
  • Retail — Personal Property Securities Register, reviewed 2026-10-03
  • Company and organisation registers — Australian Securities and Investments Commission, reviewed 2026-10-03

Disclaimer

This article provides general information only. It does not constitute legal, tax, accounting, financial, credit, valuation or other professional advice. Circumstances differ. Obtain advice from appropriately qualified advisers before acting or entering a transaction.