Advice for Buying a Restaurant and Selling a Restaurant

5 Surefire Ways to Keep from Selling Your Restaurant

Posted by Robin Gagnon on Oct 9, 2018 1:28:14 PM

Ignore the Broker’s Advice for Listing Price

The first piece of advice to ignore if you want to keep from selling your restaurant is to ignore the broker’s advice for the listing price.  A Certified Restaurant Broker has the experience, the knowledge, comparative analysis and sales to support the listing price he is providing to you. 

This important reliance on comparable sales and lending approvals tells him what the business will sell or lend for in today’s market.  Join this with years of experience and he or she is most often, setting the correct pricing.

5 Surefire Ways to Keep from Selling Your Restaurant

As the seller, you’re relying on what you “need” or “want” for the business. Buyers are not interested in what you need from the sale or what you want for the business.  They are interested in obtaining a business in line with current market conditions for similar businesses with comparable earnings.

When you tell him or her that even though it should be listed at $225,000, you want to list at $270,000, you’re setting up a scenario that will keep from selling your restaurant.  This is the first rule to put in place if you want to delay a sale and set yourself up for disappointment.

Forget about Operations Once Your Business is Listed

Taking your eye off the ball is never a good idea, especially when selling your restaurant.  Just because it’s listed with a Restaurant Broker doesn’t mean the deal is done.  Typically, you have months of waiting before the closing takes place.  It’s not the time to slack off, in fact, it’s time to up your game.  You will have buyers visiting as secret shoppers and determining if they want to move forward. 

We coach buyers to understand that they are always buying a work in progress and any improvements will lead to a better bottom line for them.  However, if last years’ service record was impeccable and you’re shorting people on night shift to save a few pennies, it will show.  That leads to buyer questions.  Buyer questions lead to negotiated deal terms and ultimately, impacts the value of your business.  Keep the operations at the same level as prior to listing your restaurant for sale to get the best offers.

Forget About Driving Sales; They Don’t Matter that Much, do They?

Another surefire way to torpedo a sale and keep from selling your restaurant is to start posting negative sales comps.  Positive sales are a requirement, not a suggestion.  Above all, stop the bleeding somehow, if you start heading into negative sales territory. 

As restaurant brokers, we work with lenders who want explanations or deny loans because of sales trending.  Strong restaurant brokers can help a seller craft the right message about why the trend is dropping and help save a deal.

A better option is to never put yourself in this box unless you’re not that interested in selling your restaurant. Figure out a way, whether through promotions, advertising, delivery, catering or somehow, to get your sales posted in positive territory until the restaurant is sold.

Stop Paying your Taxes

Here’s another favorite if you want to be certain to stop all the momentum for selling your restaurant.  Begin ignoring the tax man and the payments for payroll or sales tax.  If you think these items are not going to surface before the closing, you are dead wrong.  All attorneys preparing closing documents should be doing a UCC (Uniform Commercial Code) lien searches.  That will usually uncover any unpaid debts and liens.  Since taxing authorities are usually the first to file, these liens will show up. 

Any liens will have to be paid out of the closing or settled in some manner before you can sell your restaurant.  The fact that the liens exist also raises serious doubts in the mind of any buyer.  Can you be trusted if you don’t pay your taxes?  What other bills might surface?  Even if a buyer wouldn’t be liable for any unpaid bills, this tactic introduces doubt.  This breeds distrust which leads to deals falling apart.

Pay your bills and pay your taxes if you are selling your restaurant.  Avoid making payments and you’ve set up a surefire way to drum up to lose a deal on top of wasted penalties and interest.  

Be Less Than Honest, About Anything

There’s really nothing you can tell a restaurant broker that he hasn’t heard before.  What they can’t help with is what they do not know.  If a pipe breaks and you close the restaurant for two weeks while it’s in contract, that’s a very material matter that should be disclosed.  If your wife caught you with the night manager in a compromising position, it’s embarrassing and should be no one’s business but your own.  However, if a buyer is likely to hear about it, the broker should know.  Any situation can be managed if the broker is in the loop.  Be less than honest or hide something and it will certainly surface.  That’s another surefire way to keep from selling your restaurant.

There are, unfortunately, many ways to sabotage the sale of your restaurant.  Avoid these for a successful transfer.  Need help selling your restaurant?  Reach out to us at the link below.

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Topics: Selling a Restaurant

Casting Call -- Flip Your Restaurants - Contact We Sell Restaurants Today!

Posted by Robin Gagnon on Oct 3, 2018 1:49:59 PM

A major cable TV network has reached out to We Sell Restaurants seeking restaurants ready for an overhaul.  Are you buying a restaurant or selling a restaurant that's ready for prime time?  This could be the time to get noticed on national TV and have someone else pick up the bill. 

It appears this is a “makeover” or “before and after” type show that will take an existing concept and make a pretty significant change.  We're thinking this is Bar Rescue for restaurants.  Their flyer asks restaurant owners facing these situations to get in touch.   

  • Is your restaurant barely getting by?
  • Are you talented and have mad skills but struggling to bring it all together? 
  • Do you want to rehab your concept and reinvent your restaurant?.

Autumn Open House Photo Social Media Graphic

What do you think?  They want to film for roughly two weeks this fall, and they will invest between $25,000 and $100,000 depending on the size of your restaurant. On the plus side, this seems like a great opportunity for mom and pop restaurants for sale looking for a new design.  We're not sure what the final program will look like, but they are certainly investing in the concept.

What’s the downside?  We don’t know who the talent for the show is yet.  The mysterious flyer leaves that part out of the deal.  What if you’re a long running seafood restaurant in a small rural area and they want to change you into a big city style steakhouse?

Is it work the risk?  We say, go for it!  What’s the risk to have a conversation, send in some photos and see what develops.

What if you’re buying a new restaurant with the help of We Sell Restaurants?  This could be a win for you as well.  You get the experience and assistance of big players who want to make this look as good as possible to air on national TV.  If you’re launching a new concept, this could be the ideal situation to create buzz for your new restaurant and find yourself with a huge PR win out of the gate.

Interested in knowing more?  We are too!  We hope one of our many restaurant buyers or sellers end up on this show and we’ll be cheering for you every step of the way.  Contact the restaurant brokers and we'll put you through the network producing hit shows like these. 

  • Ayesha's Home Kitchen
  • Cajun Aces
  • Cake Boss.

Buying a restaurant and having someone else pick up the bill for the redesign and re-branding sounds like a great idea to us. What do you think?  

If you want us to connect you reach out to this email address and we'll pass along your interest. 

 

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Topics: Selling a Restaurant

5 Worst Things to Leave out of a Contract for Selling a Restaurant

Posted by Robin Gagnon on Sep 28, 2018 4:22:57 PM

If you are selling a restaurant there are some items that absolutely must be included in the language of any contract and agreed to by the parties up front.  These  items can mean the difference in getting to the closing table and seeing a deal crash and burn.

The starting point is the price.  Once that’s agreed to, it should be easier, right?  Unfortunately, not.  The brokers at We Sell Restaurants make sure all the following items are covered to keep deals both in contract and moving to the closing table.  That’s why 90 percent of our contracts ultimately close and fund versus an industry standard of less than one in three.

These are the deal breakers that show up at the last minute to wreck a contract. Don’t let it happen to you.  No matter who drafts the agreement, these are the must include, can’t forget, better remember, make sure you have, items that should be part of any agreement.

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The Equipment List –

For those selling a restaurant, you may have forgotten those times your beleaguered restaurant broker begged you, called you, texted you and hounded you for an accurate equipment list.  What he ended up with may not bear a strong resemblance to what is in the store today.  Why does it matter?  When it comes to an asset purchase agreement, the buyer will hold you to the equipment list attached to the contract. 

The equipment list reflects the assets transferring from the seller to the buyer and it must be accurate, or you will be held to account for it when selling a restaurant.

You don’t have two slicers any longer?  Better not put two on the equipment list or the buyer is within his rights to request the second one on the day of closing.  The Ice Maker is leased, not owned?  Better be prepared to pay off the lease on this piece of equipment.  If you have personal items in the store, they absolutely do not belong on the list of assets if you’re not prepared to part with them on closing day.  Bottom line.  If you’re selling a restaurant, get the equipment list right or it will bite you on closing day.

Assignment Fees, Transfer Fees, Attorney Fees –

Landlords often charge assignment fees to transfer a lease to a new party.  These can range from $500 to a percentage of the purchase price, an astonishingly large number.  Who should pay – the buyer or the seller?  If this is not defined in the purchase agreement, it can derail a deal.  A landlord will often not proceed on an assignment until the fee is paid.  This results in delays. Delays result in deals not happening. Don’t let this happen to you.  Make sure your agreement for selling a restaurant includes exactly who pays.  Be clear in the language that the seller will pay 50% and the buyer will pay 50% or the buyer will pay the assignment fee not to exceed $1500 but above all, put in language that addresses this issue.

The same is true for any other fees associated with the deal. This is where our ‘no surprises” rule comes into play. Neither the buyer or seller should find out anything at closing that weren’t aware of early in the transaction.  That means that attorney fees must be defined within the agreement.   The same thing is true for transfer fees if you’re buying or selling a franchise restaurant.  Who is responsible?  What is the amount?  When must they be paid?

Deposits –

Every restaurant has some form of a deposit, ranging from a lease security deposit to a utility deposit to the power company.  Landlords will typically never release these deposits but assign them over as part of the lease to the buyer.  Is it the buyer’s asset?  It should not be unless this is determined up front.  Make sure any agreement for selling a restaurant includes a clear determination of who owns those deposits. 

The most common language says something like this, ‘Any and all amounts currently on deposit for the benefit of the Business for utility services, leases, insurance, etc., are and shall remain the sole property of Seller and are not included as part of this transaction.”  If you are selling a restaurant and the agreement doesn’t say something like this, a buyer may challenge you that these are in fact, assets of the business that should convey to the buyer.  That’s thousands of dollars you can miss out on.  Avoid this by inserting language up front that deals with this.

Inventory -- 

In most cases, restaurant inventory is performed by physical count the night before closing and the amount is paid to the seller on top of the purchase price.  Note that I said, in most cases.  If you fail to include this in the purchase agreement, this will generate a lot of ill will that could lead to a buyer without enough funds to close.

Inventory is not a small amount.  We estimate at We Sell Restaurants, that inventory on hand is approximately one percent of sales.  For a sandwich shop generating $500,000 in sales, that means there can be around $5000 of inventory to be accounted for in the closing. 

An agreement between parties buying and selling a restaurant should specifically address how the inventory will be handled.  If it’s to be included, it should have specific language around this function as in, “Seller agrees to leave $3000 of fresh and usable inventory on hand to be determined by physical count.”

Any understanding related to inventory should spell out:

  • Which Inventory is to be included
  • How it will be counted
  • Status of inventory – i.e. fresh, usable, unopened inventory

Escrow -  

The handling of the escrow is the final item that must be understood by all parties when a purchase agreement is written for selling a restaurant.  Under what conditions will the deposit be refunded? What contingencies that fail will trigger a return of escrow?  Who will hold the deposit?  Is there a separate written escrow agreement? 

Having a clear understanding around the escrow deposit is another item that keeps deals on target to close instead of failing apart when selling a restaurant.

Want more help selling a restaurant?  Contact us at this link for a free, no obligation valuation.

Blog Byline Robin

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Topics: Selling a Restaurant

Five Top Risks when Selling a Restaurant

Posted by Robin Gagnon on Sep 24, 2018 3:51:55 PM

If you’re worrying about these five things when it comes to selling a restaurant, you’re not alone.  Here’s how to understand the top risks associated with selling a restaurant so you can plan to overcome these risks with strategies that win.

Selling a restaurant is never easy.  For many operators, their business is part of the fabric of their life.  It not only provides the means to financially secure their family, it’s also their connection to the community, a place of friendship and support, along with the place they are satisfied each day with the product of their work.  There are risks, however, when selling a restaurant.  We hope that by helping you be forewarned, you’ll be forearmed and ready to mitigate these risks.

Follow Me iPhone Facebook PostRisk #1 when Selling a Restaurant – Everyone will find out. 

Everyone will find out your business is for sale and employees will get scared and leave.  This is a real risk when putting your business on the market.  How does a strong restaurant broker keep this from occurring?  First, with the signature of all buyers on a legal document called a confidentiality agreement.  This is a contractual agreement not to disclose information that your business is for sale or risk legal action and some form of liquidated damages.

Do confidentiality agreements work?  In our experience, at We Sell Restaurants, these agreements do work to keep most people from sharing this information.  We require both a confidentiality agreement and proof of funds to be submitted to us for any would-be buyer.  That way, we reach a common agreement.  The broker has highly confidential knowledge of the buyer’s financial picture and the buyer has highly confidential knowledge of the business listing.  The risk to confidentiality usually occurs with inexperienced brokers who skip the qualification process and send out packages without both a confidentiality agreement and proof of funds in place.  

Risk #2 when Selling a Restaurant – My employees will leave.

Many sellers are concerned that key employees may leave if they learn the business is for sale.  In fact, many times that key employee is great target buyer for the business.  He or she knows the ins and outs. They have experience that a lender holds in high regard when writing a loan for the business. They may have limited means to invest but in today’s lending market, they won’t need more than twenty percent down in most cases.

In our experience, all employees, not just key employees, are less loyal to the actual seller (sorry to say), than they are to the location, the hours, the pay, the consistency and overall, the idea of the job they already have.  Most employees resist change.  Think about this from their perspective and it helps you overcome this risk in your mind.  For employees, it is riskier for them to find a new role outside the business, than keep the one they have.

Risk #3 when Selling a Restaurant – My Books Aren’t Good Enough for Lending.

As restaurant brokers, we’ve seen it all when it comes to bookkeeping for the industry.  In most cases, sellers are more concerned about getting through the lending process than the actual underwriting team.  While small business owners aren’t always meticulous about record keeping; it is rare to see a business fail this lending test because the qualify is not enough.

A standard chart of accounts for the restaurant business that properly reflects sales, cost of good sold, labor, occupancy and all other costs is difficult to even screw up in today’s world of POS systems capturing sales in real time and 80% of all transactions moving through your bank account from a credit card transaction.  Don’t be so hard on yourself.  In most cases, this risk can be overcome or at the worst, explained away to a good underwriting team.

Risk #4 when Selling a Restaurant – My landlord won’t transfer the Lease

 While few landlords outright deny a lease transfer, many will try and keep the seller on the lease as a guarantor, despite the quality of the new tenant. The way to mitigate this risk is to be sure that the restaurant broker qualifies the buyer in advance and carefully prepares a strong package of introduction to the landlord.  Allowing the buyer to go in cold or set up his own meetings with the landlord is the greatest risk in this process.  Most leases require that if a new buyer is qualified, the lease must be transferred.  Getting out of the guaranty is a little trickier but can be done with the support and guidance of a qualified professional. 

Risk #5 when Selling a Restaurant – My business won’t Sell.

On a scale of one to ten, this is the lowest risk to selling a restaurant depending on the advice you get and the broker you use.  At We Sell Restaurants, we see 90% of our inventory sell and a very active and willing database of buyers. On the other hand, there are major brokerage firms that report as little as 10 – 15 percent of their listings that make it to the closing table. 

If you are selling a restaurant, ask everyone you interview how many restaurants they have sold, not listed, but sold in the last year.  This is one of your greatest assets.  You should put anyone that wants the job of handling this transaction through a thorough vetting. 

These five risks are real, not imagined.  They are manageable, however, if you study this article and plan ahead to mitigate these issues and others that can arise in selling a restaurant.  Above all, choose a professional with knowledge of these risks and others before listing your restaurant for sale.   

Interested in seeing our restaurants for sale?  Click this link for instant access to hundreds of new listings.

Blog Byline Robin

 

 

 

 

 

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Topics: Selling a Restaurant

Franchise Restaurant Sales and Openings Nationwide

Posted by Robin Gagnon on Sep 21, 2018 2:34:34 PM

New Franchise Restaurants sales and openings are hitting more markets across the U.S.  Announcements for new stores and store openings in August and September range from Chicken Tenders to Chicken Salad Chicks with Curry Up, Breweries and Bars also in the mix.  Here’s what We Sell Restaurants sees nationwide in new franchise restaurant sales either announced or opening nationwide.  

Huey Magoo's Chicken Tenders Announce Expansion To Atlanta

Hailed as the Southeast’s fast-growing, greatest tasting chicken tenders brand, “Huey Magoo’s” is announcing several new stores in the Atlanta area starting next year.  Papa John’s Dean Thompson, Derry Thompson and Alex Larson are joining the Magoo’s team to bring the popular Central Florida based brand to the market with an initial 10 stores and possible additional 36 stores, totaling 46 new Huey Magoo’s franchises coming to the Greater Atlanta area.  The first restaurant is slated to open in April/May 2019, followed by the second store around December 2019.

Also announced recently, The Great Greek Mediterranean Grill is opening on September 21st Located at 11300 Legacy Ave, Palm Beach Gardens, FL 33410 with a Grand Opening Celebration of fresh flavor from salad to souvlaki skewers. 

Chicken Salad Chick is opening its newest franchise restaurant at 5050 Bayou Boulevard, Pensacola, Florida.  The brand serves the nation’s only southern inspired, fast casual chicken salad restaurant concept.  This is the brand’s third location along the Florida Gulf Coast and 17th location in the state. Owned by veteran franchisees Tommy and Stephanie Lauderdale, the new restaurant will include a variety of dining options including a drive-thru, takeout and catering.

The brand also announced the launch of its first restaurant in Oklahoma. Located in the Tulsa area at 1320 East Hillside Drive in Broken Arrow.  The new restaurant will open on September 20th and marks the brand’s 95th restaurant location across 10 states. The Broken Arrow restaurant kicks off a string of new market development for Chicken Salad Chick with restaurants set to debut in Arkansas, Kentucky and Missouri before the end of the year.

 

Curry Up Now Finalizes Multi-Unit Franchise Deal in New JerseyCurry Up Now, the largest and fastest growing Indian fast casual concept in the United States, has finalized a multi-unit franchise deal to bring its innovative, approachable Indian eats to markets throughout the state of New Jersey.

Franchisees Pritesh Benjamin and Tejavsi Patel plan to open Curry Up Now locations in the Central and Northern parts of the state, with sights set on opening their first location in the next six months. The New Jersey outposts will be the first for the brand in the Northeast region and join additional franchised units in development around the country.

The New Jersey locations join over 50 franchised and corporate stores in development, along with multiple market deals in the works in 13 additional states. Curry Up Now currently operates three food trucks and six corporate brick-and-mortar locations across the Bay Area, as well as two Mortar & Pestle cocktail bars in San Jose and San Mateo.

A new emerging brand, Sauce on the Side, opened on August 20th, in Chesterfield, Missouri.  Sauce on the Side first opened in 2012 when business owners Mangialardo, Maciariello, and Porzel collaborated to fulfill a goal – feed the community. 

Last month, Sauce on the Side celebrated the anniversary of six years with three corporate locations but opening the first franchise made it their biggest milestone yet. Robinson and Kaden plan to open four more franchise locations throughout Missouri. 13 more locations are on schedule to open throughout the Midwest in the next few years.

Moving on to alcohol and beer, always a good combination, Old Chicago Pizza & Taproom opened its newest location at 545 Wakarusa Dr., Lawrence, KS 66049 on August 29th. This is the 11th Old Chicago in Kansas, and the 108th location nationwide.

Del Taco Restaurants, the nation’s second leading Mexican quick service restaurant* (MQSR), announced that several established multi-unit franchisees within its system are continuing to grow with the brand in 2018 and beyond, utilizing Del Taco as a growth and diversification vehicle for their company’s portfolios.

Existing Del Taco multi-unit franchisees that have units which have opened, or expect to open in 2018, include Paul Hitzelberger, Mark Miller, Brent Veach, Doug Koch and Mark Schostak, each of whom are growing with the brand in their respective markets across the Pacific Northwest, each of the Four Corners states and Michigan, demonstrating Del Taco’s broad geographic appeal.

Hitzelberger, who is the recipient of the Utah National Restaurant Association’s 2018 Lifetime Achievement Award, opened his 32nd and 33rd locations this year. For diners in Utah, they know heading to a Del Taco means a great experience from a brand that supports the community, with the Hitzelberger team having donated more than $1.1 million to various local organizations since 2008.

Brent Veach, longtime Del Taco franchisee, will be opening two new restaurants by year’s end, one in the Denver area and one in the Phoenix area.

Twin Peaks Makes Highly Anticipated Ohio Debut

Twin Peaks – the ultimate mountain sports lodge – opened the first Ohio location in August at 5060 Monroe St., across the street from Franklin Park Mall.

The 8,000-square-foot space offers full-service dining and regular hours for both lunch and dinner. The new restaurant will also offer unbeatable Happy Hour specials Monday through Thursday, from 3-6 p.m., including great deals on House Brews, wines, cocktails and delicious made-from-scratch shareable appetizers.

Twin Peaks is so much more than the typical sports bar. The lodge welcomes every guest with primetime matchups and barrel-aged whiskey. The entire menu is prepared in-house, to order and in generous portions to satisfy every appetite. The hearty made-from-scratch comfort food pairs perfectly with a frosty draft beer or a classic whiskey cocktail.

Toledo marks the first Twin Peaks in Ohio and the 83rd system-wide

 In Michigan, visitors to “Little Bavaria” can now get their fix of traditional treats on the go as the Bavarian Inn Restaurant introduces its new mobile eatery, the “Cluck Truck,” just in time for the busy tourist season.

The “Cluck Truck” menu features snacks, sandwiches, entrees, and sweets reflecting some of the Bavarian Inn’s customer favorites. The truck launched on August 30th. 

Cowboy Chicken Opens First Georgia Location in McDonough on Sept. 3 with Chrystal Jakes, Wife of Former NFL Cornerback Van Jakes

 

 

Cowboy Chicken, the Dallas-based rotisserie chain known for its wood-fired chicken and handmade side dishes, opened its first Georgia restaurant in McDonough (90 South Point Blvd.) on Monday, Sept. 3.  Founded in Dallas in 1981, Cowboy Chicken is a fast-casual restaurant chain specializing in real wood-fired rotisserie chicken. The brand has been included in Fast Casual’s Top 100 Movers & Shakers list every year since 2012. In 2017, Cowboy Chicken was named one of the Future 50 Emerging Chains of the Year by Restaurant Business and one of the Top 25 Most Loved Brands by Foodable.   

Garbanzo Mediterranean Fresh – the leading Mediterranean cuisine brand renowned for its wholesome, healthy and simple dishes, top-quality meats and fresh-baked pita – opened in August in the Haupert Union Building on Moravian College’s campus. Garbanzo is headquartered in Colorado with 27 locations nationwide.

Located at 1125 Monocacy St., Bethlehem’s new restaurant marks the first Garbanzo Mediterranean Fresh in the entire state of Pennsylvania and Garbanzo’s fourth university location operated by SODEXO.

While a non-traditional unit, the newest Garbanzo features many elements of the recently refreshed brand trade dress. True to form, the new-look Garbanzo exudes a simple, refined and fresh aesthetic for the brand. The unit features a bakery area where guests will be able to see their pitas being lovingly kneaded, placed in the oven and puffed to perfection right before their eyes. Its welcoming décor and inviting “cocreation” service model will instantly make guests feel comfortable while they discover just how delicious nutritious can be.

Garbanzo is making fresh Mediterranean cuisine a mainstream favorite across the United States. Its authentic, nutrient-rich dishes derived from Old World recipes are served with a new twist, but without compromise. Every order is customized to the guest’s liking, from juicy, high-quality meats and salads made from scratch to gyros, wraps and pita baked from scratch all day.

Dickey’s Barbecue Pit new franchisee Josh Wise plans to open his first Dickey’s location in Newark, Ohio in September. Dickey’s Barbecue Restaurants, Inc., the nation’s largest barbecue chain was founded in 1941 by Travis Dickey. The fast-casual concept has expanded to more than 550 locations in 45 states.

With an extensive background in the restaurant and hospitality industry and a passion for pit-smoked barbecue, Josh knew that Dickey’s Barbecue Pit would be the perfect fit. The new location will have a variety of grand opening promotions in September to complement Dickey’s slow-smoked barbecue.

 The Brass Tap is expanding in the Golden State, signing a five-unit deal in Modesto. With the area’s strong appreciation for great craft beer, the brand is looking forward to introducing its innovative concept to a new group of loyal customers.

Franchisee Rick Sousa, who currently works in business development for Dust Bowl Brewing Company in Modesto, will own and operate the new locations. Sousa has been in the food service and manufacturing industry for his entire career and plans to use his expertise in the field to help his Brass Tap locations thrive.

Building on the momentum of Sousa’s five-store signing in Modesto, The Brass Tap is looking at expansion opportunities in the San Francisco Bay Area, aiming to capitalize on the growing craft beer scene in Northern California.

Outside of California, The Brass Tap continues to grow its presence throughout the country, including in Texas where an existing operator with the brand is preparing to sign for a five-store deal in Dallas.

Squisito Pizza & Pasta Opens in Queenstown, MD with FranchiseeSquuisito Pizza & Pasta also opened for business in the Queenstown Premium Outlets in Queenstown, Maryland as well. This location is the first Squisito owned by franchisee, Martin Hernandez. Hernandez has been working with Squisito for the better part of 2 decades and it was his dream to bring Squisito back to the Eastern shore.

Squisito is a fast-casual Italian concept, with multiple locations across Maryland and Virginia. This restaurant is the 4th Squisito Pizza & Pasta franchised location and is the 11th restaurant for the Monte Restaurant Group which also includes Meatballs, Etc. and Carpaccio Tuscan Kitchen. Squisito Pizza & Pasta will also be opening later this Fall in Oakton, VA with franchisee, Kevin Trump.

 

That is a crazy month or so of openings of franchise restaurants nationwide.  Was your old favorite or new up and coming concept in the mix?  Let us know at We Sell Restaurants so we can track all the franchise restaurants opening nationwide.  

 

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Topics: Buying a Restaurant

What are America's Favorite Restaurants and are they for Sale?

Posted by Robin Gagnon on Sep 17, 2018 10:07:18 AM

What are America's favorite restaurants and are any of them for sale?  Here are the answers since the latest list has been compiled according to an annual study by the Harris Poll.  The Harris Poll's EquiTrend study monitors thousands of brands.  In this year's study more than 77,000 United States based consumers participated.  They rated more than 3,000 brands across 300 categories, and 80 brands were named "Brand of the Year." 

Some results are expected and duplicate last year.  Other results are pretty surprising!  If these are America's favorites, is there a chance to get your hands on one of your own?  You bet.  The great news is that We Sell Restaurants has some of these very restaurants for sale in in our inventory.  Here are the results by category along with our thoughts on those taking the top spot, or surprisingly enough, not winning "best of" by this poll.  

For the Mexican category, Taco Bell knocked last year's winner, Moe's from the top spot to regain the position they previously held as the number one Mexican favorite.  Among our restaurants for sale, we do not include a Taco Bell but we have strong interest at We Sell Restaurants for virtually anything in this category ranging from fast casual Mexican like Moe's to full service dining.  Check out this current favorite among our Mexican restaurants for sale. Our restaurants for sale in this category range from franchise opportunities to independents.  

In the mood for the classic American Burger?  Five Guys took the top position in this poll.  From our restaurants for sale inventory, this burger chain opportunity tops the list at our website.  While the burger chains focus on the fast food to fast casual style of service, casual dining is a favorite of many consumers.  In that category, the Hollis Poll surfaced a tie.  The top spot was split between The Cheesecake Factory and Texas Roadhouse. Who doesn't love the opportunity to shuck their own peanuts at Texas Roadhouse?  

When it comes to chicken, the favorite is no surprise.  This chain manages to deliver the top average unit volume nationwide combined with incredible customer service.  Chick-Fil-A took top honors and this is a multi-year achievement for the brand.  If sweet is your passion, Krispy Kreme led the list in the coffee shop category.  This one is actually surprising for those of us selling restaurants for a living.  Because the category is coffee shop, we would have expected to see Starbucks take top honors.  Instead, they were knocked off by those who are serving the doughnuts and coffee hot at their locations.  

In the ice cream category, Ben & Jerry's took top honors.  Their eclectic mix of flavors even at premium price points had them leading the way.  In our restaurants for sale inventory, we feature a great opportunity to acquire a Ben & Jerry's delivering six figure income.  Here's a link to that business opportunity in Florida.

America's favorite pizza chain according to the Harris Poll is Blaze Pizza.  Now this was a surprise as Blaze doesn't have the footprint of many other chains.  Considering that they have only 286 stores nationwide, we are actually pretty shocked by this result.  

 For sandwich shops, there was again, a tie for the top position.  Panera Bread and Subway tied for first place in the sandwich shop category.  We have a number of Subway franchises for sale at this link and sandwich shops lead our inventory in store counts and interest by buyers.  Since these are easily operated, well trained by the brands and for the most part, avoid alcohol, late nights and even frying, they are among our most popular restaurants for sale. 

Did the Harris Poll cover your favorites or leave something out?  Send us your comments on this article. 

For more information on restaurants for sale, visit us online at Wesellrestaurants.com 

Adapted from businessinsider.com 

 
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Topics: Restaurants for Sale

Buying a Restaurant?  You're Not Alone.  Check out the Good Economic News & Sales in August

Posted by Robin Gagnon on Sep 13, 2018 11:24:50 AM

The economic news is good on all fronts for those buying a restaurant.  We Sell Restaurants posted a record month while national restaurant sales hit a three-year high.  If you're in the market for buying a restaurant, it appears that 2018 could be your year as all signs are positive.  Here's what we know so far.

Same-store restaurant sales were up 1.8 percent, making August of 2018 the best month in three years!  That's right.  September of 2015 was the last month with this much positive news.  Hurricane Harvey, which hit the Texas coast in August of last year, greatly impacted sales in the last week of that month, giving restaurants a built-in advantage. That soft comparison resulted in same-store sales growth of 2.9 percent for the last week of August 2018. The sales are reported from TDn2K’s Black Box Intelligence data, based on weekly sales from over 30,000 locations representing more than 170 brands and nearly $70 billion in annual sales.  

The Small Business Optimism Index soared to 108.8 in August, a new record in the survey’s 45-year history, topping the July 1983 high water mark of 108. The record-breaking figure is driven by small business owners executing on the plans they’ve put in place due to dramatic changes in the nation’s economic policy.

The August Small Business survey showed:

  • Job creation plans and unfilled job openings both set new records.
  • The percentage of small business owners saying it is a good time to expand tied the May 2018 all-time high.
  • Inventory investment plans were the strongest since 2005 and capital spending plans the highest since 2007

Pink Simple National Wine Day Social Meida GraphicPeople are working.  The national unemployment rate averaged 3.9 percent over the last four months.  There were 20 states reporting unemployment of 3.6 percent or less in July. This could translate to struggles for some restaurants going forward as they seek to fill opening and face competition for the best workers.

Turnover is Stable to Slightly down. People Report™ tracks staffing levels, demographics, turnover and provides compensation and benefits analysis for the restaurant industry on a monthly, quarterly and annual basis. The latest People Report metrics indicate turnover rates for both managers and hourly employees dropped slightly in July. Since employee retention and guest services are so aligned, this is good news for the industry as well. 

Restaurants are Selling.  In the month of August, We Sell Restaurants posted a sale virtually every other day.  Nearly 60% (57% to be exact) were franchise resales.  This demonstrates that a strong open and operating concept with bottom line earnings is a winning combination for those buying a restaurant.  Of the transactions for the month, many were for locations generating sales of more than a million a month and the lowest sales levels were restaurants selling with volume of just over $200,000.  

Forty percent of the units changing hands with the assistance of We Sell Restaurants were netting six figures or more.  This is a prime opportunity for those transitioning out of corporate America and seeking strong earnings for their families. This is despite the previously cited strong labor market which is also inducing those back into the jobs market at higher wages.

Restaurant Broker Robin Gagnon who was the broker of record for five transactions in the month and Co-Founder of We Sell Restaurants said this of the results, "The economic environment is certainly stimulating the overall market for buying a restaurant.  We predict continued strong sales for the year based on our current pipeline as we are currently working deals that will close in early 2019.  The best listings, especially those with high earnings, are seeing multiple contracts and backup offers."  She went on to say, "Part of the success we are seeing is the strong lending environment.  Our banks and lending contacts see the continued strength of the economy as a mitigating factor to any risk assigned to deals.  They appear to be factoring this into their lending and forward-thinking projections." 

With all this economic good news, is it the right time to be buying a restaurant or selling a restaurant?  For many, while the dollars and sense play a role, decisions are often based on family needs or lifestyle choices.  When the economic trends and the personal desires overlap in an environment that satisfies both needs, it’s a winning strategy.

 

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Topics: Buying a Restaurant

The 5 Worst Decisions You Can Make when Selling Your Restaurant

Posted by Robin Gagnon on Sep 10, 2018 12:11:31 PM

Interesting in selling your restaurant?  Here are five the absolute worst decisions you can make to keep the deal from happening, torpedo a would-be transaction and shut buyer’s down cold once they do express interest.  Most people only tell you the sugar-coated version of how to sell a restaurant.  We’re digging into the down and dirty advice from the We Sell Restaurants.  We’ve seen it all, but these five instances are the key reasons a deal gets sidelined and buyers move on.

Ignore the Broker’s Advice for Listing Price

The restaurant broker performing the valuation on your restaurant is relying on comparable sales, multiples based on the market conditions, lending approvals and years of experience to set the selling price.  As the seller, you’re relying on what you “need” or “want” for the business. Buyers are not interested in what you need from the sale or what you want for the business.  They are interested in obtaining a business in line with current market conditions for similar businesses with comparable earnings.

When you tell the restaurant broker that you want a price of $295,000 on a listing valued at $225,000, you are setting up a scenario for disappointment.  Make the decision up front on accepting advice or pay the price in lost months of opportunity and wasted marketing efforts.     

Forget about Operations Once Your Business is ListedThe 5

Taking your eye off the ball is never a good idea, especially when selling a restaurant.  Just because your business is listed with a Restaurant Broker, that doesn’t mean the deal is done.  Typically, you have months of waiting before the closing takes place.  It’s not the time to slack off, in fact, it’s time to up your game.  You will have buyers visiting as secret shoppers and determining if they want to move forward. 

We coach buyers to understand that they are always buying a work in progress and any improvements will lead to a better bottom line for them.  However, if last years’ service record was impeccable and you’re shorting people on night shift to save a few pennies, it will show.  That leads to buyer questions.  Buyer questions lead to negotiated deal terms and ultimately, impact the value of your business.  Decide now that you will keep the operations on track prior to listing your restaurant for sale if you want the best offers.   

Forget About Driving Sales; They Don’t Matter that Much, do They?

Another surefire way to torpedo a sale and keep from selling your restaurant is to start posting negative sales comps.  Positive sales are a requirement, not a suggestion.  Above all, stop the bleeding somehow, if you start heading into negative territory.  Figure out a way, whether through promotions, advertising, delivery, catering or somehow, to get your sales posted in positive territory until the restaurant is sold.

As restaurant brokers, we work with lenders who routinely deny loans because of sales trending or help sellers craft messages about why the trend is dropping. Don’t put yourself in this box unless you’re not that interested in selling your restaurant.

Stop Paying your Taxes

Here’s another bad decision if you want to shut down all the momentum for selling your restaurant.  Begin ignoring the tax man and the payments for payroll or sales tax.  If you think these items are not going to surface before the closing, you are dead wrong.  All attorneys preparing closing documents should be doing a UCC (Uniform Commercial Code) Lien Search.  That search will uncover any unpaid debts and liens.  Since taxing authorities are usually the first to file, these liens will show up. 

Any liens will have to be paid out of the closing or settled in some manner before you can sell your restaurant.  The fact that the liens are there will raise serious doubts in the mind of any buyer.  Can you be trusted if you don’t pay your taxes?  What other bills are out there waiting to surface? These are the doubts raised in a buyer’s mind when taxes aren’t paid.  This tactic is a surefire way to drum up a lot of wasted penalties and interest along with driving away buyers.

Be Less Than Honest, About Anything

There’s really nothing you can tell a restaurant broker that he hasn’t heard before.  What he or she can’t help you with, however, is what they don’t know.  If a pipe breaks and you close the restaurant for two weeks while it’s in contract, that’s a very material matter that should be disclosed.  If your wife caught you with the night waitress in a compromising position, it’s embarrassing and should be no one’s business but if a buyer is likely to hear about it, the broker should know. 

Any situation can be managed if the broker is in the loop.  Making the decision to be less than honest or hide something and it will certainly surface at the worst possible time.  In most cases, it’s another surefire way to keep from selling your restaurant.

There are, unfortunately, many great decisions you can make to help sell your restaurant.  Don’t sabotage the sale of your restaurant and avoid these five decisions for a successful transfer.  Need help selling your restaurant?  Reach out to us at the link below.

 

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Topics: Selling a Restaurant

Want to Be Amazing at Leasing a Restaurant?  Here's How.

Posted by Robin Gagnon on Sep 6, 2018 11:30:00 AM

Everyone wants to believe they are the best any anything they try.  When leasing a restaurant, however, the landlord will often have the upper hand.  Here are the tips from We Sell Restaurants so you can be amazing at leasing a restaurant, giving you the best chance at getting the space you want at a price that's right for your concept. 

Begin with the Concept

The landlord's first question when leasing a restaurant to a new candidate is to understand the concept you have in mind. Is it new to the market?  Do you have existing locations?  Is it a fad trending out or trending up?  Do the demographics of his center seem conducive to the style of restaurant?  Will it draw unattractive noise, create parking issues or conflicts with other tenants?  All of these items are on his mind so before you inquire about leasing a restaurant, make sure your ducks are in a row.Here's how to be amazing at leasing a restaurant

It seems simple but too many people looking to lease a restaurant approach the brokers at We Sell Restaurants or landlord without a firm concept in mind.  You must have your menu and your business plan.  You must have a clear idea of how it fits into the center, its demographics and how it will compliment, not complicate the other tenant's lives.  Only with a firm grasp of these principles can you determine the best location for your concept. 

If you don't have all this information in a written format as part of your business plan, you're not going to be amazing at leasing a. restaurant and you're going to get a turndown.  Move from a dream to reality by putting your ideas on paper, together with a menu and pricing.  Easily pull demographic information from online resources like government databases at this link and you'll increase your odds of beating out competitors and leasing a restaurant in the most desirable part of town. 

Set a Budget - Based on your Business Plan

How many seats to you need?  How many times will you turn over the tables in a night generating how much revenue?  Does your idea cry out for patio seating or space for live music to set up?  Starting down the path to leasing a restaurant space means you have to put all the details together. The size, number of seats, times you turn over the seats per night and outdoor seating bring you to an estimate of revenue.  That tells you how much rent you can afford.

Leasing a restaurant space because it's in the "hot" part of town without making sure you can cover occupancy costs is a recipe for disaster. You won't be amazing; you'll be astonished at how quickly you go out of business.  Don’t start shopping and leasing a restaurant space without a full understanding of the revenue and expense line.  If you need help with a business plan, try local resources like SCORE found at this link or a local college or university who may have an entrepreneurship community outreach or business incubator program.  They may just have an MBA program willing to take your plan on as a team project. 

Test your Concept – Consider Doing a Pop-Up

Everyone's excited and ready to go to market but if you want to be amazing in your approach, why not try it on for size first?  Consider doing a pop-up restaurant.  

A pop-up restaurant is an idea that gained steam in the last few years.  Instead of a fixed space, an unused restaurant space may be used by a number of concepts for a short run of their concept.  Invest the time and money in building a following through a pop up concept before you commit to the recurring cost of a monthly lease.  Take that valuable customer input and further develop the menu, build a social media following and then be ready to share that with any potential landlord.  It’s also a great way to build investor support for your new business before leasing a restaurant.

Begin Shopping for Restaurant Lease Space

Once these steps are complete, you're well on your way to being amazing at this process.  You can now begin shopping for a location.  Begin your search for leasing a restaurant on line and on the roads.  Contact restaurant brokers in the market and start looking at options online.  One resource for lease space is loopnet.com.  Check them out but before inquiring, make sure you have someone working on your behalf.  The person posting the ad is usually (though not always), working for the landlord.  Because you have done the work listed above, you now have an understanding of the size, budget and location.  Look at you!  You're already amazing at this and ready to get the best possible location

Don't Forget Second Generation Space

In particular, ask brokers if they have second generation lease restaurant space.  This is a great way to get more for your money.  A second generation space means it was previously rented for restaurant use.  That means the location will have existing infrastructure, typically walk in freezers or refrigeration, hood and grease traps. That’s money you will save over going into a new center that has never been built out for restaurant use.

That's it.  Follow this plan and you're going to land an amazing restaurant for lease space for your new restaurants.  Let us know when you're open for business.  We want to check it out.  For restaurant space for lease listings, click the link below. 

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Topics: Leasing a Restaurant

We Sell Restaurants Top Ten Listings for August 2018

Posted by Admin WSR on Sep 4, 2018 12:09:51 PM

By looking at the listings that were most popular this month, we can learn what buyers are looking at, and often see a trend.

 The trend this month is obvious to us, as nine out of ten of the restaurants for sale are open and operating! With only the one lease space making it to our top ten, our buyers have made it pretty clear that what they’re looking for right now is to take over an existing restaurant, rather that starting with their own concept.

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These two Smashburger locations are successful and producing income, it’s no wonder they’ve topped our list for the month! Tallahassee is in the sunny state of Florida, where we have our home office, which happens to have no state income tax, which is of course an incentive driving buyers interest in these locations.

 

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This adorable, traditional diner serving up a southern twist on East-Coast diner food, has proven itself to the locals of the town, earning a whole cast of regulars. With consistent food and performance, this diner has earned a number ONE rating for breakfast and brunch restaurants in the city! Everything is set up and clearly running well, all it needs now is a new owner!

 

 

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This microbrewery in Colorado is one of two on our list this month not from Georgia or Florida, but not without good reason. This fantastic Brewery has a Manufacture and Wholesale License that will transfer, as well as several accounts for off-premises sales that are also included. There is a Master Brewer willing to stay on a permanent basis, which is a rare gift to a new brewery owner!

 

 

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Well-reviewed and profitable, this next restaurant on our list features a bar, and has made it onto our top ten list, despite not being on the market for even two whole months! Clearly there’s something special about this Tex-Mex restaurant, maybe it’s the verifiable success even with it being a relatively new restaurant, maybe it’s the fantastic location!

 

 

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Another restaurant that has made it far in few days, this café has been on the market less than a month, and has just rocketed up to our top ten! With this kind of attention, it should sell quickly, but we feel like it would anyway, it’s adorable, has a fantastic price and rent, and is in an amazing main street location! With the potential to grow that this café provides, it’s easy to see why it’s so popular!

 

 

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The next listing on our top ten list this month is our only lease space this month, but it’s as popular as it’s ever been! It’s perfect for anyone who has their concept already, but just needs a space to put it in place! A second-generation lease space, like this one, has advantages over spaces that have not previously had open and operating restaurants in them. Things like the restaurant infrastructure like an in-ground grease trap and a hood system are already in place!

 

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This restaurant is open, but is approved for almost any concept by the landlord and is a fantastic opportunity to grow a business! With a fully equipped kitchen, below market rent, and a lease that’s valid through 2024, it’s easy to see why this restaurant is so popular with buyers. This location has an amazing price that is attracting a lot of attention, but all the other great features are what keeps people coming back!

 

 

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This Profitable pizzeria in Palm Beach County has developed a loyal following in customers, and a new following in potential buyers! Already on out top ten list this welcoming pizzeria is fully equipped is one of two restaurants on our list in Florida, and is just waiting to welcome a new owner with open arms and no income tax!

 

 

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Rounding out the top ten this month is the only restaurant in Texas to make the list, and it’s a franchise location brimming with potential! Part of a growing franchise this restaurant blends the simplicity of a pizzeria and the freshness of an upscale Italian eatery, serving high quality food in a fast-casual dining environment. With the current owner leaving the country, they won’t be backing out of this incredible deal!

 

 

 

All but one of the listings on our website that made it to the top this month were open and operating restaurants, pretty clearly telling us what buyers are looking at. But we also learned where they’re looking, with 60% of this month’s list being restaurants in Georgia, although 20% was from Florida, and Texas and even Colorado made appearances. No matter where you’re looking, if you haven’t found the right one yet, the restaurant brokers can help you.

Check out all of our 300+ listings online at wesellrestaurants.com

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