Advice for Buying a Restaurant and Selling a Restaurant

Restaurant Broker Ken Eisenband Recognized as Florida Deal Maker!

Posted by Robin Gagnon on May 15, 2017 8:46:39 AM

We Sell Restaurants Announces that the Business Brokers of Florida has named Ken Eisenband a Million Dollar Club Award Recipient and winner of the Dealmaker Award for the State of Florida.

Ken Eisenband, Franchise Partner for We Sell Restaurants closed enough restaurant sales in 2016 to place him in the Top 5 for completed deals in the entire state of Florida.  His activity is measured against every other broker in the state’s association which has more than 1400 members.  This is the second consecutive year Eisenband has earned this distinction along with being named to the Million Dollar Club.
46576-Ken_Eisenband.jpg

A long time Top Producer, Restaurant Broker Ken Eisenband leads the Fort Lauderdale, Broward County franchise office of We Sell Restaurants.  Ken has been a member of the Business Brokers of Florida (BBF) for two years and has earned the award each year, outperforming many of his peers for this achievement.  BBF or Business Brokers of Florida is a nonprofit association made up of the leading business brokerage companies and agents throughout the state of Florida. It is the largest state business broker association in the country, and the second largest association of business brokers in the world.  

Members of BBF must demonstrate their expertise and ability in business brokerage when applying for membership. Once accepted as a member they must adhere to a strict code of ethics.  The Association has more than 1,400 members, has over 4,000 listings and maintains a database of over 16,000 sold businesses for market data comparisons.  

Robin Gagnon, co-founder of We Sell Restaurants said of the achievement, 'Ken is an amazing Franchise Partner and inspiration to the team. Ken specializes in selling only restaurants while those he competed against for the award sell every type of business.  His commitment to buyers and sellers is unmatched."

BBF Award.jpgAs a franchisee of We Sell Restaurants, Ken underwent extensive training and testing leading to his designation as a Certified Restaurant Broker prior to launching his practice.  He is a licensed real estate broker in the state of Florida and graduated with Honors from The School of Hospitality at Michigan State University in 1983.  He has more than thirty years of experience in the restaurant industry

Ken founded the Ft. Lauderdale office of We Sell Restaurants in 2012.  He is currently working to expand his franchise territory and mentors multiple Restaurant Brokers within his team including:  Robert Morrison, Ken Allain and Everett Rashotsky.  He also serves as a training consultant for the We Sell Restaurants brand and conducts a portion of the training in his market. 

We Sell Restaurants is a franchise business brokerage firm specializing in the restaurant industry. The We Sell Restaurants® brand is known nationwide for professionalism, industry knowledge and unmatched service in the sale of restaurants.  They can be found online at wesellrestaurants.com.

Topics: buying a restaurant

Top 10 Restaurants for Sale in April by the Restaurant Brokers

Posted by Robin Gagnon on May 12, 2017 1:56:45 PM

What’s the pattern of views of restaurants for sale for April 2017?  It was a month of strong activity by buyers showing signs of Spring Fever excited by a new crop of listings.  South Florida topped the chart with activity on multiple listings while the Atlanta and Austin markets were also strong performers for the restaurant brokers this month.

 As always, we weigh the activity on listings based on the phone calls, response to our email blasts, signed confidentiality agreements and connections with our restaurant brokers.

Topping the list of restaurants for sale with the most views is a SUPER priced Italian Restaurant located in Broward County. This location has been hot since hitting the marktet less that 70 days ago. Priced at under $50,000 this listing has attrached the most buyers for the month in the We Sell Restaurants inventory.  

 
Listing ID:5311 Restaurant Broker Ken Eisenband    
Pizzeria for Sale -- Fast Casual Italian Restaurant in Broward County
Lease: Expires January 31, 2018 plus 2 three year options
Monthly Rent: $4612.78
Inside Sq. Ft. 1716
Outside Sq. Ft.
Price:$45,000
City:Tamarac

Ken Eisenband
(561) 350-3365

South Florida stayed in the mix with this Broward County listing attracting buyers.  They also loved this Italian Restaurant for sale that can retain its current look or convert to any concept.  This one made an impact on those looking to make their dreams of restaurant ownership come true. With an incredible monthly rent of less than $3000, this location won't be around much longer

Listing ID:5228 Restaurant Broker Ken Eisenband    
Restaurant for Sale in Ft. Lauderdale Can Convert to Any Concept
Lease: Expires July 31, 2017 with options to be negotiated
Monthly Rent: $2980
Inside Sq. Ft. 1700
Outside Sq. Ft.
Price:$58,000
City:Fort Lauderdale

Ken Eisenband
(561) 350-3365

The top three listings of the month had one thing in common -- Italian was on the mind.  This profitable location in the very desirable Rosewell, Georgia area garnered plenty of looks, calls, signed CA's and views on the Restauant Brokers top rated website.  The $1700 monthly rent is unheard of! No wonder it has already has multiple offers.

Listing ID:5441 Restaurant Broker Steve Weinbaum    
Profitable Italian Bistro and Pizza Business for Sale in Downtown Roswell!
Lease: 5 years
Monthly Rent: $1700 including CAMS
Inside Sq. Ft. 1600
Outside Sq. Ft. n/a
Price:$139,000
City:Roswell

Steve Weinbaum
(770) 714-4552

Austin Texas Restuarant Broker Dave Duce jumped into the top ten list with a unique opportunity in his market.  Buyersare clicking away to find out more. This Bar for Sale in Austin serves beer, wine and small plates.  This one was on the market for only seven days in April before landing in the top 5.  Buyers should prepare for a bidding war on this one!

isting ID:5469 Restaurant Broker Dave Duce    
Bar for Sale in Austin Serving Beer & Wine - Expand to Craft Beer & More
Lease: expires Nov 2020 + 5 yr option
Monthly Rent: $1850
Inside Sq. Ft. 737
Outside Sq. Ft. 60
Price:$99,995
City:Austin

Dave Duce
(512) 773-5272

Restuarant space for lease often creeps into the Top 10 and this Johns Creek, Georgia empty location was no exception.  Those ready to launch from the ground up liked the looks of this opportunity.  The very manageable 1200 square feet allows to keep the rent down monthly but still room for plenty of seats. What are you waiting for?

isting ID:5274 Restaurant Broker Cyndi Weinbaum    
Restaurant Space for Lease in Johns Creek, Georgia - Great Location
Lease: Negotiable
Monthly Rent: $$20.00 PSF + $4.43 CAM
Inside Sq. Ft. 1200 (Adjacent site can be added bringing total to 2400 Square Feet)
Outside Sq. Ft.
Price:$0
City:Johns Creek

Cyndi Weinbaum
 

Space for lease with equipment? Yes! This does not come along every day. This former Pizza place is flipping for a new owner! Sign the lease today and start cooking tomorrow.

Listing ID:5208 Restaurant Broker Ken Eisenband    
Fort Lauderdale Restaurant Space for Lease includes Kitchen Equipment
Lease: Negotiable with Landlord
Monthly Rent: $7393.50
Inside Sq. Ft. 2700
Outside Sq. Ft.
Price:$0
City:Fort Lauderdale

Ken Eisenband
(561) 350-3365

 Two for One!  This sounds like a Happy Hour deal but instead it's a restaurant for sale group also found in Austin Texas.  This features a long term lease and loyal clients.  The two restaurants for sale by Certified Restaurant Broker Dave Duce are turnkey ready for someone looking to start earning a profit.

isting ID:5465 Restaurant Broker Dave Duce    
2 Restaurants for Sale! 6 Figure Earnings - Sandwiches & Catering
Lease: expires March 2022
Monthly Rent: $1326
Inside Sq. Ft. 3200
Outside Sq. Ft. 200
Price:$299,000
City:Austin

Dave Duce
(512) 773-5272

What happens when we list a restaurant for sale with rent at just $1000 per month?  The phones go wild!!!  This crazy low rent in Inman Park is fully equipped and ready for a new concept.  The 1000 square foot space is perfect for a take-out or delivery concept and Restuarant Broker Steve Weinbaum's phone has been blowing up with inquiries.  Are you ready to take this one off the market?

Listing ID:5193 Restaurant Broker Steve Weinbaum    
Inman Park Atlanta Restaurant For Sale - $1000 per Month Rent!
Lease: 3 years with 2+ years remaining
Monthly Rent: $$1000 plus $1400 annual property taxes
Inside Sq. Ft. 1000
Outside Sq. Ft. n/a
Price:$49,990
City:Atlanta

Steve Weinbaum
(770) 714-4552

All in all, another record breaking month of activity for the restaurants fo sale across the country.   The southeast is booming in restaurant sales as evidenced by all this activiy on the restaurant brokers listing.  Want to see these and many other restaurants for sale?  Check out our full list of restaurant for sale listings online at this link. 

 

Topics: buying a restaurant, selling a restaurant

Unicorns and Restaurant Buyers Willing to Overpay – 5 Reasons Both are Rare

Posted by Robin Gagnon on May 9, 2017 3:52:45 PM

A recent discussion with a seller about the amount he wanted for his restaurant led to today’s article.  The seller, a smart multi-unit franchise owner agreed with the pricing of his business based on 2015 performance and the store was listed late in 2016.  When the next year’s financials were provided, this restaurant broker advised him that we were now overpriced.  It was clear that the business would not cash flow for lending at the asking price and was about 25% over the proper value.  This wasn’t a value judgment, it was simply a math problem with a clear answer.    

unicorn final.jpgNow remember, this was not a naïve or uninformed seller.  As a multi-unit owner, he agreed that if he were buying, he would not pay this number.  However, while he knew the business was now overpriced, his plan was to simply stick with his number and wait for a buyer willing to overpay.  

You can guess the next part of the story.  Multiple buyers looked at the listing.  It was a great brand.  It was in a good location.  The only issue is that sales declined between 2015 and 2016 and as a result, earnings declined by approximately 25%.  Each offer came in at the market price recommended by the restaurant broker.  Was I coaching the buyers?  No. 

Then how were these buyers savvy enough to know the business was overpriced?  In the world of buying a restaurant, a lot has changed in the past decade. For sellers seeking a restaurant buyer willing to overpay forthe business, here are five reasons we can assure you those clients are just as rare as unicorns.

The first and most obvious reason that buyers are less than ever before, willing to overpay for a business is their overall sophistication and understanding of valuation. In today’s marketplace, buyers are very savvy about pricing multiples and speak the language of valuation more clearly than ever before.  When we launched We Sell Restaurants and began as restaurant brokers in 2001, it was rare to never (just like those unicorn sightings) that a buyer would have knowledge of the process for valuation and compare deals on a comparable basis.  Today’s buyer is extremely sophisticated and has a lot more access to information that helps in this process.  For that reason, finding a buyer willing to pay more than they should is not a common occurrence.

The second reason that buyers who overpay are just as frequently found as unicorns is related to bank lending.  Unlike a few years ago, bank lending is a near certainty on a restaurant with good books and records.  That means each deal undergoes valuation with the lender and they will come back with the same valuation as the restaurant brokers each and every time. Bankers don’t lend on potential.  They don’t lend on the prior year and they don’t lend on fairy tales (like unicorns).  They lend on actual results.  Businesses that are overpriced won’t make the grade.

What is the third reason that buyers who overpay are as common as unicorns?  Restaurant brokers have significantly upped their game.  The best restaurant brokers in the business have degrees in finance, experience in banking or other strong financial skills.  Unlike a decade ago, simply putting a price on a business and hoping it would sell is long gone.  Smart brokers list properly and that gives buyers the information they need to buy at the right market values.

The fourth reason that buyers who will overpay are as common as unicorns?  Buyers have seen too many listings badly priced on the marketplace and in doing their due diligence, have learned quite a bit about the valuation process.  A restaurant buyer that’s already had something in contract and walked away is an educated buyer.

The last reason for finding buyers willing to pay more than a business is worth is just as common as a unicorn sighting is the Internet.  This giant repository of data at the fingertips of anyone willing to do a simple search will return a number of articles (including ours) on valuation of restaurants for sale.  I have to admit, it will also return plenty of images for “Unicorn Sightings” so buyers should be careful not to believe everything they see online.

If you see a unicorn, grab your smart phone and get a photo!  Meanwhile, if I find a buyer willing to overpay for a restaurant, I plan to move quickly to lock him down as well. 

My seller, by the way, is still waiting on someone to overpay.  I suspect it won’t happen any time soon.

 

Topics: selling a restaurant

Sweet!  Ice Cream & Frozen Yogurt Shops for Sale in Time for Summer

Posted by Robin Gagnon on May 2, 2017 3:13:41 PM

Summer will be heating up the United States before we know it. What better way to keep cool than by visiting one America’s favorite summer treat stores?  Check out these Ice Cream or frozen yogurt stores for sale.  These sweet opportunities are headed into their busy season.  

Before the summer rush comes along, join this $5.7 billion dollar business. Are you a fan of these frozen sweet treats?  Trust the restaurant brokers when we tell you that you’re not alone! Customers surveyed by one popular concept revealed that 45.3% of us eat a cupful of flavor sold at these frozen yogurt franchises for sale at least once a month.  That doesn’t count the ones who love these flavors more frequently.  Do you know that over 40% of those surveyed treat themselves every single week?

Ready to join the biz with one of these ice cream shops for sale?  Why not?  This is a simple operation in a small space that’s super easy to operate.  It’s not too difficult to weight the cup (in the case of self-serve) or scoop it up (for hard ice cream).  In addition, these frozen yogurt shops for sale don't (typically) involve late nights or alcohol so it's a worry free concept if you're new to the business world.

Americans love ice cream.  We are the number two consuming ice cream country in the world, outpaced only by New Zealand.  About 9% of all the milk produced in the United States goes to make Ice Cream.  Want to know more about our addiction to this national treasure before buying one of these frozen yogurt or ice cream franchises for sale?  It takes about 50 licks to finish a single scoop of ice cream and the perfect temperature for scooping ice cream is between 6 and 10 degrees Fahrenheit. That is chilling delicious!

Take a look behind the counter at our inventory of Ice Cream and Frozen Yogurt shops for sale.  These businesses offered by the restaurant brokers currently range from $249,000 on the high to under $40,000 for the least expensive opportunity. 

Most franchise approvals offer quick turnaround and frequent training so you can get going before the temperatures max out.  If you’re in the market for an E2 visa business, one of these ice cream or frozen yogurt shops for sale are perfect!  Easy operation.  Quick approval and eligible for E2 visa candidates.  Why wait for the summer rush, start scooping up these worry free, easy to operate concepts today!


 
 
Listing ID:5257 Restaurant Broker Dominique Maddox    
Frozen Yogurt Business for Sale in Savannah Downtown District
Lease: Expires August 31, 2021
Monthly Rent: $4752
Inside Sq. Ft. 1584
Outside Sq. Ft.
Price:$39,999
City:Savannah

Dominique Maddox
(404) 993-4448

Listing ID:5241 Restaurant Broker Eric Gagnon    
Frozen Yogurt Franchise For Sale in Michigan is a Winner!
Lease: Expires Nov. 2017 with 5 yr option to renew
Monthly Rent: $4304.00
Inside Sq. Ft. 1800
Outside Sq. Ft.
Price:$49,999
City:Rochester Hills

Eric Gagnon
(404) 800-6704

Listing ID:5032 Restaurant Broker Eric Gagnon    
Two Frozen Yogurt Franchises for Sale! Multi-Unit Opportunity
Lease: Expires April 1, 2018 | Expires October 16, 2021 with one 5-year option
Monthly Rent: $8874 | 5619
Inside Sq. Ft. | 1500
Outside Sq. Ft.
Price:$249,000
City:Bossier City | Shreveport

Eric Gagnon
(404) 800-6704

Listing ID:5024 Restaurant Broker Eric Gagnon    
Ice Cream Franchise for Sale in Tennessee
Lease: 3 years w/ one 5 year option
Monthly Rent: $2115
Inside Sq. Ft. 1400
Outside Sq. Ft.
Price:$79,000
City:Lebanon

Eric Gagnon
(404) 800-6704

Listing ID:4991 Restaurant Broker Eric Gagnon    
Franchise Frozen Yogurt Business for Sale - Profitable Store!
Lease: Expires June 30, 2016 with 2 5 year terms
Monthly Rent: $2961
Inside Sq. Ft. 1800
Outside Sq. Ft.
Price:$179,000
City:Joplin

Eric Gagnon
(404) 800-6704

Listing ID:4969 Restaurant Broker Eric Gagnon    
Profitable National Frozen Yogurt Franchise for Sale in Louisiana!
Lease: Expires October 16, 2021 with one 5-year option
Monthly Rent: $5619
Inside Sq. Ft. 1500
Outside Sq. Ft.
Price:$179,000
City:Shreveport

Eric Gagnon
(404) 800-6704

Listing ID:4765 Restaurant Broker Robin Gagnon    
Combo Cinnabon Carvel Ice Cream Franchises for Sale in Illinois
Lease: Expires January 31, 2022
Monthly Rent: $6500
Inside Sq. Ft. 630
Outside Sq. Ft.
Price:$149,000


Robin Gagnon
(404) 800-6701


 

 

Topics: buying a restaurant

Selling Your Restaurant…Beyond the Numbers

Posted by Steve Weinbaum on Apr 27, 2017 10:24:45 AM

The Restaurant Brokers at We Sell Restaurants work with hundreds of restaurant owners every year.  The number one question we are asked is: “What is my business worth?”  This is a math problem and easy enough to solve.  What may be less obvious are the other items included in the transaction. 

Our advice to anyone who is thinking about selling their Franchised or owner-operated restaurant is to make sure all your information is accurate and up-to-date.

We’re not just referring to the obvious…the dreaded Profit and Loss statement.  Restaurants are primarily valued based on the sales and cash flow they generate. The better and more verifiable the numbers…the greater your ability to maximize the value of your restaurant.  That’s only part of the equation however. 

Many owners focus exclusively on financials and fail to make sure they are up to date and accurate when it goes beyond the numbers.  Case in point:  leases and equipment lists.   Sometimes the line between assets – also known as the FF&E or Furniture, Fixtures, and Equipment and leases are blurred, especially if the landlord owns part of the equipment.Twitter Image Template-3.jpg

Here are a few stories from the Restaurant Broker’s files to give you real life examples of what happens once we bring a buyer to the table.  This is AFTER we had a restaurant in contract and past due diligence.

Scenario 1:  Seller Doesn’t Own the Assets

In scenario 1, a restaurant owner listed their business for $59,000.  He was new to the business, had been open less than a year, but was starting to show some decent sales figures and turning a small profit.

An offer of $55,000 was received and agreed to.  The transaction progressed through due diligence and then the lease assignment process began.

The landlord informed the restaurant broker that he owned all the equipment and was letting the current owner use it.  Needless to say the seller should have never included assets he did not own as part of the sale.  The Buyer and Seller had to renegotiate the transaction for half of the originally agreed to price.  The seller only had goodwill to sell.

Scenario 2:  Seller Doesn’t Have a Lease in Place

In scenario 2, a bar owner listed his business for $250,000.  He had a great location at a below-market rent.  The seller had informed the broker and buyer he had five years left on his lease which was correct, according to the lease document. 

The value of the furniture, fixtures and equipment combined with the great location and lease rate generated an offer north of $200,000.  But when the buyer’s restaurant broker started the lease assignment process, he was informed by the landlord that the seller had failed to exercise his option to renew so he was effectively on a month to month lease. 

While the buyer was ready to overpay for assets, the landlord saw the opportunity to jack up the rates and the new rent would be 50% higher than what the buyer was expecting.   What happened???  Needless to say, the deal went south in a hurry.

The take-away here is that when you want to sell your restaurant, get all your ducks in a row.  Not just your P&L, which is still the most important part.   Go through your lease so you know exactly how much time you have left on it and what the assignment criteria is.  Confirm when your option must be exercised if you are anywhere near the end of your initial term.  For most landlords, they require that you give written notice anywhere from 90 to 180 days PRIOR to the end of the first term. If you skip this step, your lease is not assignable and there are no rates for the option years.

Lastly, when you provide an asset list, make sure it is current and accurate.  Don’t list items that are leased (like the dishwasher) or that you don’t own (like the Coke and Tea Machine) or items that are owned the landlord that you did not install.

When you get your restaurant under contract, the rubber meets the road.  The last thing you want as a seller is for the buyer’s offer to be based on inaccurate information.  These details will kill your deal and the opportunity to sell your restaurant.

Do you want a review of your lease or equipment list?  Contact Certified Restaurant Broker Steve Weinbaum for his expert advice on selling a restaurant or check out our restaurant for sale listings online at the link below.

 

Check Available Listings

 

 

Topics: selling a restaurant

A Restaurant Buyer or Seller’s Guide to Valuation by the Restaurant Brokers

Posted by Robin Gagnon on Apr 25, 2017 9:01:33 AM

While everyone has some idea how much they want to pay or price a restaurant for sale, the truth is, selling a restaurant is a math problem with a right and wrong answer

What is the methodology for restaurant valuation?  For lenders and sophisticated restaurant brokers familiar with the process it’s the Income Valuation Method.  This is the most favorable and trusted method used to value restaurants for sale.  In today’s lending environment, this is how we establish value and secure financing on a business.  A restaurant for sale with solid profits that fits the SBA criteria to both satisfy the buyer’s lifestyle needs and satisfy the debt payments with a 25% cushion will qualify for lending.    

 For that reason, the Income Valuation Method provides 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. 

calculator-988017_960_720.jpgA restaurant 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.

Add Backs are the benefits realized by a seller today that go away when he or she leaves the business. For example, owner’s 1099 or W2 earnings are calculated as Add Backs.  Any personal expenses such as a cell phone or auto expense for the benefit of the seller are also “added-back” to the bottom line to calculate the earnings.

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    restaurant for sale.  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 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 2.5 and 3 times times earnings, with market factors adjusting this up or down.  For purposes of this article, we are limiting our discussion to single restaurant units.  Multi-unit sales (anything above two, especially franchise) changes the multiple significantly and requires a whole different analysis and pricing model.

“How much to pay for a restaurant for sale? ” 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, find an expert restaurant broker to help you buy a restaurant.

Our restaurant for sale listings are all valued using the same methodology and can be found at this link.

Check Available Listings

Topics: buying a restaurant, selling a restaurant

Selling a Restaurant? 5 Pieces of Advice to get to “Sold”

Posted by Robin Gagnon on Apr 21, 2017 9:13:11 AM

Selling a restaurant can be easier than you think if you follow these five pieces of advice.   

Establish Trust with Your Restaurant Broker

It is critical when selling a restaurant to establish a relationship of trust between you and your restaurant broker.  The relationship between the Broker and Seller must be one of complete honesty.  We heavily advocate the “No Surprises” policy.  Pull out all the dirty laundry and make sure your broker is aware of every liability.  You may think you’re the only restaurant with a liquor license citation, a tax lien in the hundreds of thousands, a sexual harassment lawsuit by the waitresshandshake-2056023_960_720.jpges or back rent of $35,000 but trust us when we say, the experienced restaurant broker has seen it all before. 

You’ve hired his or her knowledge because they know how to work through the issues, resolve them and keep this deal managed through to the closing table.  The worst mistake you can make as a seller is to hide anything from the broker.  The only thing he can’t deal with is something he’s not aware of.  Remember, no surprises.   

Establish a Communication Strategy

Secondly, make sure you ask the broker how they  communicate with you.  Some brokers have highly standardized systems that enter Buyer notes and automatically send you an email when someone communicates with the broker on your listing.  Our system does that.  Others simply call when there’s significant activity.  Still other brokers aren’t great at communicating the status of the listing at all. If you want ongoing updates and that’s important to you, set the expectation with your broker early.  If you only want to hear from him when he’s got a deal, share that too.  Brokers that specialize in the restaurant business know the hours.  They don’t call anyone at 8am since they know you work late nights.  They also don’t call you between 11:30 and 1:30 if you operate a lunch business.  They never call you at the restaurant since they don’t want to open up a confidentiality issue or if they do, they leave a message using their first name only. Tell your broker what you want to hear and when you want to know.  

Understand the Listing Agreement

The relationship between a seller and his broker is formalized through a listing agreement. This is a contractual obligation.  Make sure there are no misunderstandings about what you are selling and who is authorized to sign so that offers move quickly to the closing table. 

Have all of the partners consent and sign a corporate resolution to sell before signing the listing agreement.  This protects you when offers come in and one partner changes their mind or another is in Brazil for two weeks without email.  Sign and get a corporate seal on a document that says, the corporate officers met and agreed to sell the business by a vote taken this day.  Give one partner the authority to sign on behalf of everyone else.  When the partners are a husband and wife, this step is sometimes unnecessary.  If there are several partners in the business, the broker may require the resolution along with signature on the listing agreement. The broker will have a copy of this form and a copy is included in the appendix.

Check Your Legal Status

Make sure you understand who is selling the business.  The listing agreement must be signed by the legal entity that owns the business assets for sale (and the one on the liquor license).  Therefore, the legal name of the selling business is always used on the contract.  Another step you should take as a seller is to verify the status of your corporation.   Go online at the Secretary of State website for your state and make sure that the officers listed in the state website are correct and that all filings are up to date.  Failing to do this at the onset will cause problems down the road when a contract is written.

Relax and let the Restaurant Broker Work

Once the listing is in place, keep the business in the best possible shape.  Make sure sales stay flat or are increasing (never in decline).  Look at the business with a critical eye and go ahead and call in the cleaners and make minor repairs to freshen up the store.  Most of all, concentrate on what you do best – operating a business and let the restaurant broker focus on bringing a buyer to the table.

Follow these basics on how to sell a restaurant and you’ll go from a restaurant for sale to a restaurant sold without a hitch.

Looking for the restaurants we've sold?  Check out our restaurant seller testimonials from other restaurant sellers at this link.

Topics: selling a restaurant

Featured Listing -- 8 Franchise Units in a Major Market EBITDA of $434,000

Posted by Robin Gagnon on Apr 17, 2017 3:30:13 PM

This featured listing is an amazing opportunity to anyone looking to expand their portfolio into a multi-unit franchise ownership. This package concentrates all the authority for a national brand into a single operator in a major market.  You get a money driving food truck and eight locations that are pumping out volume between $500,000 to $646,000 at each door.

The opportunity, priced at $1.695,000 is a smart buy.  The volume of these locations is over $4.765 million.  Currently handled with a smart District Manager in place, all the operational controls are already there!  The $434,218 in EBITDA calculations includes the franchise royalties, the district manager and store level management. These types of sales and revenue do not come along every day! Plus there is a right to develop another location adding to that bottom line.

Unmatched opportunity with this fully dressed out Food Truck that is plugged into the entire local scene including all major sporting events (think final 4) and much more. This will not remain in the restaurant brokers’ inventory for long.

These eight locations are quick casual National Sandwich Franchises with limited hours keeping labor cost low. No alcohol or frying of food makes these locations easy to run. The payroll for the District Manager and store leadership is all calculated in the EBITDA on these franchises for sales. This is an award winning, top ranked brand that is showing consistent growth and expansion and has a superior support system.  However, a buyer must demonstrate strong liquidity (7 figures or more) and have relevant multi-unit food service experience to qualify for this outstanding opportunity.

Located in a booming part of the nation that is full of sunshine this area rates among the top 10 best states in job creation. You will have business year around waiting to eat up this delicious concept.  A wealthy and thriving community among all the states gives this southwest destination a bottom ten ranking poverty.

Ready to eat up this rare opportunity. Bring us your net worth of 7 figures and show you previous multi-unit experience. The franchise is ready to make a deal! All stores have long term leases with favorable terms.  This is an award winning, top ranked brand that is showing consistent growth and expansion and has a superior support system

Current ownership team is moving out of the business to pursue other opportunities and is interested in making a deal happen quickly.  Let's talk terms!

This should qualify for SBA lending with no issues and the restaurant brokers will have you in front of our resources for a quick approval.  We must see liquidity of $1,000,000 on this transaction in order to meet the brand requirements.  Send directly to Certified Restaurant Broker Robin Gagnon for a complete package on these franchises for sale.

expansion and has a superior support system.  However, a buyer must demonstrate strong liquidity (7 figures or more) and have relevant multi-unit food service experience to qualify for this outstanding opportunity.

Located in a booming part of the nation that is full of sunshine this area rates among the top 10 best states in job creation. You will have business year around waiting to eat up this delicious concept.  A wealthy and thriving community among all the states gives this southwest destination a bottom ten ranking poverty.

 

 
 
Listing ID:5454 Restaurant Broker Robin Gagnon    
Franchises for Sale - Major Market 8 Units $4.8 MM in Sales
Lease:
Monthly Rent: $
Inside Sq. Ft.
Outside Sq. Ft.
Price:$1,695,000


Robin Gagnon
(404) 800-6701

Topics: buying a restaurant

Donato's Pizza Franchise SOLD in Huntsville Alabama by the Restaurant Brokers

Posted by Robin Gagnon on Apr 13, 2017 6:13:16 PM

Business transactions are up!  According to a national report by BizBuySell, Small Business Transactions jumped 29% in the first quarter of 2017. We Sell Restaurants contributed to that trend with many transactions including a Donato's Pizza Franchise in Huntsville, Alabama, sold by Certified Restaurant Broker Steve Weinbaum. 

pizza-435930_1280.jpgDonatos Pizza is a pizza delivery restaurant chain headquartered in Columbus, Ohio.  The brand has nearly 200 locations in eight states and helped to serve up many of the 5.5 billion pizzas sold last year.  The buyer,  James Weinberger is a local Alabama resident who has already attended the training and taken over operations.  He will be spending time as a hands on owner/operator in the store.  

This local unit sold by the restaurant brokers has been operating since 1999 and is well known in the Huntsville, Alabama market.  The store, located at 7500 Memorial Parkway S in Huntsville has four-star customer reviews on Google.  Huntsville is the fourth-largest city in Alabama and the 2013 Census placed the population just short of 700,000. 

In its home market of Columbus, Donatos commands a 35 percent market share in the pizza segment. Donatos is on the cutting edge of customer knowledge, market intelligence and digital service. With average restaurant sales over $1M per year, Donatos is one of the strongest financial performers in the pizza segment.  The Donatos Pizza concept started as a family owned chain before being acquired by McDonalds in 1999. The founding family reacquired Donatos from McDonalds in 2003.

 

 

The seller, Ben Wheeler, has been running the franchise location for over a decade and was excited to turn the reins over to the new buyer.   Delivering up quality and great service to hungry pizza consumer has it rewards, but Mr. Wheeler decided to take another path.  He contacted We Sell Restaurants to list his pizza franchise for sale in September of 2016 and the Restaurant Brokers found a buyer, negotiated the transfer process with the brand and closed on the transaction just 132 days later.   It took just 16 buyers working closely with We Sell Restaurants, before the deal was in contract and headed to the closing table. 

 

The legacy franchise pizza restaurant for sale was sold as an open and operating location in its 2600 square foot space that was fully equipped. The transfer includes the remaining term of the franchise agreement and additional option years to renew. 

If you're lookcing for a franchise pizza business for sale like this opportunity, our listngs coast to coast can be found online at this link which includes a number of pizza business for sale alternatives.

Ready to sell your restaurant?  Give us a call at 1 888 814 8226 or follow this link and we'll get back to you quicklky with a free valuation on your restaurant for sale.  

 

 

Topics: selling a restaurant

Buying a Franchise Restaurant for Sale? Don’t Sabotage Your Approval with These Mistakes

Posted by Robin Gagnon on Apr 11, 2017 4:37:06 PM

blog.png

 

In the course of buying a franchise restaurant, there are a number of hurdles to overcome, not the least of which is the franchise approval.  For most brands, that includes a process for application, followed by a Discovery Day and culminating in an approval for the franchise restaurant buyer.  How does this go “off the rails” and result in a turndown?  Here are the surefire mistakes we’ve seen that destroy a relationship before it gets going.  The Restaurant Brokers can nearly guarantee a non-approval once you start down these paths to self-destruction or non-approval.   

Franchise approval starts and ends with the very thing each franchise restaurant for sale brand is actually selling to you.   They are selling access to their trademark, their trade secrets and a defined way of doing business.  For virtually every brand, the word “process” is critical so the first, most critical step is following their procedures in applying. 

Sabotaging Your Approval by Attempting to Leapfrog to Approval without a Contract 

Here’s one path to denial; changing up the application process.  For almost every franchise restaurant resale, the brand requires that first and foremost, you have an offer in place with the seller before you begin working on franchise approval.  The only exception to this is for a current franchisee of the brand.

Most franchise brands have a right of first refusal.  They want to hear from that franchisee – the one they are in an existing business relationship with, before they start talking to you as a potential buyer.  Therefore, until you and the seller have agreed on a price and come to initial terms, you should not circumvent the application process and go directly to the brand. The seller will either ask his restaurant broker to handle this or will take care of it himself.  In either case, the seller authorizes the first introduction.   

Certain buyers attempt to evade this requirement and go into the approval process as a “new buyer” and then tell the brand it’s for a resale.  This is a classic bait and switch.  Trust us when we tell you that the franchise development team working with you does not like this approach.  Their compensation for new sales is usually very different from resales and souring the relationship with the Area Developer or person who will be overseeing your success (and the transfer process) for the near and long term is not an advisable step and will quickly lead to a turn down.  If you are not trustworthy, why should an established brand bring you on board their team? 

Sabotaging Your Approval by Ignoring the Process & Timelines

Some franchise restaurant buyers come to We Sell Restaurants and simply don’t believe they have to follow the laid out application process.  A brand says they want to see proof of funds first and the buyer says, I’ll show it when we’re further down the road.  The franchise requests that every partner be available for the Discovery Day and only one of the two attends.  The brand says all the paperwork to attend Discovery Day must be submitted by the first and they get it in on the 10th.

A franchise is based on a business process, a shared set of systems and an approach to the industry that generates the fastest route to success.  For many brands, it’s not about the results of each step in the process, it’s that you can follow directions and execute to a planned outcome.  Think about it.  If a franchise restaurant requires consistency across locations, why would the brand welcome you with open arms if you are in fact, a maverick that simply wants to do it your own way?  If you want to keep from sabotaging your approval, follow the process, in order and in a timely manner.

Sabotaging Your Approval by Asking for Concessions First!

 As a restaurant broker, I have to admit that even I am shocked by this one but I see it at least once in every twenty or so transactions.  Buyers will have their first call with the franchise and despite having been prepped up front to understand the length of training or the menu items or any manner of things, they immediately begin complaining (and negotiating) about these items on their first call with the brand.

Is it possible to get concessions related to the time of training or the menu items or the service of alcohol or any other item a buyer may have on their mind?  The answer is…sometimes.  The time to raise these issues however is not on the first call. Think about this like a first date or a “getting to know” you call.  Any item you want to attempt to negotiate should be much further down the road in discussions.  For example, a requested one on one with Operations at your Discovery Day may be a time to bring your resume and point to your relevant experience and ask for a shortened time frame for training.  But just as you would never tell a first date, that having five kids is part of your life plan and it’s a “take it or leave it” proposition, hold any thoughts on concessions until the franchise has met you, decided they like you and have offered to have you come on board.  You’ll be much more successful on the “ask” and keep from shooting yourself in the foot on being approved in the first place.

Avoid these three ways of sabotaging your franchise application and you are well on your way to approval.  Fall into the trap of one of these and you should go ahead and start looking at other brands. Looking for a franchise restaurant for sale?  Check out our inventory at these links.

 New Call-to-action

 

 

 

Topics: buying a restaurant