Advice for Buying a Restaurant and Selling a Restaurant

Robin Gagnon

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We Sell Restaurants Brokers Named to Georgia Association of Business Brokers Million Dollar Club

Posted by Robin Gagnon on Dec 12, 2017 10:00:00 AM

Dominique Award Pic.jpgEach year the Georgia Association of Business Brokers (GABB) highlights members who have sold at least $1 million in listings during the year.  This year, Dominique Maddox joined We Sell Restaurants President, Eric Gagnon, in this prestigious group.  

Only eighteen members of the Georgia Association of Business Brokers (GABB) were named to the 2017 Million Dollar Clubs for helping to broker the sale of small-, medium-sized and large businesses worth more than $90 million in 2017.

GABB is a professional membership organization committed to professionalism in the business brokerage industry. GABB members relentlessly pursue professional development so they can render superior, ethical services for all customers and clients.

Dominique Maddox made his first appearance in the Million Dollar Club while Eric Gagnon made a repeat appearance in the multi-million dollar club.  

Dominique graduated from Morehouse College in 2004 with a BA in Business Management. He went into the residential real estate field and after two years he was convinced he was destined for another industry.  “I have always loved the restaurant industry, and if I hadn't received a football scholarship to Morehouse College, my backup plan was to attend culinary arts school and become a chef.”

In 2010, Dominique was able to merge his two passions and became a Certified Restaurant Broker with We Sell Restaurants.  The rest is history.  In Dominique's word, "I’m very lucky to have joined a firm that gave me a chance at age 29 in an industry where most brokers are over 50.”

Dominique describes his approach to work to his role simply saying, "Every day I work like I have nothing in contract.” He added, “I took my restaurant brokerage business very seriously this year and reviewed my goals and vision board regularly to stay on course.”  When Dominique isn’t busy as a rock star restaurant broker, he enjoys fitness, traveling and sightseeing, and most of all spending time with his wife and daughter. In January 2018 his daughter, Amaya will be launching her very own shirt company, Young Minds Brand, with the entrepreneurial guidance of her father. The 11-year-old will use the proceeds from her venture to actively contribute to her 529 plan for college, and eventually law school! Talk about a family of achievers!

Eric Gagnon was also named to the 2017 list of top producers as a member of the group performing Multi-Million dollar transactions.  The co-founder and President of We Sell Restaurants, he is the past President of the Georgia Association of Business Brokers and has received the GABB Lifetime Million Dollar Club Award as well as the prestigious GABB Phoenix award for a decade of achieving million dollar status.  Business Brokerage Press first designated Mr. Gagnon as an Industry Expert over a decade ago.  In addition to GABB, Eric is a member of the International Franchise Association (IFA), the International Business Brokers Association (IBBA) and the Southeast Franchise Forum (SEFF) where he serves on the Board of Directors.  He is also a member of the Business Brokers of Florida (BBF).  Eric is licensed as a broker in Georgia, South Carolina and Florida. 

For listings from these top producing brokers in the GABB, take a look online at the nation's largest website for restaurants for sale at the link below. 

Restaurants for Sale

 

Topics: restaurant broker, buying a restaurant, selling a restaurant

Tips on Buying a Bar for Sale – Evaluating Cash Flow

Posted by Robin Gagnon on Dec 8, 2017 9:32:46 AM

When the deal seems too good to be true, it probably is. A Restaurant Broker shares the secrets of paying the right price for earnings when you find a bar for sale.

An age-old struggle with how to set pricing on a “cash” business like a bar for sale is put to rest in this article. Expert restaurant brokers know that the only real way to value a bar for sale opportunity is based on earnings. Earnings are based on a profit and loss statement on the business and additions to earnings known as add backs to calculate Seller’s Discretionary Earnings. This method, known as the Income Valuation Approach doesn’t work when bar for sale listings states they have “cash earnings” they want to use in the valuation.Tips on buying a Bar for Sale.png

Cash earnings are generally not provable. They results when the seller avoids certain tax requirements and doesn’t report all of his sales and thus, his earnings. Some restaurant brokers promote these listings online and say things like “cash to be proven by seller.” Other restaurant brokers don’t take these listings or simply offer them as assets since they can’t be verified. Cash earnings are not the same as items “added back” to earnings to arrive at the owner benefit on a bar for sale. Anything that is customarily added back can be substantiated with documents during a period of review on the books and records. Here are some of the issues presented by “cash” businesses.

The first is valuation. A bar for sale advertised with earnings of $100,000 offers no way for a restaurant buyer to confirm that number. Since pricing is based on earnings, the restaurant broker that takes this number at face value will be overpricing the business. The only way the value would be correct is if the earnings were authenticated and the buyer kept the business the same when he took over the bar for sale. The other problem with the valuation is that seller is being asked to be paid twice for the same income. He’s already received a huge benefit since he’s avoided all the reasonable and customary taxes (state income tax, federal income tax and more). Now he wants to sell this bar at a premium.

Some buyers are willing to take the risk and decide they will just run on the up and up once they take over the bar for sale. There’s a problem with this approach. If you convert the cash earnings onto the books, you’re looking at an immediate hit to the earnings. The federal, state, and sales tax implications alone could drive the operation into a negative earning situation.

The larger problem for most however is one of transparency by the seller of the bar for sale. He has operated on a less than candid basis with his franchise (if he has one), the State Alcohol licensing authority, the state sales tax board and the Internal Revenue Service. It’s a bit of stretch to now believe he or she will be forthright with you at the point you are buying this bar. Outside of coming into the business as an employee or minority partner for a series of months, it’s impossible to establish the “real” earnings.

If you are a buyer that prefers a less risk adverse approach, than a bar for sale in with verifiable earnings is the answer. The pricing may not seem as good a “deal” as something advertised at a good price with “cash” earnings but the old adage that you get what you pay for holds true in this scenario. Pricing and earnings are not a game in the valuation of a restaurant or bar for sale. They are a simple math problem and they do have a right and wrong answer – whether you are buying a franchise restaurant or buying a bar or club.

Robin Gagnon is Co-Founder of We Sell Restaurants and www.wesellrestaurants.com. She holds an MBA in finance and frequently writes on the topics of restaurant sales, restaurant valuation, and financial topics surround the buying and selling or restaurants, clubs or bars.

Topics: buying a restaurant

This diner for sale in Royal Palm Beach Florida is Now Sold!

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

Royal Palm Beach’s Wild West Diner is no longer a diner for sale in Florida. The business was on the market for just over six months when it sold with the efforst of Certified Restaurant Broker Ken Eisenband.

The new owner, Larry Marble, found this diner for sale online and decided he would not miss out on the opportunity offered by the Restaurant Brokers.  Marble, aWild West Diner.jpg military veteran, is an existing operator.  He owns Pirate’s Well in Lake Park, Florida, and with the massive success he has had at that location, he decided to buy the Wild West diner for sale to convert into a second Pirate’s Well establishment. The sellers, Wild West Diner, LLC began the business in 2014, and due to health issues decided to list the diner for sale with the Restaurant Brokers.

What used to be a diner for sale has now been transformed into a bar and restaurant with menu items including lobster mac & cheese, wings, tasty burgers, pizza, tacos, steaks, chicken and seafood. The Wild West Diner had patrons that loved their breakfast, so Marble didn’t change that when he completed the transformation – breakfast is served daily! Royal Palm Beach residents have nothing but great things to say about the transformation, here’s just a small sampling of the five-star rave reviews the new concept has already received:

  • “Food was great. Staff was right on top of things. Friendly and professional. Larry greeted his customers with a smile and made sure everything went smooth.”
  • “This place is one of the best establishments in royal palm beach. I highly recommend the crack wrap.”
  • “The food is so good at Pirates Well that we happily drive the 18 miles for breakfast. The staff is very efficient and friendly, there are plenty of TVs to watch your favorite sporting events, and lots of parking.”
  • “Food is awesome and the staff is my favorite of any local place!! They make you feel right at home!”

Restaurant Broker Ken Eisenband had this to say of the transaction: “The Wild West Diner for sale to Larry Marble went very smoothly due to both partie's professionalism. The seller kept accurate books and records, so requested due diligence material was easily presented. The buyer was well prepared and organized in his dealings with the landlord. It was a pleasure to work with everyone involved with this transaction”

Certified Restaurant Broker Ken Eisenband holds a brokers license in the state of Florida. He holds a BBA in Business Management from Morehouse College. Eisenband is a Certified Negotiation Expert and was the proud recipient the Dealmaker Award from the Business Brokers of Florida Association for two consecutive years. Ken currently is a multi-unit franchise partner with We Sell Restaurants in Broward County and Palm Beach County, Florida.

Are you in the market for a diner for sale like this? Click on the link to be taken to our diner for sale listings across the country, and check out all of the restaurants for sale online at the We Sell Restaurants website. 

If you’re in the market to sell your restaurant, give the restaurant brokers a call at (888) 814-8226, or click here for a free valuation of your restaurant.

Restaurants for Sale

Topics: buying a restaurant, selling a restaurant

The Restaurant Brokers Share the Top 10 Listings in November

Posted by Robin Gagnon on Dec 4, 2017 10:00:00 AM

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Topics: buying a restaurant, selling a restaurant

The Restaurant Brokers Share Multi-Unit Franchises for Sale Listings

Posted by Robin Gagnon on Dec 1, 2017 10:00:00 AM

Are you a super entrepreneur looking to become the owner of multi-unit franchises for sale? The Restaurant Brokers have the listings for franchises for sale that you are looking for! What about those who aren’t sure that they are ready to own multiple franchises for sale, but want to dig into the world of becoming a franchisee? No worries – most of our multi-unit franchises for sale also have the option to buy the stores on an individual basis.

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First up on our roster of franchises for sale is an extremely popular group of three custom made-to-order sandwich and sub stores in Forsyth and Guilford Counties. What the Restaurant Brokers love about these franchises for sale is that all three locations are no more than 45 minutes from each other – making it easy to be an active owner/operator at each location without having to sacrifice time spent traveling from store to store.

The two Forsyth County locations of these nationally recognized franchises for sale are netting a combined sales of over $907,000 annually. The current owner is taking home nearly $121,000. It gets better! Of these two franchises for sale, this listing includes rights for the new owner to develop another location within the same market! This has a value of $25,000 for the development rights that is included in the purchase price of this listing. Scoop up this listing as well as the other that can be found here, and that gives you the potential to own not just two, but three of these franchises for sale upon development of the third!

Next on our list is this pair of Lenny’s Grill & Subs franchises for sale in Mississippi. The combined sales at these two locations is over $1 million annually! The current owner is bringing home an income of almost $105,000. This Lenny’s listing can improve its sales figures even more with the addition of an owner operator, as the current owner is absentee. This second Lenny’s location is doing incredible, and has an affordable rent rate of just $4,000 per month.

The final duo in our franchises for sale listings are these two Firehouse Subs locations in Kentucky. Another group of money-making franchises for sale, these two locations are reaching combined sales levels of over $900,000. The current owner is bringing home over $86,000! Leases for these locations are negotiable with the landlord and they are both located in excellent markets where the population is abundant.

These are just a few of our franchises for sale listings that include multiple units. No matter how many locations you wish to own, the Restaurant Brokers have more franchises for sale than anyone else, and we are ready to find the perfect one for you! Visit our franchises for sale listings on our website, or call us today at 404-800-6700.

Topics: buying a restaurant, selling a restaurant

We Sell Restaurants and the Restaurant Brokers Invite you to Join Our Efforts on #GivingTuesday

Posted by Robin Gagnon on Nov 28, 2017 8:17:19 AM

The Restaurant Brokers at We Sell Restaurants want you to aid our efforts on this #GivingTuesday.  You’ve made it through Black Friday, Small Business Saturday and Cyber Monday, and hopefully gotten some great gifts for your loved ones for the upcoming holidays (and maybe even a thing or two for yourself!) Before you put your wallet away, don’t forget to participate in today’s #GivingTuesday. For those of you who aren’t familiar with this moniker, #GivingTuesday is a global giving movement built by individuals, families, organizations, businesses and communities in all 50 states around the world. Everyone is encouraged to donate their time or money to a charity of their choice to help make a difference.

share.jpgThe Restaurant Brokers at We Sell Restaurants established our We Sell Restaurants Charitable Foundation in order to give back to the charities that hold a special place in our hearts. 

In honor of  #GivingTuesday, we encourage you to head over to www.franchisegiving.org and make a donation of your own. We Sell Restaurants is matching dollars today for the work this group does for veterans, underserved communities and the next generation of leaders in franchising.  Think of the difference we can make together! In addition to this contribution, take a look at what else we have donated ion this day as we collectively look at ways to improve our communities.  

Adopt a Golden Atlanta – Not only have we contributed $2,500 to this Golden Retriever rescue organization, we also rescued our office dog, Major from here as well! Adopt a Golden Atlanta focuses on finding loving forever homes for homeless Golden Retrievers in order to keep them from living a lonely life on the streets, or ending up in an already overcrowded animal shelter. Not only does this organization find homes for these notoriously excellent family dogs, they also make sure each and every dog that comes through their program receives a spay/neuter operation, medical care, and even behavior training! If you’d like to make a donation (or adopt from!) this organization, visit their website www.adoptagoldenatlanta.com.

Atlanta Community Food Bank - This past October, the Restaurant Brokers headed to Atlanta to volunteer their time at the Atlanta Community Food Bank, in addition to a donation of $1,500. The Atlanta Community Food Bank is a godsend to many Atlanta residents who do not have the means to obtain food on their own. This food bank, like many, does not only provide food for homeless individuals – they also make it possible for childcare providers, shelters and centers for senior citizens to provide meals to those in need. This year alone they will provide more than 60 million meals to over 755,000 individuals throughout the Atlanta metro area as well as northern Georgia. If you’d like to make a monetary donation to the Atlanta Community Food Bank, click here.

The Honor Foundation – The Restaurant Brokers are thankful each and every day for the efforts of our servicemen and servicewomen. As a token of our eternal appreciation for these brave and talented individuals, we have donated $5,000 to The Honor Foundation. The Honor Foundation focuses on providing professional advancement education for Navy Seals and United States Special Operations members during and well beyond their service. Would you like to make a contribution to this foundation? Just click this link and you’ll be taken to their donation page!

While we highlight these gifts on #GivingTuesday, our foundation will be seeking out other great causes and committing more money before the end of this year. 

Are you ready to help?  It’s easy to join the #GivingTuesday movement! A simple online search of your favorite charitable organization will take you to their website, and in turn to a page to make a donation. ANY amount helps as we work together to give back in better, smarter ways to the charities and causes we believe in, and help create a better world.

And don’t forget – giving back doesn’t need to be done monetarily. Donate your time to your local animal shelter walking the shelter dogs, head to your food bank to serve up lunch of dinner to those in need, or set out  to your closest park and spend a few hours cleaning up garbage.  You can be a real force for good in people's lives.  Share your contributions with us in the comments below!

Topics: restaurant brokers, buying a restaurant, selling a restaurant

Tips on Leasing a Restaurant – What Landlords Expect from a Tenant

Posted by Robin Gagnon on Nov 27, 2017 10:00:00 AM

You can get respect from the landlord when leasing a restaurant as long as you take the time to assemble a package with the help of an expert restaurant broker.

Leasing a restaurant can be a daunting task for the inexperienced restaurant owner. Here’s everything you need to know to present your offer in a way to get serious consideration from landlords who see multiple submissions for the best space. Start and end your negotiations with the landlord on the best foot by treating this as a serious business deal.

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Lending covenants or other restrictions on landlords often dictate the mandatory materials he needs to consider any new tenant leasing a restaurant space. This can be for a new lease or even the transfer of an existing one. By understanding the requirements early in the game and presenting a well organized and complete package, your application moves to the top of the list, important in the current competitive market for leasing a restaurant. Once the landlord has a package, he will meet with the proposed tenant but generally not before he has a package. Why? The landlord wants to understand who he or she is dealing with and their credit quality before they meet with a would-be tenant and enter into negotiations.

How can using a qualified restaurant broker assist you in leasing a restaurant? There are multiple ways. First, the best spaces move quickly and restaurant brokers with established relationships with landlords often get the first look at spaces that will be available. Secondly, using a restaurant broker that has established a rapport with the landlord increases your chance of success when leasing a restaurant. Since the landlord isn’t meeting directly with you as the tenant, he’s relying on the expertise of the restaurant broker to communicate information about your concept and you personally. That’s important when the developer is weighing multiple offers or considering tenants that do not have as strong a credit position. Leasing a restaurant for locations in demand are typically managed by firms who are very experienced in conducting background reviews and credit quality reviews on would-be tenants. Lastly, a qualified restaurant broker is going to prepare your package for the landlord and help you put forth as the best candidate.

You can indicate a lack of sophistication or inexperience on the part of your broker if your package is incomplete or missing elements. For big landlords, this can be a deal breaker when there are competing packages though less established or single unit operators are more forgiving. Anyone leasing a restaurant should get a full list of requirements from the broker.

Be prepared to produce any or all of the following items. The most important item is your financial statement. This should be accurate and dated within the last 30 days. Landlords will want credit checks so be prepared to give them approval to pull your credit. Often they will want two years of federal income tax returns. Most of this is a required need to have; not a nice to have. The landlord is looking for three things: cash on hand to operate, assets sufficient to secure the lease and history of paying bills on time. In addition, they want to understand how you will operate in their restaurant for lease so provide a copy of your menu and outline of your business.

The actual discussions on lease terms begin after the full package is submitted. If you have a powerful package and strong financial results you’ll have more negotiating room in leasing a restaurant and the terms. If there are lots of people vying for the same space and your restaurant brokers submits the best package on your behalf, you’ll win out. Weak credit or insufficient cash positions can be overcome in multiple ways. A strong restaurant broker can offer you suggestions to overcome or secure the landlord’s risk on these elements.

Want more information on leasing a restaurant? Download our free Guide to Leasing a Restaurant available at this link.

 

Topics: buying a restaurant

The Restaurant Brokers Share Bargain Restaurants for Sale in Honor of Black Friday

Posted by Robin Gagnon on Nov 24, 2017 10:00:00 AM

In honor of all of the hot sales going on today for Black Friday, the Restaurant Brokers didn’t want to miss the opportunity to share our deals with those of you searching for a restaurant for sale. What do the Restaurant Brokers consider a hot Black Friday restaurant for sale deal? One of our many asset restaurant for sale listings that are $75,000 or less! Some may say, “I am pretty sure I can lease a restaurant space for far less than $75,000, why should I buy an asset restaurant sale?” The Restaurant Brokers are here to tell you exactly why you should consider an asset restaurant for sale as opposed to leasing a restaurant space.

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First off, many restaurant spaces for lease are just that – space. Sure, some of them have a build out that has been started, but starting tends to be where they were also finished. Many of these leased spaces have little to no kitchen equipment. What’s that mean? Simply, you, the lessee, is responsible for the purchase of the equipment. “Well, I can just buy used restaurant equipment, how bad can that be?” While used kitchen equipment is a great option, keep in mind you will be spending a minimum of $35,000 to $45,000 on just the equipment.

After the equipment is purchased, it needs to be delivered to your location and then installed. You can expect to shell out anywhere from $2,000 to $5,000 for this. Now, you have it all delivered and installed, you’re ready to fire it all up for a test run, and you discover that two thirds of the equipment doesn’t work. Now what? You will either have to pay someone to come in and inspect and fix the equipment (if it’s fixable), or look for different equipment. As you can see, this can be very pricey.

You may say, “The restaurant space for lease I found already has the kitchen equipment and it’s brand new – the previous renter installed the kitchen and ran out of money, I just need to finish the rest.” Just like ANY renovation or build-out, to do this in a restaurant space for lease is no different. You are looking at $90,000 and up for just a 900 square foot space!

An asset restaurant for sale is sounding a whole lot better now, how about it? The Restaurant Brokers have lots of asset restaurant for sale listings, and we are sure that we have the perfect one to suit your needs! Take a look at a few of these deals that are priced right up there with the rest of the Black Friday deals going on all across the country today:

First up on our list is a listing for only $29,000. You may be thinking, “There’s no way I can get anything decent for that price.” Think again. This restaurant for sale is located in Austin, Texas in a developing party of the city. Currently this is operating as a sub shop, but it’s ready for you to bring your own concept. It would be perfect to run a café, small bar, bistro, or carry-out business! The possibilities are endless with this little gem, and rent is only $1,851 per month. Click here to check out this listing!

Next up is a buffet-style restaurant for sale in Blount County, Tennessee that is in a stand-alone building and includes a retail store! Keep this as your own to sell trinkets or homemade goods, or lease it to another tenant! The possibilities are endless in this 5,800 square foot location with a rent set at an unheard of $2,500 per month! You get all of this and a fully equipped kitchen for just $55,000 – wow! What a deal – check it out here!

Our final Black Friday restaurant for sale deal is almost too good to be true – a sandwich shop restaurant for sale in Golden, Colorado for just $50,000! This business is located in a busy strip mall, high school, and residential neighborhoods. The location is an easily manageable 1,050 square feet with seating for 24 guests for just $1,650 per month. Don’t miss out on looking at this restaurant for sale listing here!

With all of these great restaurants for sale from the Restaurant Brokers for less than $75,000, you can get a great business for yourself, and have money left over for all of your upcoming Christmas shopping! Keep an eye on all of our restaurant for sale listings by registering on our website, www.wesellrestaurants.com – we put new listings up each and every day and you never know when you will find a steal!

Topics: buying a restaurant, selling a restaurant

Skip Cooking This Thanksgiving - The Restaurant Brokers Share Restaurant Chains Open for the Holiday!

Posted by Robin Gagnon on Nov 22, 2017 10:00:00 AM

Our friends at Restaurant News did it again!  Here's the list of the restaurant chains open for Thanksgiving this year.  Making a home-cooked meal for Thanksgiving is how some families spend the day but a surprising number of people prefer to skip the preparation, cleanup, and house full of relatives.  Instead, they opt for a chef who works their magic and a server team to handle the legwork!  An added benefit to dining out, you can avoid all those pesky leftovers and seconds that are bound to sabotage your diet plans when a restaurants whisks in a meal and then clears it away in the same sitting. 

The Restaurant Brokers have been on both sides of the fence.  We've been the recipients of a fabulous home cooked meal, we've been the ones cooking the turkey and we've dine out.  What's the best experience?  It depends on your own unique situation.  More and more families are gathering together but opting for dining out.  We can't blame those who want to leave the cooking to specialists.  Especially not after reviewing this list of fantastic chain restaurants who are staying open to make your Thanksgiving meal an unforgettable one!

Relax and enjoy dinner out this Thanksgiving.These chains are open for the holiday!.png

According the research performed by the National Restaurant Association, this year nine percent of American’s will be eating their Thanksgiving dinner at a dining establishment instead of in the comfort of their own or someone else’s home. That’s a three percent increase from 2011.

If you’re one of the millions of American’s who are eating their Thanksgiving dinner out this year, check out the following list of chains who are staying open to roast your bird, bake your ham, and plate up your mashed potatoes and gravy so that you can be thankful you don’t have to lift a finger – except to pick up your fork and knife!.

Applebee’s – Not all Applebee’s restaurants will be open for Thanksgiving, but there will be many in select markets that are. Those that are staying open for the holiday will serve turkey, green beans, and mashed potatoes with gravy. Call your local Applebee’s to find out if they will be participating!

Boston Market – For $12.99 a person you can enjoy turkey breast or half of a chicken along with two side dishes, a roll and a slice of pie! For $34.99 enjoy the same items for three people!

Country Buffet – Country Buffet is where you go to get a meal just like what grandma made, and Thanksgiving dinner is no exception. From 11am-6pm guests can dine on numerous meats from the carving station, potatoes, juicy corn, and a selection of Thanksgiving pies.

Cracker Barrel Old Country Store – head to Cracker Barrel for a turkey dinner complete with a small portion of sugar-cured ham, delicious sweet potato casserole, your choice of a side and beverage for just $12.99 per adult and $7.99 per child.

Denny’s – Head into your favorite Denny’s for carved turkey breast, stuffing and even cranberry sauce.

Houlihan’sWhat an interesting concept this bar and restaurant chain has come up with this year – ‘Drinksgiving!’ After you finish meal with the family, head over to Houlihan’s and indulge in $2 beers, $3 wines, and $5 pitchers of Long Islands!

McCormick & Schmick’s Seafood & Steaks – For an upscale dining experience this Thanksgiving, head to McCormick & Schmick’s Seafood & Steaks for turkey dinner including butternut squash soup, cornbread stuffing, and apple squash casserole. This chain will also be featuring its regular menu all day long for anyone not wishing to have the traditional Thanksgiving turkey!

Romano’s Macaroni Grill – For $24.99 per person you can indulge in a three-course dinner including roast turkey, mashed potatoes, carrots with bacon, apple sausage stuffing and pumpkin pie.

Ruth’s Chris Steak House– Another upscale dining option for Thanksgiving is the famous Ruth’s Chris Steak House. The price is a bit steep, but it is well worth it! For $39.95 per adult and $12.95 per child, guests will enjoy gumbo or a house salad as a starter, and tender turkey with house-made gravy, stuffing, and more!

Ryan’s – If you’re looking for good old fashioned pecan pie this Thanksgiving, you’ll want to get to Ryan’s. Sure, you can get the traditional turkey dinner, but you can also get friend chicken, steak, shrimp, and meatloaf! Southern-inspired side dishes include collard greens, green beans and corn.

Shari’s – Head on into Shari’s for turkey or ham dinner for just $14.99. If you’d rather have something from the daily menu, all entrees are $5 off from 10:00PM Thanksgiving night until 10:00am Black Friday! Shari’s has 94 locations in the United States. For dessert, Shari’s is serving up its award-winning pumpkin pie!

Sizzler’s – From 11am through 10pm on Thanksgiving, guests will be treated to stuffed roasted turkey, potatoes, cranberry sauce and pumpkin pie. The price will vary at each location, so call ahead to the Sizzler’s closest to you for pricing and reservations!

The Dixie Cafe – Head on over to the Dixie Café for a traditional turkey for just $10.99 per person from 11am-5pm.

Waffle House – While they don’t have a special Thanksgiving menu, they will be open serving all of their signature items to the masses!

With all of these delicious options to choose from, we wouldn’t be surprised if some of us have a home-cooked meal for lunch, and head out for a second serving for dinner! Wherever you choose to dine this Thanksgiving, We Sell Restaurants wishes you a happy and healthy holiday with your friends and family. Enjoy!

Topics: buying a restaurant, restaurant brokers

Restaurants for Sale and Their Valuation are Simple Math Problems – Do you have the Right Answers?

Posted by Robin Gagnon on Nov 20, 2017 9:39:41 AM

Researching restaurants for sale can be a challenge. Understanding that this is a math problem with a right and wrong answer can help. If your broker can’t answer these questions about how much to pay when analyzing restaurants for sale, find another one.

There are three methods of establishing valuation of restaurants for sale used in the industry. An expert restaurant broker should be familiar with all three though the Income Valuation Method is the most favorable and trusted method used in the industry.

Restaurant Valuation is a math problem, with a right and wrong answer..png

In today’s robust environment for SBA lending, the Income Valuation Method is the one used to secure financing on a business. If a restaurant has solid profits and a two to three year history, it’s easily financeable in most circumstances, with 25% to 30% down. This is the most acceptable method of valuation for banks, lenders and individuals in assessing how much to pay for a restaurant. In a situation where a restaurant buyer is paying cash, this helps to reduce fear of the transaction as the business has a proven track record.

Restaurants for sale with strong books and records, assessed under the Income Valuation Method has the highest number of potential buyers and hence commands the highest possible price. An expert restaurant broker can go through the Profit and Loss statement along with tax returns to find the Seller’s Discretionary Earnings (SDE) or owner benefit that is customarily accepted by lenders to value the business. This includes net income PLUS reasonable and customary add-backs.

What is not allowable for “add-back” purposes are efficiencies a new owner could potentially achieve that the current operator hasn’t. It should factor in your decision to buy but should not be calculated in the pricing of any restaurants for sale you are considering. The entire purpose of the add backs is to calculate owner benefit and ultimately pricing of the business. If you can identify strategies to be more successful in the future than the current owner, that benefit belongs to you as a buyer, not to the seller in the pricing of the business.

Once the Seller’s Discretionary Earnings is appropriately determined, then it becomes the basis for a “multiple” for appropriately pricing restaurants for sale. Every buyer wants the answer to the question, “What’s the multiple for restaurant pricing?” and the response rarely satisfies anyone. In general, restaurants for sale can be offered and sold somewhere between two and a half and three times earnings. Franchise restaurants trend at the higher end of the multiple, at nearly three times earning for lending at most times. Exceptions come into play when the business has down trending sales year over year. For purposes of this article, we are limiting our discussion to single restaurant units. Multi-unit restaurants for sale, (anything above three, especially franchise) changes the multiple significantly and requires a whole different analysis and pricing model.

“How much should you pay for the restaurants for sale you are evaluating? The answer can be affected by any of the following variables including: strength of books and records, saturation of concepts in the marketplace, seasonality, location, comparable Sales Information or “comps,” franchise or independent offering, geography and competition.

Strong restaurant brokers that know the market and should be able to share exactly where a restaurant is priced based on the multiple and why. Ask some questions of your broker to be certain they fully understand restaurant pricing. If you’re not satisfied with the response, contact a Certified Restaurant Broker who has passed testing and has experience in pricing to assist you in buying a restaurant.

Topics: buying a restaurant