How to Protect The Value in Your Hospitality Business After the Surcharge Ban

Since 1 October 2026, Australian businesses can no longer add a surcharge when customers pay by card. For cafes, restaurants, bakeries, pubs and motels, where most payments are tapped, the change lands squarely on the margin.

The surcharge has gone. The cost of accepting cards hasn't.

That matters across a large part of the market. At the time of writing, Bsale has 1,987 cafes and 1,796 restaurants listed for sale, with a combined asking value of more than $1.5 billion. Another 105 were added in the last seven days alone, 48 cafes and 57 restaurants.

The average asking price is around $350,000 for a cafe and around $472,000 for a restaurant. For most of those owners, the price a buyer will pay comes back to what the business earns. Card fees that were once added to the customer's bill and now sit on the profit and loss statement come straight off those earnings.

For owners planning to sell, that is worth paying attention to now. 

 

Why Hospitality Feels It More

 

Some businesses have switched cards off entirely. That can work for a service business invoicing a few hundred dollars at a time, but not for a café serving a queue.

Mount Gambier bakery owner Dylan McQueen told the ABC his business paid $5,785 in card fees last financial year, despite displaying "CASH PREFERRED" signs. Cash still made up only 16% of his transactions. "People pay for convenience," he said.

The numbers get bigger further up the scale. David Bitton, chef and founder of Bitton Gourmet, told SmartCompany that around 92% of turnover at his Rose Bay bistro comes through credit cards, with annual card acceptance costs that can reach around $40,000.

The Reserve Bank has cut interchange fees, but businesses will still carry a cost when they accept cards. That cost now has to be absorbed, built into prices or reduced by offering a discount for cheaper payment methods such as cash or PayID

 

Buyers Haven't Gone Anywhere

 

The good news is that demand for quality hospitality businesses has held up through 2026. In interviews for the January 2026 edition of the Bsale eMagazine, brokers shared what they're seeing in hospitality sales and which businesses tend to perform best when it comes time to sell.

On the Sunshine Coast, Craig Clark of CRE Brokers has seen business performance soften since the boom of the 2023–24 financial year, but buyer interest hasn't followed it down. "There's a huge demand outstripping supply," he said. "That's our biggest issue, not having enough stock."

Part of the reason is that good operators aren't in a hurry to leave. "People are holding on to their businesses because they're good," Craig said. For an owner who does decide to sell, that shortage of quality stock works in their favour, provided the numbers stand up.

It's a similar picture further south. Daniel McDonald grew up in a pub and worked in his family's hotels until he was about 30. He now runs McDonald Hospitality Brokers from Albury, with a team covering Victoria and the Riverina. He told Bsale in September 2026 that accommodation was "absolutely a seller's market". He has also seen strong competitive interest in early-morning trading venues, including coffee shops, breakfast spaces and lunchtime eateries. These are among the businesses most exposed to card fees, and also among those buyers are still chasing.

Kevin Connolly, who has spent more than four decades at CRE Brokers, has seen enough cycles not to be thrown by a single change. The market was soft at the start of 2025, he said, but picked up again once the federal election was over. "If the economy is good … we sell, and if the economy is bad, we still sell."

He also sees buyers coming to hospitality with clear preferences. "There are buyers who like accommodation, other buyers who like licensed venues and others who want cafe/food-service businesses," he said. "But generally, you could say that most buyers are entrepreneurs who want to improve the business and put their stamp on it."

Rod Devlin, who covers the Murray and Riverina for CRE Brokers, grew up as the child of a publican and has seen pubs hold up when budgets tighten. "Pubs seem to go well in recessions," he said. "People who might have gone out for fine dining drop back to mid-range, and those who went mid-range drop back to a pub style meal. People budget their entertainment dollars accordingly."

Bsale's own figures show the same mix of interest and caution. According to Bsale marketplace data, hospitality, food and beverage was the largest enquiry category in the April–June 2026 quarter, at approximately 15.7% of enquiries. Cafes, restaurants, takeaways, bars and bakeries continued to attract enquiries, particularly where listings promoted strong sales, low rent, simple operations or prominent locations. Buyers are interested, but more selective.

 

 

The Operator Shows in the Result

 

What buyers pay comes down to how well the business is run.

"There's always a market for good hotels," Rod said. "But as with any business, if you've got an operator that's not pushing their business to capacity, the result reflects that."

Phil Mammolito, a director at CRE Brokers in Melbourne, puts it more bluntly. "There's no such thing as a bad pub really. It's all about the management."

He has seen what the right operator can do. "I've got some great success stories where we've sold pubs turning over $300,000 or $400,000 a year. With the right operator in place, within a couple of years they're turning over ten times that, and the venue becomes a true destination."

A card cost left to drift through the accounts is exactly the kind of thing that reflects on the operator. An owner who reviews merchant statements, adjusts pricing and holds margins steady shows a buyer the opposite.

 

Evidence Over Expectation

 

Brokers will be looking at the numbers too. Daniel builds his appraisals on evidence rather than on what a vendor hopes to achieve. "Daring to be evidence-based is one of the challenges," he said.

Rohan Pertzel who sold his own pub before joining CRE Brokers in western Victoria, sees managing expectations as central to the job. "We've got to temper the expectations of both and guide them," he said. "Because we're a bit independent, there's no emotional attachment."

If margins have slipped since October, a broker will notice, and so will a buyer.

 

Decide on Merchant Fees Before a Buyer Does

 

Start with the merchant statement. Know what share of sales comes through cards and what it costs. Then decide whether to negotiate a better rate, change provider, build the cost into prices, offer a discount for cash or PayID, use PayID for function or accommodation deposits, or accept that cards are worth the cost. Simply adding the old 1.5% to every price may not reflect the real cost.

Buyers should ask the same questions as part of due diligence. Look at actual merchant statements and find out what changed after 1 October. Profit from a year when card costs were passed on won't necessarily reflect what the business earns now.

The surcharge ban won't decide whether a good hospitality business sells. But it is one more test of how well the business is managed, and the time to pass it is before going to market.

Tags: hospitality government

About the author

---

---