If you are interested in selling a restaurant, these three tips provide you with a guide for the best results. These basic concepts can help insure your desired outcome; selling your restaurant for the most money in the shortest period of time.
Tip #1 – Reveal that Dirty Laundry when Selling a Restaurant
Establishing a relationship of trust with your restaurant broker is a must when you are selling a restaurant. The relationship between you and your restaurant broker should be open and honest with a “no surprise” policy. It is important to make sure your restaurant broker is aware of every negative aspect of your business, so you must pull out all of your dirty laundry and reveal any liability for the sale to be successful.
Although you may feel embarrassed to tell your restaurant broker about a recent liquor license citation, a tax lien in the hundreds of thousand dollars, back rent that is owed to the tune of thousands of dollars, or even a lawsuit that you are facing from an employee, trust us, the restaurant broker has seen it all before. Talk about these issues openly so your restaurant broker can help you resolve the issues and move the deal to the closing table. Remember that the restaurant broker is highly skilled at dealing with these issues and they are equipped to help you through them one by one. It’s only when you attempt to hide issues like that that they become a reason the deal will fail. Be open, honest and trusting with your broker and he or she should be the same with you.
Tip #2 – Set Clear Expectations for Communication
Nothing is more disappointing than signing a listing agreement and having communication go silent. However, remember, that restaurant broker is concentrating on selling your restaurant. He or she is highly engaged every day with buyers, distributing information, doing calls and sending the would-be purchaser as a secret shopper to visit your business. If it’s important for you to be looped in on all activity, set these expectations ahead of time. Ask the restaurant broker what forms of communication they use and establish how you want to receive contact. Do you want a text each time someone’s “hot” or do you want information weekly whether a buyer is fully engaged or not?
Ask the restaurant broker to explain their typical style and form of communicating buyer interest to you as the seller. Some restaurant brokers use high tech systems that automatically notify you by email when there has been an inquiry about your listing. Other restaurant brokers will simply call you when someone responds to the listing. Then there are restaurant brokers who are poor communicators and will never contact you. By establishing what is important to you, trust is built between you and your restaurant broker.
Tip #3 – Make sure you have a Valid and Enforceable Agreement
Formalize a listing agreement contract with your restaurant broker. Define exactly what it is that you are selling and which parties are authorized to sign so the deal can move to the closing table. This will help you to avoid any misunderstanding and make the transaction process go a lot smoother.
If there is more than one partner involved with your business, obtain their consent and sign a corporate resolution to sell in advance of the listing agreement. Following this process protects you in the event that one partner is not available or the closing or has a change of heart while everyone else is ready to sell. Obtain a corporate seal on a document that confirms that all corporate partners have met and agreed to sell the business. Make sure this corporate resolution indicates a vote was taken to sell and designate a partner authorized to sign in the absence of the others.
Further confirm the validity of your agreement by confirming the legal standing of your corporation. You can visit the Secretary of State website to check the status of the LLC or corporation on the contract. Make sure the latest corporate filing has been made. Confirm your entity is in good standing and has not been administratively dissolved due to non-filing or non-payment. An entity that is not in good standing cannot be a party to a transaction so this has to be handled before signing a listing agreement or purchase contract.
After following threes three tips for selling your restaurant, follow through on your daily responsibilities. Run your business at the highest possible level. Keep it staffed and continue doing the things that deliver a great return for you today. The last thing you want to do is pull back on marketing, staffing or quality while you are on the market.
Then trust the Restaurant Broker to do the job you hired them for. Wait for the offer to come in and imagine the next step in your life after selling your restaurant.
Interested in selling your restaurant? Click this link for a free valuation of your restaurant from We Sell Restaurants.