The restaurant brokers traveled to Chicago recently to attend the National Restaurant Association show. What was on the agenda and why attend as restaurant brokers? That was a question asked by one attendee we met in line. Here’s the answer. The National Restaurant Association annual trade show places all off the most impactful bran
ds, trends, restaurateurs and industry professionals in one place once a year. We experienced everything from Food Network stars to seminars and product roll outs to tastings. Combine that with business meetings with franchisors and exhibitors and this was a winning show. All of that helps us do our job better as we help other buy a restaurant or even sell a restaurant.
After all, a full service restaurant brokerage firm is a value added proposition. We do more than simple match a buyer and seller and walk away. We are often called upon before or after the sale to assist with every element of the transaction. We may be asked about food trends (easily learned at the seminar “Menu Trends” hosted by Nancy Kruse at the restaurant show. A buyer may want to know how to offer the latest in delivery of beer (how about a beer cooler that takes up less than 8 feet by 2 feet on the floor and doesn’t require a separate keg cooler). A seller may want to know where he can find suppliers for products to replace outdated practices (like using conventional labels on food versus a great vendor called Pan Pens that writes on and wipes off).
The restaurant brokers will be blogging (and sharing video) for days about all the sights, sounds, trends and learnings of the show but here are a few photos that caught our eye on first pass through.
High End Furnishings –
If you want to elevate the look of a restaurant, there are vendors touting the most upscale interior furnishings we have seen in a while. Check out the photo of this tufted and buttoned high top booth in a color that says “look at me!”
Food Allergies/Gluten Free/Vegetarian/Organic
An entire section of the show was dedicated to gluten free and other food allergies. One National Restaurant Assoociation publication said 30% of all restaurant patrons were seeking Gluten Free alternatives. Trust the restaurant brokers on this; vendors are reacting and there is no reason your menu shouldn’t be reflective of this option which has far outgrown “trend” to be outright “demand” by consumers.
Keg to Table –
There were lots of vendors demonstrating table top delivery of beer or draught taps created for a maximum visual impact. These are sure to spark more sales so there’s definitely a reason to check out an upgrade if you’re doing what you’ve always done.
Food, Food and More Food
The restaurant brokers were stuffed from sampling one (was it only one?) of everything on the floor. We saw tons of ready-made products that were fresh tasting and fast. Most options were minutes from freezer to table with minimal effort by your staff and great taste profiles. If you haven’t visited a food show lately, break out of your routine and get there. The restaurant brokers saw multiple opportunities to cut down on costly kitchen labor prep costs and get great taste options for your menu.
All in all, this was a fantastic opportunity to meet up with those in our industry, continue to strengthen our relationships and knowledge base and prepare to help our customers in even more ways as restaurant brokers. We will be sharing a lot more from this show in both written and video form over the coming days on our blog.
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
The Blank Foundation recently hosted a group of community leaders to hear a presentation by James P. Owen, the author of Cowboy Ethics and The Try. This restaurant broker was fortunate enough to be in the group when Falcons owner Arthur Blank introduced the speaker.
Blank shared his first introduction to the writer when his daughter bought him the book, Cowbow Ethics for a special occasion a few years ago. (This restaurant broker now knows what it is you buy for billionaires by the way – it’s a book.)
As Mr. Blank shared his passion for this author’s work, it was apparent that it made a meaningful impact on him. He decided to share that impression with others in Atlanta by bringing the author here to speak to community leaders.
I was struck by both the passion and straightforward logic of the author who was clear that he was not a cowboy by birth but was like many of us, enamored with the settling of the wild west and the cowboy law that governed on the plains both a hundred years ago and today.
For a restaurant broker, many of these ten principles to live by have as much application to the restaurant industry and our buyers and sellers as they do in everyday life. Each principle (and there are ten) translate to a way of living your life and operating a business that is a business model for modern ethics.
Here are the Cowboy Ethics or 10 Principles to Live By as outlined by the author and championed by Arthur Blank.
- LIVE EACH DAY WITH COURAGE
It’s clear to me as a restaurant broker that both buyers and sellers live up to this principle when they stake their lives and their family’s livelihood in the American dream. There are no guarantees in entrepreneurship so it takes real courage to start a restaurant, buy a restaurant or even sell a restaurant.
- TAKE PRIDE IN YOUR WORK
This principle is apparent in the restaurants we sell that are successful and even for some that are not as successful.
- ALWAYS FINISH WHAT YOU START
This was a familiar lesson in my home growing up and it rings as true today as a principle both familiar on the plains and evident in practice. Don’t start something you can’t finish or finish what you start.
- DO WHAT HAS TO BE DONE.
The fourth principle, to “do what has to be done” makes me think of the restaurant owner that covers a shift when his cook calls out sick or covers the payroll when the receipts run low for the week. There are a lot of people in this industry that don’t ask for credit, they simply do whatever it takes for success.
- BE TOUGH, BUT FAIR
Being tough is a principle that may not be as “stylish” today where everyone gets an award for showing up. As a restaurant broker, I find it critical to be tough on both buyers and sellers some days and I make no apologies for it as long as I’m being fair to both parties.
- WHEN YOU MAKE A PROMISE, KEEP IT!
This is another of the old fashioned type principles that cannot be stressed enough Does anyone remember what happened before cell phones when you had a meeting? I do. You simply showed up, on time at the appointed meeting time and place. Now it’s all too easy to simply “call” to say you’re running late. I lose track of the people buying a restaurant that make a commitment to follow up by a certain day or time only to totally fail on this time honored premise to keep a promise.
- RIDE FOR THE BRAND
Branding was born in the Old West with a mark associated with the livestock of every rancher. That brand stood for ownership and still does today. For those working for a company, this is still sage advice. Ride for the brand and wear it with pride.
- TALK LESS AN SAY MORE
As a restaurant broker, my job is sales. I need to remind myself of this principle of the cowboys. Sometimes the greatest impact comes from saying nothing.
- REMEMBER THAT SOME THINGS AREN’T FOR SALE
Honor. Loyalty. Truth. These are just a few of the things that can’t be bought or sold, a principle in the Old West that’s just as relevant today.
- KNOW WHERE TO DRAW THE LINE
The last principle is knowing where to draw the line. You always know where stood with a cowboy if you think back to those old westerns. If you crossed the line there was clear retribution.
In addition to these ten principles, the author also spoke to a way of life for the cowboy known as “the Try.” The “try”in cowboy speak means never giving up and continuing forward. Jim has taken this entire principle into a new book and even a series being taught to young children in school. Between the ten principles and the “try,” he is sharing a message of honor, self-reliance and integrity in a world where it sometimes feels to be in short supply.
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
Are you about to buy a bar in Georgia that is open and operating? Don't forget that you will need to apply for a liquor license. It's a relatively straightforward process and the restaurant brokers are happy to share the basics. If you choose to go on your own, just make sure you're a stickler for detail and fill everything out correctly. Here's a BIG HINT. If you're buying a bar, get a COPY of the last liquor license application. Since it was obviously approved, copying the information is a big short cut to getting the forms right.
If you want some help, there are attorneys that specailize in the process or firms known as liquor license facilitators. They charge big fees (low end $3500 to high end $10,000) to process the paperwork we describe below.
Another little known fact. Almost everyone assumes that the state of Georgia controls the license process. In fact, the LOCAL municipality is the one that issues your liquor license and controls the process for you. That can mean that some items will differ if you are buying a bar in the City of Atlanta versus the City of Snellville or whether you need a liquor license for Fulton County or Cobb County. Once you have your "local" license issued, the state license is a rubber stamp. The city or county also charges the most for the liquor license ($8000 in Atlanta versus $3500 in rural areas) while the state charge is only $400 or so.
Some requirements are the same no matter where you buy a bar in the state and others may vary from municipality to municipality. First, understand where the bar you are buying is located. Are you within the city limits? If not, what county are you in? That will drive part of the application process.
For ALL applicants, the State of Georgia has some standard requirements for applying for the liquor license. You have to be a resident of the city or county where you are applying for the liquor license if you are about to buy a bar. If you're moving from out of state when you buy your bar, you'll need a lease, a utility bill or a tax record to prove you're a resident. You also have to be at least 21 years old.
The other thing you must prove to get your liquor license if you buy a bar is that you are either a U.S. citizen or permanent resident. That means a passport or green card (or equivalent). That being said, what if you don't meet those criteria? Well, it's possible for the license to be held in you wife, partner or manager's name until such time as you reapply for a change of owner and then move it into your own.
You will also need to visit the local police station and get your fingerprints taken for a background check. The length of time to complete this varies by area and an increase in concealed weapons permits in some states have background checks running seriously behind. That has not been the case so far in Georgia (at least according to the restaurant brokers sources), so you should still have a pretty quick turnaround.
Visit the Georgia Department of Revenue website (www.dor.ga.gov) for some of the statewide application forms. These may include:
- Certificate of Residence for Retail Liquor License or the ATT-14 form
- State Beverage Alcohol Personnel Statement or the ATT-17
- Retailers and a Consumption on Premises Liquor License or the ATT-59
You will also need to file the application for the alcohol permit. This is where the process may deviate from city to city. Visit your local City Hall to obtain the application package (which will also contain the state forms).
Some cities then require that you attend an NPU or neighborhood planning unit meeting. The city of Atlanta has this requirement. Prior to attending NPU, you may also need to attend the local neighborhood association meeting for a vote. While these meetings are basically "rubber stamps," it is a very good idea to show up in person (rather than sending an attorne
y), meet your neighbors and introduce yourself. Pay attention to the timing as some only meet once a month so getting on the agenda is important so you don't have to wait an additional 30 days.
The restaurant brokers also recommend you pay a hundred dollars or so and join the local neighborhood association. You're coming into a community - why wouldn't you start making friends and drumming up some business for yourself?
Once the NPU has a positive vote, you are issued a liquor license from the city and the state follows suit in close order. That's it. It may seem daunting to get a liquor license when you buy a bar but if you can follow these steps, you'll be serving drinks in no time.
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
National Restaurant News and MillerPulse partner to survey and report restaurant sales in an exclusive operator survey and the April 2013 numbers are in. The restaurant brokers, along with others in the industry are excited to see a rebound in sales after a relatively slow first quarter.
MillerPulse reports Industry that same-store sales rose 2.9 percent in April, an improvement from the 1.3-percent increase reported in March. You may recall the restaurant brokers recent article which showed that Atlanta outperformed the national trend in first quarter so we expect that to continue when April numbers are released for the local marketplace.
The national survey results includes full-service restaurants (casual and fine-dining brands) along with quick-service (fast-food and fast-casual). According to MillerPulse, they compiled date from 66 operators that represent about 21 percent of all restaurant sales.
When looking at the data by category, fine dining actually led the results of the survey. The data showed fine-dining restaurants with a 5.1-percent increase while fast-food and fast-casual restaurants saw increases of 2.8 percent and 3.0 percent for the month, respectively. Casual-dining segment saw sales increase 2.5 percent, its strongest performance since January 2012. Traffic was also up for the month, its first increase this year.
The restaurant brokers are getting sales results in from our markets and expect that Atlanta and South Florida will report similar trends since weather improved significantly for most operators in the month of April. Colorado was hit with unseasonably cold weather with one baseball game cancelled because of a snow storm so we don't anticipate the same gains there.
Here is the graph released by NRN/MillerPulse of same-store sales and traffic measured against the prior year for each month.
According to Miller of the MillerPulse survey, “The two-year trend in April was relatively unchanged, suggesting easier comparisons helped the month,” Miller said. “The good news is sales comparisons generally get easier for the rest of 2013.”
In addition to measuring actual results, the survey data also asks operators to share their forecast for upcoming periods. According to the article, "Surveyed operators were largely optimistic looking ahead, Miller said, with 82 percent saying that better sales trends would continue moving forward. Overall, operators across all segments — fast-food, fast-casual, casual-dining and fine-dining — said they believe sales will improve over the next six months." That is also on par with what these restaurant brokers are gleaning from our markets. Optimism seems to be at an all time high with many more contracts being put on the table and multiple offer situations ensuing on restaurants for sale.
Consumer confidence was also up in April 2013 with national consumer confidence turning in an unexpected 68.1 level versus 61.9. Consumer confidence, measured by industry group the Conference Board beat expectations by both economists and pundits.
What do the restaurant brokers forecast for the trends in restaurant sales? Eric Gagnon says, "We see continued increased sales for restaurants along with better profitability. Most operators have weathered tough economic times and become much leaner over the past three years. Now that sales are rising, they are benefiting from increased earnings passing direct to their bottom line."
Restaurant broker Robin Gagnon adds, "Along the consumer front, confidence is higher as evidenced by all the sales, offers and activity on restaurants for sale that we are seeing. All in all, dining out is a way of life for most Americans and they are not going to keep that experience on hold very long. It's an easy way to treat their family to a simple pleasure that isn't tremendously expensive. Restaurant operators have done a good job creating value meals and offers to drive them in the door and reinforce this message."
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
It seems straight forward. Someone has the pay for the effort and services of a restaurant broker. Why wouldn’t you get a better deal if you’re buying a restaurant by avoiding this fee? Here’s thhe business case that shows it is FALSE to believe you will save money buying a business without a restaurant broker.
You’re not Paying the Bill but You’re Getting the Benefit
Restaurant brokers are paid by the seller, not the buyer. The contract between a restaurant broker and his seller stipulates the commission is paid whether they participates in the sale or not. There is (in almost all cases), a legally binding listing agreement in place. Forgoing the services of a restaurant broker means you’re just blowing off good advice that could potentially save you money or gain you an advantage in negotiations.
The Restaurant Broker Has Seen It Before
It may be your first time buying a restaurant but the broker has done this dozens (or in this restaurant brokers case), hundreds of times.
Experience matters when buying anything. Why not get the benefit of that restaurant brokers knowledge and expertise. He or she (in my case) will have encountered virtually every scenario in a sale and have a strategy that has worked in the past. Here’s an example of a creative strategy we applied to a deal that closed a week ago.
We had a buyer and landlord at a stalemate over a personal guarantee and the buyer was ready to walk. With the creative assistance of the restaurant broker, the seller provided a wrap-around guarantee which gave the buyer enough comfort to move forward on the transaction.
That’s only one example of the many creative ways to get a deal moving forward versus stalled at an impasse. That’s why our restaurant brokers average an astounding 90% closing rate versus a business brokerage industry average of only 30%.
The Restaurant Broker Acts as the Middle Man
A buyer and seller are automatic adversaries to one another in a deal. The seller wants the highest price and the buyer wants to pay the least. The broker has facts, figures, comparable sales and information that demonstrate why the pricing is either justified or should be adjusted. By the same token, the seller and landlord may be at odds over unpaid rent or CAMS or just have bad blood between them. The restaurant broker is an independent third party that (typically) has a landlord relationship who can “sell” a buyer to the landlord as part of his or her services. That may be the difference in being approved or denied on transfer of the lease
A restaurant broker will often save you more than their fees.
As a restaurant broker I fight for my client and their interest. If there is an advantage to be gained, I exploit it. It is a rare scenario that this restaurant broker doesn’t earn back my commissions in benefit to the buyer. Here are just a few ways you may see that happen.
Negotiation of Personal Guarantee with the Landlord
Presenting a client to the landlord is an art and as restaurant brokers, we have perfected the method of minimizing ongoing personal guarantees to the buyer. That may not be worth hard dollars today but exiting a lease in the future without any personal liabilities going forward is worth its weight in gold.
Reduction of Deposit
Reducing the up-front costs of acquiring a restaurant by managing a deposit down is one benefit of using a restaurant broker. Strategies we have used include delayed deposits (where more money is put down after 90 days), diminishing deposits (where a portion is returned after the first year) and applied rent deposits (where a portion of the deposit is applied to rent after the first year).
Restaurant Brokers Have a Resource List of Solid Gold Suppliers
As a restaurant broker selling hundreds of restaurants, I know who delivers (on time) and at the best pricing. It is an everyday occurrence for my clients to request an insurance quote from our resources and find it to be 20 – 30% BELOW other vendors. Your restaurant broker is flat out – connected – in the business. Whether you need to know the best price on food or the most effective email marketing company in the game, they have the answers.
True or False? It’s easy enough now to see why it’s a false statement to believe you can save money buying a restaurant without a broker
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
Trying to figure out what to do next with your life? Have you considered a restaurant broker franchise? The We Sell Restaurant business model for restaurant brokerage is exploding and here’s why.
There are over 980,000 restaurants in the U.S. according to the latest Fact Book published by the National Restaurant Association. At any given time 20% of those restaurants are for sale. That’s a lot of businesses that need the specialized services of a restaurant broker to help them change hands.
At the same time, the popularity of The Food Network and all things “foodie” are driving unprecedented demand for buying a restaurant and that’s not all.
Industry research indicates that the next ten years will be the most active in franchise re-sales than at any time in our nation’s history. Why? Legacy franchises are now in their third generation of ownership. They were launched by early adopters in the 50’s when the interstate road system gave rise to the franchise model. These same franchise restaurants passed to the next generations in the 70’s or 80’s within families. Now the grandchildren of those original owners hold the reins to the business. They want to trade out of the old (Burger King, Arby’s, etc.) and into the new (Which Wich, Yogli Moglii etc.). That means turnover in franchise restaurants for sale and for restaurant brokers, that’s job security.
Those aren’t the only reasons to buy a restaurant broker franchise. Finding restaurants for lease is also on the rise as franchise and independents outsource their site location. Gone are the days of staffing a real estate department. It’s easier to ask the restaurant brokers to take on the project of finding new lease space for restaurants rather than employing someone full time.
For all these reasons, the field is growing. We Sell Restaurants has developed the leading franchise model for restaurant brokerage in the nation. We start with training and end with the B.O.S.S.© our Brokers Operations and Sales System©.
Selling restaurants is a specialized skill. The We Sell Restaurants business model for restaurant brokerage takes every franchisee through a four week intensive training program and testing. The successful completion of this course of study leads to designation as a Certified Restaurant Broker, the only such accreditation in the country.
The B.O.S.S. © or Brokers Operations and Sales System© is the We Sell Restaurants proprietary software code that makes our brokers the most efficient and effective in the business. Our in house developed software tracks buyers, sellers, leads, listing activity and stores all information “in the cloud” so it’s available to our franchisees from an Ipad, Smart Phone or desktop.
Are you the right fit for buying a restaurant brokerage franchise? The best candidates are:
Former Restaurant Owners
Face it. No one knows the business better than someone who has operated their own business. The restaurant broker franchise is perfect for a former independent or franchise owner who loves the business but doesn’t want the hours or headache of owning a restaurant anymore.
Former General Manager or Regional Managers
If you ran a large concept or served as a Regional Manager you’re familiar with successful practices, standard operating procedures and the restaurant industry. You’re a good fit for our restaurant broker franchise.
Outplaced Franchise Real Estate People
If you worked for a franchise doing site location and found yourself replaced by the restaurant brokers, we recommend you join our team. You understand the business and know what site location is all about. We’ll teach you to sell restaurants in our restaurant broker franchise model.
Franchise Salespeople
Successful franchise salespeople who want to try their hand at selling open and operating units rather than the “dream” of the next big franchise may also be successful candidates for our restaurant broker franchise.
The restaurant brokerage model is exploding. We Sell Restaurants is fielding leads from all over the country for our services. Why not join us in meeting this demand?
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Want more information on Buying a Restaurant Franchise? Click Here
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
It seems simple enough. You drive down the road and like the childhood game of “I Spy,” played with your sisters and brothers in the car, you spot the vacant restaurant for rent in the shopping center. It’s the perfect location. It seems like the right size. There isn’t another pizza place in the shopping center (your concept). Lastly, it’s close to your house. Immediately, you whip out your cell phone, make a call and get connected to the leasing agent. STOP. You just made your first mistake in leasing a restaurant. Here’s why.
The leasing agent who took your call works for the landlord. He is under contract for the landlord. That means he or she has no interest in protecting your concern in the transaction. His loyalty is to the person paying his bill and that isn’t you.
Here’s what the Landlord’s Representative will tell you.
- Base rent level
- CAMS
- Size of Space
Here’s what he won’t tell you
Why the last guy left
If the last tenant was a pizza place that defaulted on the lease because the guy one shopping center over has a lock on the business for a three mile radius, he’s under no obligation to tell you this.
If he’s Overpriced
If the average rents in this area are $15.00 per square foot and they are charging 20% more because the landlord “wants” that number, he’s under no compunction to share that information.
If the Infrastructure is Sufficient for a Restaurant
If the HVAC unit is 2 tons for 1400 square feet (undersized for a restaurant) and the last restaurant shut down because the patrons couldn’t take the heat, he won’t feel the need to disclose this. Likewise, if the electrical panel is a basic 200 amp one that shut down every Saturday night as soon as they brought on the extra pizza oven to handle the traffic, he probably won’t feel the need to reveal that information if you don’t ask.
If Competing Properties are Available
If the restaurant space in the next shopping center (owned by a different landlord) in a better location is available for less rent, he will feel no requirement to share that since he doesn’t represent that shopping center.
Is it becoming apparent why you should STOP before calling the number on that sign? Want to know what to do instead?
Contact a restaurant broker to represent your interest in the transaction. There is no additional cost to you for this effort (at least not from We Sell Restaurants). When our restaurant brokers represent your interest they will:
1) Give you an overview of other operators in the area and any information available on how they are doing
2) Review comparable and/or nearby centers for lease rates and availability (even if listings aren’t publicly known).
3) Ask the landlord to provide HVAC, Electric, Grease Trap and Hood information/capacities so you can verify with your contractor, electrician or architect whether they will handle your equipment and/or cooling needs.
Here’s what the Landlord’s Representative wants from you
- Personal Financial Statement
- Menu
- Business Plan
- Lease Application
- Maximum Rent
- Maximum Personal Guarantees
The Restaurant Broker will have the forms, documents and templates to prepare you for submission to the landlord including personal financial statement forms, business plan templates and applications. He will review the data before it is submitted so it puts you in the strongest negotiating position.
Here’s what the Restaurant Broker will negotiate to get FOR you
- Best Base Rent Rate
- Best CAMS deal including locks, fixed levels or maximum increases
- Minimal Personal guarantees
- Exclusivity for your concept
- Vacancy clauses
It seems pretty apparent to the restaurant brokers that leasing a restaurant is a little tougher than simply the childhood game of “I Spy” and a phone call. Do you agree?
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
Robert Wagner, CPA and president of NetFinancials, Inc. has issued his first quarter report on restaurant sales. It’s not great news but it’s not bad news and the restaurant brokers agree with his data based on feedback from our clients.
Wagner reports that first quarter sales were up over last year in the Atlanta marketplace by 2.4% percentage points. That's the word according to 61% of the restaurants surveyed by the firm in their quarterly report. 10% reported double-digit sales gains over last year. Compared to the national scene, this was good news since overall restaurant operators nationwide experienced a 1.3% negative sales result when measured against last year. That’s according to Wagner who says the negative 1.3 percentage point trend was issued by Black Box Intelligence, a restaurant sales and traffic-tracking company.
Was the Atlanta trend as positive as 2012? No and in the restaurant brokers opinion, much of this can be attributed to the weather. Temperatures have been consistently below normal while rainfall has been far above last year for each month of 2013. The restaurant brokers are hearing from clients in outdoor shopping center (Atlantic Station for example) or those with patios that are typically packed during our great March weekends that the weather has been brutal in impacting sales. The good news is that Spring really is around the corner and all restaurant operators will benefit before long with better sales news.
Wagner agrees with the restaurant brokers assessment on the weather saying, "“Restaurant operators attribute the tepid Q1 results to bad weather and sagging consumer confidence. For many operators the quarter was salvaged by strong March 2013 sales.”
The sample for the survey was a group of 88 independently-operated, non-franchise restaurants from the metro Atlanta market. Total Q1 2013 survey sales volume was $50,806,603. The CPA firm’s sample included restaurants in Atlanta’s fast-casual, casual and fine-dining segments opened at least 15 months.
Robert Wagner, CPA is president of NetFinancials, Inc. which provides a full range of tax and accounting services for restaurant companies. Email: bob.wagner@netfinancials.com. www.netfinancials.com Direct: 404-874-7002
This NetFinancials restaurant sales survey is provided free of charge as a service to the restaurant industry
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
There are a number of often quoted statistics that have to do with the failure rates of restaurant. In reality, restaurants don’t truly “fail” much more frequently than most other start-up businesses. The most reliable statistics were produced at Ohio State University who studied start up restaurants over time and developed statistics that cite a 57% failure rate in the first three years.
As restaurant brokers, we are the first to be called when the owners need to sell. At that time, all the dirty laundry is revealed. In selling hundreds of businesses, the restaurant brokers have developed a list of the most common reasons why they flop in the first three years.
Lack of Capital
This is the number one reason why restaurants don’t succeed. Owners put a business together and inevitably over-invest in the build out without reserving enough money to operate. It can take from 12 to 18 months for your restaurant to produce positive cash flow. Opening without enough cash in the bank to cover basics is a recipe for disaster. The restaurant brokers advise you have six to nine months of fixed costs (rent, basic utilities and fixed salaries) in the bank before launching. Then carefully manage your variable costs (like food and labor) based on traffic. Between those two actions, you’ll have sufficient cash flow to make it through that critical first year or so.
Failure to Market
Lack of capital leads to cutting or eliminating marketing dollars and it’s a common reason why restaurants fail. Operators open with a “if I build it, they will come” mentality. That doesn’t work in any business. You will need to identify your customer, find out how to communicate with them, test marketing channels and do it some more before a steady base of business is developed
Absentee Ownership
The restaurant business is a people business. It is very difficult to delegate this to someone else. Customers expect and need to see the owner’s face in the business. When you leave that critical function in someone else’s hands, you can expect that no one will ever do it the way you would. This is proven by the numbers of times we have owners tell the restaurant brokers they work another job but own the business.
Partnership Disputes
Best friends, boyfriends and girlfriends, or husbands and wives. It doesn’t seem to matter who the “partners” in the business are, partnership disputes are a leading cause for failure. Until you’ve been in business with someone, you don’t really know them. One partner puts in less money than the other. One partner gets a corporate offer and leaves the other high and dry running the restaurant on his own or in the case of a romantic relationship (marriage or otherwise), someone falls out of love. It’s another reason the restaurant brokers are called to sell a restaurant.
Bad Food and Bad Service
As a restaurant broker I have never had a seller tell me their restaurant wasn’t making it because they offered bad food and bad service. On the other hand, no one admits they have an ugly baby either and I remember a hysterical Jerry Seinfeld episode on this. All I need to do as a restaurant broker is a Google or Yelp search to see what customers are saying before I list the restaurant. When the reviews say, “I don’t like the food” or “I can’t get the server’s attention” I know I’m listing that restaurant for sale and someone’s getting a deal.
So now you know the truth. It’s up to you when buying a restaurant to make sure your failure doesn’t lie in one of these reasons. The good news is that these are all controllable. The bad news is that you’re committing to a lifestyle, an industry and a way of life. If you’re not ready to do that, it’s best to avoid buying a restaurant.
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com
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Want to know what's hot for buyers looking at restaurants for sale? These are the top ten restaurants for sale last month according to the restaurant brokers reports of online traffic, signed confidentiality agreements, calls to the office and listings with offers.
Leading the top ten parade is a restaurant that went for zero! That's right. A new owner picked up this location in Atlanta with lots of equipment and no money at all. It's no wonder we had multiple letters of intent and it's going, going, gone!
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Used Restaurant Equipment in Place at this Vacant Restaurant for Rent
Lease: 5 year term plus 5 year option
Monthly Rent: $1900
Inside Sq. Ft. 1100
Outside Sq. Ft.
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Price:$0
City:Atlanta
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Boca Raton is heating up and this low price pizza restaurant for sale got lots of looks and tons of activity. Restaurant broker Ken Eisenband, our franchisee in South Florida fielded multiple calls on this exciting listing which led the top ten list at number two this month. He presented the landlord with multiple letters of intent and a lease is out for signature.
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Turnkey Pizza Restaurant in West Boca for Lease - 10K Key Money
Lease: 5 years + option
Monthly Rent: $2300
Inside Sq. Ft. 1500
Outside Sq. Ft.
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Price:$10,000
City:Boca Raton
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This bar for lease in Sandy Springs has been in the top ten for several months. We are actively working with buyers now to get it locked up and under contract soon. Keep a watch for the restaurant brokers to announce someone new going into this location.
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Bar and Restaurant for Lease Sandy Springs - Metro Atlanta - Great Deal!
Lease: 5+5
Monthly Rent: $6,420
Inside Sq. Ft. 5,200
Outside Sq. Ft. 5,200
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Price:$0
City:Sandy Springs
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A brand new listing for a bar and grill in Kennesaw brought lots of looks on the website along with plenty of buyers checking it out. Great rent, an established clientele and Kennesaw - home to KSU and the highest growth rate in the Georgia state college system and it's no wonder buyers were interested in this restaurant for sale.
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Bar and Grill for Sale Established for Over a Decade - Profitable!
Lease: Ends April 30, 2014
Monthly Rent: $4675
Inside Sq. Ft. 2500
Outside Sq. Ft. 400
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Price:$149,900
City:Kennesaw
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North Fulton demographics with six figure households, plenty of children and lots of eating out are reasons why listings in Alpharetta always get lots of interested buyers. This quick service restaurant for sale is priced at assets and can be anything a new buyer wants.
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Quick Service Restaurant For Sale Priced to Move!
Lease: expires June 30, 2015 + 3 year option
Monthly Rent: $1750
Inside Sq. Ft. 1325
Outside Sq. Ft.
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Price:$80,000
City:Alpharetta
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Six figure earnings in the North Georgia mountains made this restaurant for sale in Georgia a popular choice among buyers. The high earnings and potential for SBA lending also increased the "interest" level.
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Restaurant and Bar for Sale in North Georgia Nets Owner Six Figures
Lease: 4.5 Years remaining Plus 5 year option
Monthly Rent: $4000
Inside Sq. Ft. 3500
Outside Sq. Ft.
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Price:$395,000
City:North Georgia Area
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This sports bar for sale in Smyrna made a big impression when it was released in the marketplace in the month of April. Buyers liked the look of this fully equipped location with a very reasonable rent and the pricing at less than $200,000. It's a popular listing but no buyer yet so if you're in the market, this could still be the one.
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Turnkey Sports Bar for Sale in Smyrna Georgia
Lease: expires in 2014+ 5 yr. option
Monthly Rent: $3500
Inside Sq. Ft. 4300
Outside Sq. Ft.
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Price:$185,000
City:Smyrna
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A downtown restaurant space for lease by the restaurant brokers nearby the stadium, lots of growth and the federal building drove a lot of traffic and views by our buyers. This location is winning opportunity to take over a former restaurant space. Landlord is willing to work with the right tenant.
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Downtown Atlanta Restaurant for Lease is Poised for Success
Lease: 5 years plus 5 year option
Monthly Rent: $5000.00
Inside Sq. Ft. 4000
Outside Sq. Ft. 500
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Price:$0
City:Atlanta
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This new restaurant for lease opportunity in Midtown Atlanta was a serious contender in the top ten where it debuted at number nine in its release.
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Vacant Restaurant for Rent in Midtown Atlanta
Lease: 5 year new lease term plus 5 year option
Monthly Rent: $5443.00
Inside Sq. Ft. 1960
Outside Sq. Ft. 500
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Price:$0
City:Atlanta
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Our Which Wich multi unit opportunity was an incredible success with multiple offers in the first four days we listed it. It is under contract and the seller is accepting backup offers only at this time.
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WhichWich Franchises for Sale - Multi Unit Earns $313,000 ON THE BOOKS
Lease: #1 5 years plus 3 (5 year) options and #2 10 years
Monthly Rent: $#1 4907 plus CAMS and #2 5746 plus CAMS
Inside Sq. Ft. Varies
Outside Sq. Ft. 500
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Price:$995,000
City:Metro Atlanta
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April 2013 was a record breaking month with colder than expected temperatures but hotter than ever restaurants for sale from the restaurant brokers. There are some clear opportunities and some that are already under contract. Want to know more? Click the red link on the listings to "view complete listing" or give us a call at 404 513 5378.
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Eric and Robin Gagnon are founders of We Sell Restaurants, a national restaurant brokerage franchise. These industry experts are also authors of Appetite for Acquisition, full of advice and tips for Buying a Restaurant and winner of the 2012 Small Business Book Award. Described as "the definitive guide for anyone looking to enter the restaurant industry!" readers finish this book knowing how to acquire a restaurant in a way that is less painful, more profitable, and delivers a better return on investment. Visit our restaurants for sale online at www.wesellrestaurants.com