Advice for Buying a Restaurant and Selling a Restaurant

Restaurant Sales Results are Down.  What are you Doing About It?

Posted by Eric Gagnon on Aug 15, 2017 10:00:00 AM

Restaurants sales for most of 2017 have been soft.  We are seeing reports for both of the first two quarters trending below expectations.  The results are the same for both franchise and independents operators. As a restaurant broker performing valuations on a daily basis we always ask potential sellers the same question we are being asked by the bank and the buyers.  Why are your sales declining?  The most common answer we receive is, “I don't know."

Get our there and Sell.jpgIf you have been reading or even just glancing at the headlines in most trade publications you should know this: traffic is down and there are more options than ever before for consumers when it comes down to prepared food. Are you measuring the decline or working to curb the trend?

Owners will often tell us their plan to grow sales is a “wait and see” strategy.  For these sellers, they truly believe, “it will come back on its own; this is a good location." Other reply that they truly don’t have a plan.  As a restaurant broker focusing on business valuation neither of these makes me feel good.  If you tell this to a banker,  don't count on lending any time soon.  They will likely shy away from your deal with either answer. 

Now that the cat is out of the bag let's try to look at what you can do to curb this trend. Here are three ways you can take control of your business today and improve your sales results.

Review and Refresh your Marketing and Advertising Strategies. Marketing and advertising have changed tremendously over the last couple of years.  If you don’t clearly understand how to interact on social media to drive bottom line results, I suggest you hire someone that does ASAP.

Putting your events and daily specials on social media every day is not having a successful social media presence. You need to measure results and look at each offer.  Social media is not the magic bullet to turn your sales around.  It is, however, one of the ‘must-have’ tools in your strategy.

Community Involvement. Old fashioned community involvement seems to have fallen off the radar but the actual bottom line results are still strong from this tried and true method. Churches, little league baseball, youth football, soccer and civic organizations in your area are great potential loyal patrons for your establishment.  Restaurant owners need to go and meet with the leaders of these groups.  Then figure out the best way to get involved and ask how you can personally invite their members or participants to your restaurant.  

Get Outside Your Walls. In this day and age of technology it is very easy and comfortable to stay behind our screens and interact with others though digital means.  You however, chose to be in the restaurant industry which requires human interaction every day with team members and customers. Most of you enjoy the interactions and this why you are a restaurant owner or manager, otherwise you would have become an accountant! In order to gain sales even in slower sales cycle it is imperative for you to reach OUTSIDE of your four walls on a daily basis.  If you are not out there in your local market meeting new people, thanking and inviting customers, someone else is doing it for their establishment. You should be outside the store with a strategy every single week to develop new business.  Is there a new gym opening?  Partner on a coupon for a healthy “side” for free with purchase of an entrée.  Fun K run this weekend?  Buy yourself a tent and invite the runners to celebrate their success with a sweet indulgence – free dessert with purchase of a meal.  There are many ways to get outside the store and develop business.

While we have restaurant sellers trending right on par with disappointing national trends, we have others experiencing double digit growth.  The difference in the two?  Our growth sellers are using the techniques described above. They are not counting losses, they are making changes.  Above all, they recognize the game has changed and it’s time for them to get out there and yes, SELL!!!

 Interested in know what your restaurant is worth in today’s market?  Contact the Restaurant Brokers at this link for a free valuation

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Topics: selling a restaurant

Buying a Restaurant?  Key Elements of Your Business Plan

Posted by Robin Gagnon on Aug 10, 2017 8:33:58 AM

If you are buying a restaurant with SBA lending, it’s a good idea to get your business plan in the works.  The restaurant brokers recommend you build this critical document now and then ask a few trusted advisors to read and provide input.  Does it need to be 100 pages?  No.  In fact, 10 – 12 pages is more than sufficient to capture the items a lender will want to focus on.  The quality of the work is important however.  This document has multiple uses beyond the SBA lender that may require it.  More and more frequently, landlords will want to see that you have a well thought out direction for the business, particularly if you are buying an existing concept. How will you take it to the next level?  What will you keep the same (if it’s working) or change (if it’s struggling).calculator-178127_1920 (1).jpg

Here is a basic outline of the elements most lenders like to see.  Use this to template out your business plan when buying a restaurant and you’ll be ready to impress, whether it’s the bank, the landlord or investors.

Table of Contents

Begin with a table of contents so the reader can quickly reference where they can go to for important information.  There are multiple word templates available that are already set up in a style to capture a table of contents at the beginning.

Executive Summary

Buying a restaurant means you have given this some thought about the who, what, why and when.  Capture those points in your Executive Summary.  This only needs to be a paragraph or two.

Business Description & Vision

Describe the restaurant you are buying and your vision for the future in the next section.  What is it doing now and what will your leadership bring to the future for tomorrow once you buy this restaurant?

Definition of the Market

What is your target market?  Who visits this restaurant and how do you develop a deeper market share?  Look at the current operation when buying a restaurant and figure out how you will grow the business

Description of Products and Services

Tell the reader of your business plan what you are selling.  Describe the menu and services you offer including any catering or outside services in a way that is both enticing and demonstrates your knowledge of this location. If this is a franchise resale restaurant you are buying, it’s easy to pull this from the brand’s website and rewrite it into your own words.

Organization & Management

Lenders and landlords in particular, want to know who they are dealing with.  Who’s buying the restaurant?  Make sure the organization and management section highlights your relevant background and experience.  Be clear in stating your strengths that will transfer to this role, especially if this is your first restaurant.

 Marketing and Sales Strategy

Your marketing and sales strategy is key to landlords and lenders. They see fixed costs, like rent, increasing each year.  What is your sales and marketing strategy to grow sales and offset these increases?  Make sure you spend the most time on this section when buying a restaurant.

Financial

Lenders and landlords want to see financial projections.  As we discussed in our book, Appetite for Acquisition however, these projections need to make sense.  There’s no way you’re buying a restaurant that’s generating revenue of $500,000 this year and it will go to $750,000 next year.  It’s better to be conservative on the estimates rather than overstate them.

Appendices

Additional items that may find their way into the appendices of your business plan may include:  your full menu, photographs, resumes.  This is the space where you add material that support the document you’ve prepared.  Don’t “stuff” this area with a lot of items just to add weight to the plan.

Follow this template to write your business plan when buying a restaurant and your success rate with landlords and lenders will improve.

Contact the restaurant brokers for help with buying a restaurant or see our many restaurant for sale listings below at this link.

 

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Topics: buying a restaurant

Restaurant Brokers Report More Clicks with July's Top 10

Posted by Robin Gagnon on Aug 4, 2017 11:00:00 AM

Report are showing business growth for the 2017 first half is showing up by 31% across the nation. Restaurant growth was among one of the highest growing segments. We Sell Restaurants has seen the small business confidence in the amount of buyers looking to join the restaurant industry. These top 10 listings for the monthly of July have the most acknowledged confidentiality agreements.
 
Number one on July's list of Top Ten Listings in this Denver cafe for sale. This hot listing has only been on the market for 20 days, and at the unheard of price of $15,000 it won't last long on the Colorado market!
Listing ID:5616 Restaurant Broker Bob Steinberger    
Profitable Office Building Cafe for Sale in Denver, Colorado DTC Area!!
Lease: TBN
Monthly Rent: $0
Inside Sq. Ft. Aprox 1000
Outside Sq. Ft. Aprox 2000
Price:$15,000
City:Greenwood Village

Bob Steinberger
(303) 901-4938

This Indian Restaurant for sale in Roswell has been established for two years and has daily vehicle traffic of nearly 50,000 passing by it. The restaurant will see incredible improvements to profit with the development of a lunch menu and increased operating hours. It's ready for a buyer to come in and get to business - all fixtures an appliances are included!

Listing ID:5486 Restaurant Broker Dominique Maddox    
Restaurant for Sale in Roswell with low rent. Can Convert to Any Concept
Lease: Expires October 31, 2018 + 3 year option
Monthly Rent: $2800
Inside Sq. Ft. 1800
Outside Sq. Ft.
Price:$49,995
City:Roswell

Dominique Maddox
(404) 993-4448

Cool off this summer with the purchase of this hot ice cream shop in picturesque Pompano Beach! The current owner purchased this location this year but must move back home unexpectedly - their loss can be your gain for the low price of $90,000. With rent set at just over $1800, this listing won't stay on the market much longer!

Listing ID:5541 Restaurant Broker Ken Eisenband    
Profitable National Brand Ice Cream Shop for Sale in Pompano Beach
Lease: Expires July 2, 2019 plus three year option
Monthly Rent: $1806
Inside Sq. Ft. 625
Outside Sq. Ft. 250
Price:$90,000
City:Pompano Beach

Ken Eisenband
(561) 350-3365

Those in the Georgia market with a passion for soul food won't want to miss the opportunity to cash in on this fried chicken restaurant for sale. The clientele is already well-established and the online reviews speak volumes to the quality of food that this location produces.The current owner is open to all offers - so bring yours today!

Listing ID:5556 Restaurant Broker Dominique Maddox    
Fried Chicken Restaurant for Sale next to High Traffic Gas Station
Lease: Expires September 2019
Monthly Rent: $2000
Inside Sq. Ft. 1200
Outside Sq. Ft.
Price:$74,999
City:Norcross

Dominique Maddox
(404) 993-4448

The Austin market is on fire right now - just take a look at this beautiful bar for sale in Austin on the famous Restaurant Row! The current owner is seeking an equity partner but is also open to selling. Keep this restaurant as-is, or bring your own concept.

Listing ID:5513 Restaurant Broker Dave Duce    
Restaurant and Bar for Sale in Austin - Gorgeous Operating Business
Lease: expires October 2023 + two 5yr options
Monthly Rent: $7520
Inside Sq. Ft. 2710
Outside Sq. Ft.
Price:$199,995
City:Austin

Dave Duce
(512) 773-5272

Bring your own unique concept to any of these restaurant spaces for lease in the growing city of Cumming, Georgia, just north of Atlanta. Spaces start as small as 1400 square feet for just over $2500/month rent and go all the way up to 5000 square feet for less than $8000/month. This locations sees almost 100,000 passing vehicles per day - with visibility in this range these spaces will sell quickly!

Listing ID:5567 Restaurant Broker Steve Weinbaum    
Restaurants for Lease - Choose Your Space Cumming, GA Center
Lease: Negotiable
Monthly Rent: $2528.16 - 7555.60
Inside Sq. Ft. 4814 | 1400 | 1680 | 3995
Outside Sq. Ft.
Price:$0
City:Cumming

Steve Weinbaum
(770) 714-4552

 The second listing in Cumming, GA to make July's Top 10 list is this romantic Italian restaurant. It features ample indoor and outdoor seating, an HVAC system that was replaced in 2016, and a custom built bar. Currently only serving dinner five nights per week, there is an excellent opportunity to increase profits by increasing operating hours!

Listing ID:5533 Restaurant Broker Cyndi Weinbaum    
Established Italian Restaurant for Sale in Cumming Georgia
Lease: Til 3/31/20
Monthly Rent: $6735 including CAMS
Inside Sq. Ft. Approx. 3600
Outside Sq. Ft. Seats 36
Price:$199,000
City:Cumming

Cyndi Weinbaum
(770) 851-5194

 The restaurant business in Texas is red hot, and buyers won't want to miss the opportunity to obtain this gorgeous riverfront establishment with cash flow of $170,000! This is the listing buyers dream of - a beautiful deck overlooking the river, an established entertainment schedule, and sales well over $1million!

Listing ID:5304 Restaurant Broker Dave Duce    
Restaurant for Sale Generates Cash of $170,000! Amazing Opportunity
Lease: expires April 30, 2018
Monthly Rent: $6700
Inside Sq. Ft. 1900
Outside Sq. Ft. 1200
Price:$450,000
City:Bastrop

Dave Duce
(512) 773-5272

The third listing in Texas to make the Top 10 list is this popular franchise sandwich store! Located just outside of Austin next to a university with 40,000 students, and soon to be across from luxury student apartments in September 2017. Keep the same concept, or bring your own!

Listing ID:5405 Restaurant Broker Dave Duce    
Franchise for Sale Great Location - National Brand - keep or change
Lease: expires October 2019
Monthly Rent: $4300
Inside Sq. Ft. 2716
Outside Sq. Ft. 400
Price:$75,000
City:San Marcos

Dave Duce
(512) 773-5272

Don't miss the opportunity to scoop up this 35-year-old establishment in the Ft. Lauderdale! This is a great opportunity for someone looking to retire to the Sunshine State - the cafe closes by 2pm each day and the current owner has over $175,000 in earnings!

Listing ID:5602 Restaurant Broker Ken Eisenband    
Cafe for Sale in Ft Lauderdale Over $175,000 in Owner Earnings
Lease: Expires November 30, 2018, plus five year option
Monthly Rent: $2657.63
Inside Sq. Ft. 1062
Outside Sq. Ft. 100
Price:$299,000
City:Ft. Lauderdale

Ken Eisenband
(561) 350-3365

 The reports are showing small business confidence is up across the nation. The Texas market being one of the most popular locations for two months in a row! If you are looking in Texas think fast before your listing is gone. We Sell Restaurants is showing strong response from across the country. If you are ready to buy or sell  contact  We Sell Restaurants today.

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Topics: buy a restaurant

Record Transaction Levels Reported in Business Sales - Restaurants Lead the Way!

Posted by Robin Gagnon on Jul 28, 2017 5:01:49 PM

The latest report from BizBuySell shows that the count of business sales continues on pace to set records for restaurants sold and businesses sold this year.  Their data shows 2,534 closed transactions occurred in the first half of the year a 31% increase over the same time last year. Twenty-two percent of those transactions were restaurants.  If that pace continues, 2017 will easily surpass 2016 which was in itself, a record breaking year. 

Once again, restaurants led the way according to this national industry report.  Sales of restaurants experienced major growth in the second quarter.  The national statistics that track these transactions found a 34% increase over last year in number of units and the median sales price jumped from $165,000 to $195,000.  The data also found restaurants being sold were experiencing growth in revenue.  The median sales of those restaurants closing in second quarter was ahead of last year by 7 percent.  That meant year-over-year sales went from an average of $504,500 last year to $540,000 this year.  They also noted a small increase in cash flow of 2% pushing average cash flow on restaurants sold to the $100,000 mark. 

2017Q2_Closed_Small_Business_Transactions.png

The reason for the increase in restaurant sales and business opportunities in general can be tracked to market variables the restaurant brokers recently wrote about.  These include unprecedented small business confidence, the amount of quality lending resources in the market, record breaking stock market growth and the use of money that was parked in advance of the election.  While Washington remains caught up in politics as usual and movement is at a stalemate, business buyers and business owners are seeing the impact of loosening regulation, easier lending and better economic conditions.  For that reason, they are pulling the trigger on what is now the second quarter of phenomenal growth in restaurant sales.

The nation cannot be painted with a broad brush however as selling prices by region vary widely.  The most expensive market in the United States based on selling prices is (no surprise!), the New York metro area.  The list of the top five most expensive markets (in order) were New York, Philadelphia, Denver, Atlanta and Chicago.

All business opportunities for sale are not equal.  The recent report shows a difference in the valuation or cash flow multiple between franchises and independents.  Restaurants and all business opportunities for sale are typically priced at a multiple of their existing cash flow.  The latest data shows that the cash flow multiple for franchises was better than all other transactions.  The average cash flow multiple for franchises was 2.44, compared to 2.34 for all transactions.  Those with a trademark name on the door also reported higher revenues compared to the median of all businesses.  For closed deals, median franchise revenue was $609,966 compared to $490,000 for all businesses. According to the BizBuySell report, "This data suggests that despite royalties, established franchises for sale offer additional revenue and marketing benefits, at sale prices comparable to non-franchises." 

The restaurant broker’s internal results also show an amazing year in the works.  President of We Sell Restaurants Eric Gagnon said of the current trend, “We recently hosted the We Sell Restaurants franchisees and reported on the state of the industry.  Our findings and the BizBuySell report align as we see continued strong growth and a record breaking year in terms of transactions.”

The data from today’s report issued from BizBuySell is compiled in the BizBuySell.com Insight Report issued on a quarterly basis.  The report tracks changes in closed transaction rates, valuation multiples and other economic indicators for the small business transaction market.  The full report can be found online at this link

For restaurant for sale opportunities, click the link below. 

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Topics: buying a restaurant, selling a restaurant

More Franchise Restaurant Deals Announced

Posted by Robin Gagnon on Jul 26, 2017 4:17:29 PM

The restaurant brokers have compiled the results of buyers who are opening new franchise restaurant locations from multiple sources.  It appears that franchises continue on an upwards trend across the U.S. Check out the latest deals that are making headlines in the franchise restaurant world!

The pizza industry seems as though it cannot ever reach a saturation point.  We're seeing hundreds of new restaurant franchise deals announced including: Franchise Growth Continues.jpg
  • Rapid Fired Pizza is bringing 44 locations to Texas, and up to 175 new locations to Kentucky, Indiana, North Carolina and South Carolina. The build-your-own pizza concept launched in Kettering, Ohio in 2015 and has 15 locations with another 13 currently under construction.
  • AR Pizza LLC is expanding Dallas-based Pie Five Pizza Co. in New York and New Jersey. AR Pizza also owns 47 Popeye's locations and eight Arby's restaurants. Pie Five is a subsidiary of RAVE Restaurant Group, Inc., which owns, franchises and supplies more than 300 Pie Five and Pizza Inn restaurants domestically and internationally.
  • Pieology franchisee group Kingdom Pies LLC is adding to their Florida locations with a new store in Jacksonville Beach, Florida. Pieology also has locations in Arkansas.
Franchisees are biting into the burger and sandwich market with recent acquisitions including:
  • Potbelly Sandwich Shop added another agreement with the Chicago, Illinois-based company to bring five more shops to the Richmond and Charlottesville areas. Potbelly operates more than 400 locations in the United States, while franchisees operate 35-plus shops across the country and abroad.
  • The largest restaurant franchisee in the U.S.,  Flynn Restaurant Group, acquired another 34 Panera Bakery-Cafe locations. This is the latest acquisition to add to their roster that includes 477 Applebee's and 274 Taco Bells. Flynn expects to build another four Paneras within the next year, and to continue building about 10 Taco Bell restaurants per year.
  • Seth Goldstein, Alvin Goldstein, Mitch Cohen and Marvin Goldfarb opened a Jersey Mike's in Long Island, the first of five to be developed by the franchise owners. The team has industry experience as former multi-unit Dunkin' Donuts and Baskin-Robbins franchisees, and Cohen and Seth Goldstein were recognized by the International Franchise Association as Franchisee of the Year in 2009, and served in multiple leadership roles for both the IFA and Dunkin' Brands.
  • There are 50 new locations signed for the development of Hwy 55 Burgers, Shakes and Fries in Illinois over the next 10 years. . Hwy 55 has 137 locations in 12 states and Denmark and the United Arab Emirates.
  • BurgerFi, a Florida-based better burger concept, signed development deals with four multi-unit franchisee groups to continue expanding in the Southeast and Northwest. BullaFi LLC will build three new restaurants in the Raleigh, North Carolina area; QSR by RAM LLC will open two restaurants in Alabama and Georgia; H&F Investors LLC will develop four restaurants in Oregon and Washington; and AZ Hospitality LLC will develop two restaurants in Kansas

There are also several significant deals being announced in the fast food chicken franchise marketplace:

  • With its most recent acquisition, GPS Hospitality is adding 11 Popeyes Louisiana Kitchen restaurants in its home state of Georgia to its growing franchise portfolio, increasing its total number of Popeyes restaurants in Georgia and West Virginia to 19.
  • Dallas, Texas-based fast-casual chain Cowboy Chicken and Franchise Restaurant Concepts Group announced the signing of three lease agreements to open restaurants in Ankeny, Iowa, Manhattan, Kansas, and Sioux Falls, South Dakota. The units are part of a franchise agreement signed earlier this year with FRC Group to open 14 Cowboy Chicken locations across these three states.

  • As part of an eight-unit development agreement, franchisee Chris Wilson opened his third Slim Chickens restaurant in Lubbock, Texas, last month. A Southern fast-casual concept with a menu of grilled chicken tenders, wings and dipping sauces, Slim Chickens, based in Fayetteville, Arkansas, has more than 50 locations in 11 states.
Other significant acquisitions include:
  • Price Chopper and Dunkin' Donuts have struck up a deal to open Dunkin' stores inside three Kansas locations. This deal comes as Dunkin' continues to put forth efforts to expand throughout the grocery sector. Dunkin' currently has 200 restaurants within supermarkets, big-box retail stores, wholesale clubs and home improvement stores throughout the U.S. Dunkin's future goals include having more than 750 alternative points of distribution including locations in hotels, colleges, mass transit stations, entertainment centers, and military bases.
  • Middle Eastern fast-casual restaurant Mamoun's Falafel is developing six locations in Georgia including the Atlanta and Athens markets. Mamoun's currently has locations in New York City, New Jersey and Connecticut.
  • Pokeatery, a two-location San Francisco-based build-your-own poke restaurant signed its first franchising deal. Northern California will soon see three new locations.
  • Big Whiskey's American Restaurant & Bar will debut its first franchise location in Las Vegas early next year, followed by a location in Henderson and continuing throughout Clark County. Currently, Big Whiskey has five company-owned locations in Missouri and two franchised restaurants in Bentonville, Arkansas and Kansas City.
  • Slapfish, a fast-casual seafood chain will open two franchise locations in Albuquerque, New Mexico, with the first location currently under construction at the Holly Center with a target opening date of September. Slapfish has eight unites open and more than 100 in development both domestically and internationally.
  • Yogurtland has signed a deal with Charlie Yang and Allan Yang to develop eight locations in Dallas beginning in late 2017 throughout 2018. The Yangs currently have seven Yogurtland stores in Texas, California and Arizona.
  • Arooga's Grille House and Sports Bar made its New Jersey debut with the first of at least four locations opening in Union and Somerset counties. The first location for franchisee Toson Food and Beverage is in North Plain. Arooga's, a full-service casual restaurant and sports bar, has 10 corporate locations in Central Pennsylvania and four open franchise restaurants, with other in development in New York, Florida and Massachusetts.
  • Husband-and-wife duo Jonathan and Grace Darko signed on with Dickey's Barbecue Pit to open two locations in the fast-casual chain's hometown area of Dallas, Texas. The first restaurant is scheduled to open in Grapevine in January 2018, with a Frisco location to follow.

We continue to hear of tight margins and softening sales in the soft casual sector however the announcement of all these locations shows the appetite to develop new franchise restaurant stores and expand among existing concepts is still thriving.  Want to see our franchise restaurants for sale?  Visit the link below. 

 

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Topics: buying a restaurant, selling a restaurant

Report Shows Industry Sales Improving Slightly -- Restaurant Brokers Weigh In

Posted by Robin Gagnon on Jul 21, 2017 12:41:11 PM

Recent headlines about the restaurant industry, in particular the fast casual segment, have not been pretty.  In all, national results have unfortunately, been in a slump for the past six quarters.  June finally saw a turnaround according to the latest report from TDn2K's Restaurant Industry Snapshot.  

The Restaurant Industry Snapshot report show that  June's sales and traffic growth were the best monthly performance since January, and the second quarter of 2017 posted the best results since the second quarter of 2016.  What's causing the change?  For one thing, we're beginning to anniversary a prior year bad performance.  That means we're posting better numbers against a weak 2016.  In the restaurant broker’s opinion, we’re also seeing operators confront lagging sales and lower traffic counts and work to improve both. 

Crowd final.jpgOwners and operators are working hard to both improve traffic and raise sales by focusing on getting outside the four walls of the restaurant.  Many more stores are opting for multiple delivery options. They aren’t delivering their own food any longer and they now use multiple services to get more meals out the door.  Their opinion is that if the business won't come to them, they will make sure the food can get to the homes.  The restaurant brokers are also seeing a stronger push for catering, another way to get sales ringing on the POS system.  

We are also seeing a large increase in the use of promotional efforts ranging from charitable tie-ins, social media contests, limited time offers, couponing and more.  Is it working?  When traffic grows, we'll say for sure this is working.  According to the latest report, traffic declined by 3.1 percent in the second quarter, a 0.6 percent improvement from the first quarter. Overall, same-store sales fell 1 percent in June and in Q2 2017, compared to a first-quarter same-store sales drop of 1.6 percent. 

The fact that average guest checks grew 2.2 percent increase over last year also signals an attention to training and detail in house.  We are not seeing wholesale price increases so up selling the menu and putting higher prices on specials is paying off as guest checks creep up.  According to the report, check averages have been growing slowly since 2015, when average checks rose by 2.8 percent.

Overall, in keeping with many of the articles we’ve been reading, fast casual was the weakest-performing segment in the second quarter.  There is definitely an overpopulation of this style dining and we see even more thinning of concepts and chains still shedding units over the next 24 – 36 months.

On an interesting note, fine dining and upscale casual were the two segments with positive sales in the second quarter, and have been the best performing segments this year.  Does that mean the customer is ready to go back to full service?  It may only signify they are having fast casual delivered through one of the concepts like UberEats or Zifty and when they choose to dine out, they want a full service experience.

Overall, the quality of the experience at the store level will commit the customer to the concept and keep them coming back.  There is significant competition for the food dollar but the consumer share of dollar eaten out of the house has been rising for years and that trend shows no sign of slowing down.  Operators may need to be more creative in order to keep market share in a crowded field.

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Topics: buying a restaurant, selling a restaurant

Do Pro Athlete's Make Good Restaurant Owners?

Posted by Robin Gagnon on Jul 17, 2017 12:12:58 PM

It seems you can’t read an issue of Franchise Times without learning of an athlete who’s invested in the franchise restaurant industry.  The restaurant brokers have interviewed and spoken with many former national level athletes on the way to restaurant ownership.  Here’s what we learned about the parallels and pitfalls of entering the restaurant business as you head out of the professional sports arena.

What are the advantages of playing professional ball and then coming into the industry? How about money?  Professional athletes have an advantage because they bring a lot of money to the table.  What else do they bring? Let's look at the skill set from someone who’s played competitive ball.  First, they have resilience and drive.  You don’t make it to the big leagues without a refusal to fail.  How many restaurant owners will blame the economy, blame the government, blame minimum wage, blame everything but themselves instead of buckling in and having that drive and refusal to fail. 

Here’s another skill kept sharp by those in the major leagues. The ability to learn and adapt.  That’s a skill everyone needs no matter what part of your life you are in professionally or personally.  That’s especially true for restaurant owners who five years ago had a busboy taking deliveries and no social media accounts versus today’s world where you’re fighting for market share with delivery companies and your stock rises or falls with your Yelp ratings. Pro final.jpg

Another skill needed by those leaving the professional league to become restaurant owners is the ability to reinvent themselves.   The restaurant business is fluid and changing.  There are those that peg the NFL as the “Not for Long” league.  Athletes know their body is only going to last for a short period of time.  They are looking for that next investment and know they may have to reinvent themselves within 24 to 36 months.

Another reason a professional athlete’s skill’s transfer to the franchise side of the restaurant business is because they know how to run the plays.  There are plenty of parallels to the franchise restaurant industry where someone else has already put a game plan together.  They learn how to execute it at the very highest level. They practice it, they commit to it and then they do it over and over again.

And oftentimes people will feel a little bit constricted by franchise but on the other hand that kind of operational side of things can be your safety net. And the reality is some folks are just not ready to go it alone. For a professional athlete used to executing against a playbook, a restaurant franchise may be just the thing.  Buying into a franchise gives you the safety net the process.  You get great training, training, the rule book and playbook for every single element of the operation.

For many athletes, they know their name will fade away at some point. We had one athlete tell us, "You can't rely on the roar of the crowd.”  And That's true whether you operate one restaurant, 15 franchises, or many more.

Do professional athletes make good restaurant owners?  They absolutely can if they have the skills we just outlined.

Are you a professional athlete looking for franchise restaurants to buy?  Check out our inventory at this link online. 

 

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Topics: buying a restaurant, selling a restaurant

Certified Restaurant Brokers Steve and Cyndi Weinbaum On the Radio

Posted by Robin Gagnon on Jul 13, 2017 11:19:23 AM

What happens when a radio show is seeking experts on the culinary scene in Atlanta?  They reach out to the restaurant brokers! Steve and Cyndi Weinbaum of We Sell Restaurants were recent guests of Business RadioX along with Seth Gragg of Thrasher Coffee Company and Paul McKeon, CEO of Team Building with Taste, a hospitality company he co-founded in 2012.

The players assembled on the air on June 29 and shared their insight and expertise in the culinary world.  Each of the guests, including husband and wife Restaurant Broker Team - Steve and Cyndi Weinbaum, along with McKeon and Gregg offered their take on the current business climate and their opinion on future trends.  Will the pace of fast casual continue to dominate the industry or is there a return to full service?  Will space (currently at a premium in Atlanta) ever be available for the best locations (no!)? 

The full radio interview can be downloaded live at this link.  

The group, pictured below included Paul McKeon, the CEO of Team Building with Taste, a hospitality company he co-founded in 2012. McKeon and his team have merged their love of food with their business experience building and running high performance sales and marketing teams. With custom team building kitchens in Atlanta and Dallas, Team Building with Taste has become the preeminent culinary team building program in the U.S. To learn more about Team Building with Taste, you can visit their website. You can also follow them on LinkedIn, Twitter and Facebook.

Seth Greg parlayed his love of coffee into his role as VP of Business Development with Thrasher Coffee Company where he uses an extensive background in sales and operational management. Seth has been instrumental in the growth of Thrasher Coffee Company.  The firm specializes in roasting responsibly-harvested beans and supplying premium, fresh, small-batch coffee.  Their discerning customers are seeking the experience at an affordable price and the firm says they, "offer one-of-a-kind roasts backed by an unparalleled commitment to quality and service."

Steve and Cyndi Weinbaum are a husband and wife team who put customer committment first in representing buyers and sellers for restaurants in the We Sell Restaurants database. 

 

CulinaryAtlanta2017.06.16-768x432.jpgSteve is a licensed real estate salesperson and Certified Business Broker. He has over 25 years of experience working with retail, dining, and financial industry leaders with a focus on Marketing, Business Analysis, and Relationship Management. The importance of establishing open and honest rapport with all his clients is, and will continue to be, paramount.

Steve has the ability to quickly and accurately review and evaluate financial data. This skill enables him to provide sound valuation feedback and business guidance. He has years of experience negotiating complex business to business contracts. Steve worked with most of the major Casual Dining and Quick Serve Franchise brands to help grow sales and customer engagement.

As a Certified Restaurant Broker, Steve is closing an average of two businesses per month and is skilled in complex lease negotiations.

Cyndi is a licensed Real Estate Agent who has been representing Buyers and Sellers for over a decade. And while her experience has been primarily in the residential market, both resells and new construction, her ability to negotiate complex contracts and perform valuation analysis also serves the commercial real estate and business community.

She is a certified negotiation specialist and has attended many workshops and seminars on sales and marketing and is a lifetime member of the Million Dollar Club. She has also received instruction and testing leading to designation as a Certified Restaurant Broker.

Cyndi sharpened her negotiating and business analysis skills as a buyer for Macy’s where she collaborated on multifaceted deals in order to maximize return and further developing her ability to quickly and accurately review financial data to evaluate value and drive sales.

As a Restaurant Broker, Cyndi is now working with restaurant owners to accurately value, market and sell their restaurants for maximum value. She is also helping buyers identify the right business opportunity based on their financial goals and objectives. You can follow them both on LinkedIn, Twitter and Facebook.

Click to download the full 50 minute video at this link to hear the entire interview. 

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Topics: buying a restaurant, selling a restaurant

Top 10 Restaurants for Sale in June 2017 by the Restaurant Brokers

Posted by Robin Gagnon on Jul 10, 2017 4:10:58 PM


Summer is heating up across the country.  At We Sell Restaurants we have seen some red hot listings that are sizzling with our buyerswho are clicking and calling to learn more.  These HOT restaurant for sale opportunities make the Restaurant Broker's Top 10 most active listings for the month.  

Number one on the list is a low price restaurant for sale opportunity in Roswell, Georgia.  Fully equipped, this one has low rent and can stay the same or convert to virtually any concept.  Full chef's kitchen and long term lease opportunity at rock bottom pricing.  This is a great opportunity for any restaurant entrepreneur

Listing ID:5486 Restaurant Broker Dominique Maddox    
Restaurant for Sale in Roswell with low rent. Can Convert to Any Concept
Lease: Expires October 31, 2018 + 3 year option
Monthly Rent: $2800
Inside Sq. Ft. 1800
Outside Sq. Ft.
Price:$59,995
City:Roswell

Dominique Maddox
(404) 993-4448

Austin Texas has the greatest velocity of virtually any restaurant for sale listings with high levels of interest and some of the shortest days on market efore selling.  This low price bar for sale opportunity priced at under $35,000 got buyers calling, clicking and inquirying.  This Unique concept in Austin, Texas has seen lots of action in the short time it has been on the market. Austin is the perfect place to own a quint market and cafe combo.

Listing ID:5469 Restaurant Broker Dave Duce    
Bar for Sale in Austin Serving Beer & Wine - Expand to Craft Beer & More
Lease: expires Nov 2020 + 5 yr option
Monthly Rent: $1850
Inside Sq. Ft. 737
Outside Sq. Ft. 60
Price:$35,000
City:Austin

Dave Duce
(512) 773-5272

The Austin market is on fire in the hot summer days as they headline the Top 10 list.  They had three out of the top four slots in Restuarant Brokers Top 10 list this month. On the market for less than 30 days, this one has high cash flow for an owner operator and low rent.  That make sthis sub shopw for sale in Austin Texas a winning opportunity and it's priced to move.  

Listing ID:5538 Restaurant Broker Dave Duce    
Sub Shop for Sale - Renowned Local Austin Location
Lease: negotiable
Monthly Rent: $2458
Inside Sq. Ft. 1000
Outside Sq. Ft.
Price:$125,000
City:Austin

Dave Duce
(512) 773-5272

Continuing with the red hot Austin Texas market, this Bistro restaurant for sale with six figure earnings was also red hot for the month.  The price was recently reduced and the restaurant brokers are expecting offers any day!  

Listing ID:4988 Restaurant Broker Dave Duce    
Established Bistro restaurant for sale in Austin - $115,000 cash flow in 2015!
Lease: expires July 2018 + 5 yr option
Monthly Rent: $4885
Inside Sq. Ft. 1824
Outside Sq. Ft. 800
Price:$199,999
City:Austin

Dave Duce
(512) 773-5272

Florida sure is HOT in the month of June, but that is not stopping buyers from want to know more about this bar for sale in Fort Lauderdale.  Currently operated as a tap room that features live music and a small menu, but can be easily converted to any concept. Priced to move, the plentiful of buyers are looking to move it off the market.

Listing ID:5530 Restaurant Broker Robert Morrison    
Bar for Sale in Fort Lauderdale Priced to Move! Features Live Music
Lease: One Year Remaining + Two 5 yr options
Monthly Rent: $2703
Inside Sq. Ft. 2000
Outside Sq. Ft.
Price:$75,900
City:Fort Lauderdale

Robert Morrison
(917) 499-5137

A second sub shop for slae in Austin also brought lots of buyers to the table.  This location has been open in the Austin Texas market for over 23 years.  An owner that operates this location every day will take home around $65,000 and it's priced to move quickly.  With limited hours, this sub shop for sale location, like many other Austin locations are moving quickly.

Listing ID:5540 Restaurant Broker Dave Duce    
Sub Shop for Sale in Austin Established over Two Decades
Lease: negotiable
Monthly Rent: $1925
Inside Sq. Ft. 1100
Outside Sq. Ft.
Price:$95,000
City:Austin

Dave Duce
(512) 773-5272

Location, Location, Location! That is what everyone is looking at in this restaurant for sale. Located in Smyrna, Georgia near the New Braves Stadium this location comes with plenty of parking for patrons. Keep the current concept or make it yours!  Buyers are clicking and calling the restaurant broker to find out more about what the can do to scoop up this location.

Listing ID:5472 Restaurant Broker Eric Gagnon    
Home Run Restaurant for Sale Nearby New Braves Stadium
Lease: 36 Month till Nov 2018
Monthly Rent: $5687.18
Inside Sq. Ft. 2924
Outside Sq. Ft.
Price:$125,000
City:Smyrna

Eric Gagnon
(404) 800-6704

Franchise opportunities for sale in the Atlanta Metro market always drive traffic  to our website and this location offered by Restaurant Broker Cyndi Weinbaum is no excepction.  Open and opertating, this business opportunity is turnkey.  Don't buy a franchise brand and start from scratch when you can buy a unit already up and going.   This franchise for sale is qualified for an E2 visa and ready for a new owner.  

Listing ID:5535 Restaurant Broker Cyndi Weinbaum    
Restaurant Franchise Opportunity in Metro Atlanta -- Established -Profitable
Lease: 3 Years, with option to renew
Monthly Rent: $$3015 including CAMS
Inside Sq. Ft. 1500
Outside Sq. Ft.
Price:$159,900


Cyndi Weinbaum
(770) 851-5194

Buyers took advatange of their slice of the pie by already putting this Austin, Texas listings into contract! On the market for less than 60 days and soon it will be heading to the closing table. The common theme this month is that Austin restaurant for sale opportunities are burining it up in the hot summer heat!  

Listing ID:5236 Restaurant Broker Dave Duce    
Turn-Key Pizza Business for Sale in Austin Texas Market - Great Rent!
Lease: expires March 2018 + 5 yr option
Monthly Rent: $3000
Inside Sq. Ft. 1440
Outside Sq. Ft.
Price:$43,000
City:Hutto

Dave Duce
(512) 773-5272

Bar are a way for some to cool down on those HOT summer days. Add some profit and a great location and buyers are pouring in to find out more about this Sport Bar in Georgia earning over $200,000. Get into this profiatble location before the fall bar season really picks up.

Listing ID:5445 Restaurant Broker Steve Weinbaum    
Sports Bar for Sale - Highly Profitable Location has been Open 15 Years!
Lease: 4 years + 5 year option remain
Monthly Rent: $70000
Inside Sq. Ft. 7000
Outside Sq. Ft. 1600
Price:$499,000


Steve Weinbaum
(770) 714-4552

The summer will keep heating up and buyers are flocking in to see these Top 10 restaurant for sale opportunities.  The Hottest markets are Texas and Georgia.  While the temperatures are still going up, the market is too. 

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Topics: buying a restaurant, selling a restaurant

Time & Money - The Two Ways Attorneys Kill Deals to Buy Restaurants

Posted by Robin Gagnon on Jul 6, 2017 10:00:00 AM

kill deals.jpgA recent transaction for buying a restaurant reminded me of the two ways that we see deals most frequently fall apart.  Here's a hint -- it's just like all the TV shows where  the criminals stop talking once they "lawyer up".  The restaurant brokers see deals to buy a restaurant hit the same impasse when attorneys enter into the equation.

Time

The first killer technique of attorneys is time.  The time between offer and acceptance is the most critical part of the negotiation.  Attorneys that draw out deals while they draft the perfect contract blow them up

In one recent transaction, a standard purchase contract provided by We Sell Restaurants (which has been subject to lots of scrutiny in the hundreds of deals where it's been used) went into review with a buyer and seller who both had an attorney.  Two months later, the only progress on the deal was that the two attorneys billed their clients over $8000 and nothing was inked.

Here's how the transaction began. 

A very experienced restaurant operator started talking with the restaurant brokers about buying a franchise restaurant in Chicago. Paperwork was signed and he provided us with bank statements showing he had sufficient liquid assets to both qualify for the franchise approval and meet the equity requirement for SBA lending.

For the next six days the restaurant brokers set up meetings between the clients, forwarded financial materials and negotiated the deal terms.  After the first meeting, buyer and seller were happy.  Both parties were in agreement on the price, the closing date and most deal terms.  This restaurant broker prepared the purchase contract and that's when things went sideways. 

The seller decided his attorney needed to review the contract.  This is a very common request and should have been relatively painless, except it wasn't.  The seller's attorney demanded proof of funds and a resume on the buyer.  We sent the materials to the attorney with a caveat that the buyer's bank account information was for his eyes only and not to be forwarded.

At this point, the wheels came off as the attorney began having an email meltdown stating he was not willing to "hide things" from his client. We courteously advised him he wasn't asked to "hide" anything but simply to treat the information securely and not forward via a free email service or otherwise expose the client's private financial data to disclosure.  

Money

The second way that lawyers kill deals is with money and the charges they hit clients for while deals spin sideways. 

Returning to my earlier story, I should have realized this deal was going to remain off the rails based on the initial reaction of the attorney but I'm an optimist -- what can I say?  I worked to move this forward. The attorney for the seller then began to advise his client on a number of matters directly related to the transaction (such as calling the franchise and calling the landlord). Are these typicaly attorney functions?  Absolutely not. What's the cost of that effort?  Roughly $250 - $400 an hour to blow up a deal.  The restaurant brokers would normally do this as part of their process. 

Ultimately, as expected, this deal blew up.  The unfortunate part of the story is that both the buyer and seller were motivated to make this happen but their attorneys, in their efforts to protect them (or if I'm being cynical - charge them) led to total deal killing destruction.  The fee for both parties topped out at over $8000 with no deal ever inked.   The only money made in the transaction was by the law firms. 

Are the restaurant brokers telling you not to use an attorney?  Absolutely not.  Hire an attorney but here are some tips to be sure they don't waste both your time and your money. 

Tips for Using an Attorney

  1. Agree on deal terms before engaging with an attorney.  They aren't negotiators.  They capture deals, they don't make deals. 
  2. Use a business attorney who commmonly closes business transactions.  There are different skills  used by Uncle Louie the lawyer who wrote your will and a business attorney who closes deals for a living.
  3. Don't "over-lawyer."  For most deals under seven figures you do not need the largest (most expensive) law firm in town.  This is basic business law.  They should specialize in transactions however.  You don't want them learning on your dime.  
  4. Where possible, start with a purchase contract from your broker so the lawyer is not building from scratch. 
  5. Don't expand the attorney's reach.  They should not be (in most cases), working with your franchise, your landlord and other third parties.  Your restaurant broker should be.  The only exception to this is a landlord that is dragging his feet on an assignment. 

We are not saying it's not a good idea to use an attorney.  We just recommend you manage them so they don't waste both your time and your money. 

 

Topics: buying a restaurant, selling a restaurant