If the landlord is looking to demolish the place, you have limited options. On the other hand, there is some real opportunity, none-the-less. One option is that, if your folks are financially capable and the property owner is willing, they can buy the real estate, "as is". If the property owner is looking to demolish the building and sell the lot, as you suggest, he may be open to that. By buying the property as is, the property owner does not incur the cost of the planned demolition, which could be a plus for your parents, in terms of getting the price at a discounted level. For example - and obviously, I am making up numbers for the sake of an example - if the property is worth $500,000 as an empty lot, but it is going to cost the landlord $200,000 for demolition, his Net is $300,000. Perhaps your parents can offer him $300,000 for the building, as it currently stands. If the profitability of the Restaurant will permit it, it is frequently more advantageous to sell with property, than without.
A second option depends upon the nature of the business, itself. With 50 years of history, is the Restaurant popular enough and have a sufficiently resilient brand to withstand moving it? Frankly, sometimes moving it is the kiss of death, for a Restaurant. But if the move can be made closely enough to the current address, offering the same traffic and parking patterns that would allow the current patrons to continue to frequent the new place, it can be successfully relocated. If your parents can "sell the brand" and allow the new owner to move it, the price would be less than if they move to the new location and prove that the brand transferred successfully.
If you want to chat about it, give me a call: Don Barrick at 410-715-0700.