Advice for Buying a Restaurant and Selling a Restaurant

Restaurant Sales -- March Brings Green to the Industry's Bottom Line

Posted by Robin Gagnon on Mar 17, 2017 12:50:29 PM

Sales may have slipped nationwide in February but restaurant owners are hopeful for a March turnaround. National reporting on sales and traffic indicated a very tough February.  Same-store sales fell 3.7 percent in February, with traffic declining 5.0 percent.  What contributed to the decline?  A few items including weather and shifts in the holiday timing of Valentine’s Day and President’s Day, plus delayed tax refunds by the IRS could be factors, based on feedback the restaurants brokers are hearing. 

st-paddys-day-2049043_1920.jpgValentine’s Day sales can spread across an entire weekend and are especially good when the date falls on either Thursday, Friday or Saturday.  For 2016, Valentine’s was on Monday, close enough to the weekend that Friday and Saturday reservations along with Sundays were all strong.  Moving to 2017, the event was on Tuesday, one of the slowest traffic days for restaurants.  Couple that with many restaurants closed on Monday (that would have opened last year for the holiday) and you just didn’t see the lift in February sales you would normally see for the event.

Another contributor to a slow February is the delay of roughly 40 million tax refunds.  The IRS held onto refunds for filings with Earned Income Tax Credits this year.  In prior years, over 30 million families received refunds in late January which would have contributed to February sales.

That’s the bad news. What’s the good news?  March is here!  St. Patrick’s Day kicks off on a Friday this year versus a Thursday last year.  With all the alcohol and food associated with St. Paddy’s Day, coupled with March Madness (basketball tournaments), we are anticipating a strong March.  Couple that with the late tax refunds hitting in March not February, upticks in consumer optimism and reports of more jobs being created in almost every sector and March could be a banner month for restaurant sales. 

For St. Patrick’s Day, the alcohol sales are unmatched.  Green beer is on the menu at many pubs and restaurants.  Guinness alone will rack in a 13 million pints consumed for the St. Paddy’s holiday which we believe will straddle the entire weekend.  With a pint costing an average of $6 that is 78 billion dollars added to the food and beverage business for the holiday. 

People all over celebrate this holiday with eating, drinking, parades and even some cities dye their entire rivers green. With the first St. Patrick’s day celebrated since 1903 it has grown to a holiday that can help the restaurants rack in their pots of gold.

Most restaurants will be serving up traditional Irish meals with a selection of corn beef and cabbage, cabbage soup, or good olé meat and potatoes. What lead us to these tasty dishes on this holiday? The potato became such a staple in the Irish diet when a terrible potato plague struck the crops in 1845, 1846 and 1847, the impact was catastrophic. Traditional corned beef and cabbage became known as thousands immigrated to the America during the potato famine, most landed in New York City. They joined other immigrants from Europe in the tenements of lower Manhattan. Here their neighbors mostly came from Eastern Europe and an important food in their diets was corned beef. It was cheap sided with plentiful amounts of cabbage and potatoes

 The Irish, many of whom had seldom been able to afford meat were introduced to this nourishing and tasty dish. They adopted it as their own and the celebration of St. Patrick’s Day with an ideal time to indulge in this ingenious combination of flavors and textures. Today more than 26 billion pounds of beef and two billion pounds are produced in the US each year. With the dish having an average price of $10 per plate that is lots of added profit to any restaurant.

The only caveat to all this good news for March is that Easter timing also moves.  While this will have limited impact for fast casual, pubs and other sectors, traditional restaurants that serve as “Special Occasion” locations may see the impact as March volume shifts to April.

The restaurant brokers don’t have a crystal ball but we’re hoping this Saint Patrick’s Day brings a lot of green to our clients and drives restaurant sales to new heights.  After a tough February, it’s time for a little pot of gold for the industry.

Want to see the latest listings by the restaurant brokers?  Follow this link to see our restaurants for sale. 

Check Available Listings

Topics: buying a restaurant

We Sell Restaurants Expands into the State of Minnesota

Posted by Robin Gagnon on Mar 14, 2017 2:02:38 PM

We Sell Restaurants Expands to Minnesota

We Sell Restaurants, the restaurant brokerage franchise selling more restaurants than anyone else nationwide, annouSt Louis.jpgnces their newest franchisee in the Twin Cities Market. Scott Ruby, a licensed real estate agent in Minnesota, has purchased the rights to represent We Sell Restaurants in the area.  The Minnesota location is scheduled to open in April 2017.

This new location marks the 10th franchise unit for the restaurant brokerage brand which began offering franchise units in 2012.  Scott Ruby, the latest franchisee is a graduate of University of South Dakota.  Scott is married to Molly Ruby who is also a licensed real estate agent, and they are the proud parents of three thriving children.

Eric Gagnon, President of We Sell Restaurants, say of the expansion, “We have had tremendous demand from the Twin Cities market for a local franchisee.  We have listed and sold several million dollars in restaurants over the past few years in this market.  Expanding with a local office allows us to provide a superior customer experience for those buying and selling restaurants.”

Scott has extensive expertise in both sales, operations and business management.  He will open his new We Sell Restaurants office with the mission to provide exceptional, unparalleled service to our clients.  

Robin Gagnon, co-founder of the brand says, “Scott is the ideal candidate for our restaurant brokerage brand.  He is focused on reaching his goals, through efficiency, focus on the market as well as client demand, and through application of his fantastic interpersonal skills. He has a dedication for providing uncompromised customer service which makes every transaction he manages seamless and stress free.”

Scott will undergo one of the most thorough training programs in the nation for business brokerage before embarking on his new role.  He will undergo testing before being awarded the title of Certified Restaurant Broker, a distinction held by only a few individuals nationwide. 

Restaurant buyers and sellers in the Minneapolis / St Paul market can expect to hear from Scott starting in April 2017 as the marketing kicks off in the area. Scott looks forward to working with the local restaurateurs, franchisees and potential buyers as they buy and sell restaurants

Topics: buying a restaurant, selling a restaurant

Latest Franchise Restaurant Sales and Deals Announced by the Industry

Posted by Robin Gagnon on Mar 1, 2017 10:15:22 AM

Franchising continues to grow and much of this is fueled by restaurants.  The IFA (International Franchise Association) recently reported that they expect Arizona, Utah, Nevada, Colorado and Florida to be the largest growth states this year.  Does that play out in actual openings?  We looked high and low for the latest franchise restaurants opening around the country from published reports and here's what we found by region.   Looks like the IFA may be onto something!  They did leave Georgia off the list where we're are seeing business pop.  Restaurant Broker Robin Gagnon noted that "Franchise deals are moving quickly along with the entire market right now."  Here's the latest franchise restaurant sales and deals we found by region. 

Franchise Deals.jpg

Southern Bound Brands!  

Halal Guys opened January 28 in red-and-yellow building on the corner of Chamblee Tucker Road and Buford Highway in Chamblee in Atlanta, GA.

Two Huddle House restaurants are opening.  The first in Jackson is planned this year while the second one in Forsyth, Georgia, is scheduled to open in 2018.The Jackson location will be Huddle House's 100th restaurant open and under development in Georgia

Atlanta-based GPS Hospitality, a rapidly growing franchisee group, said it will expand into five new states with the acquisition of 194 Burger King restaurants.  The stores are located in Louisiana, Mississippi, Alabama, Arkansas and Florida. Approimatley  30-40 stores each year going forward are going to be getting a remodel.

MOD Pizza announces its ninth franchise partner – Southern Pie, LLC – who will develop MOD stores in Georgia and Alabama. MOD has over 195 locations in 20 states including Arizona, California, Colorado, Idaho, Illinois, Kansas, Kentucky, Maryland, Michigan, Missouri, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Texas, Virginia, Washington and Wisconsin, as well as five locations in the UK.

An existing franchisee of Tropical Smoothie Cafe - Glen Johnson has inked a deal for 20 more stores in Texas.  He has already opened the first one -- Lubbock.  Johnson is the president of Rockland Ventures.  He currently has 22 open locations in Arkansas, Oklahoma and Texas. 

Uncle Maddio's Pizza signed Linda Zamboni, the former director of operations, franchise consultant and franchisee for McDonald's to open five units of the fast-casual pizza chain in the St. Petersburg/Clearwater area of Florida over the next five years. 

Sonny's BBQ sold nine of its 10 company-owned locations. Six of the stores are in the Orlando area and three in Gainesville.

Cheddar's Scratch Kitchen has acquired 44 restaurants. Franchised units involved are in Kentucky, Tennessee, West Virginia, Ohio, Indiana, North Carolina and Virginia. Cheddar's, which now owns 139 of its 164 locations

Little Rock, Arkansas is in the news again.  This time, Potbelly Sandwich Shop is opening a store there this spring. 

Jacqueline Mansfield of Miami, Florida has signed an 18 unit development deal with CoreLife Eatery.  Mansfield plans to open at least three CoreLife restaurants this year, the first to open in May in Florence, Kentucky. The next unit will be in The Summit at Fritz Farm, a premier retail facility located in Lexington. The third to open will be in Centerville, Ohio, a suburb of Dayton, in front of the new Costco. 

Western Bound

Despite the high costs of development often cited by these restaurant brokers, California continues to attract those opening new franchise restaurants.  Broken Yolk Café, a breakfast and lunch concept with large portions, is slated to open the second quarter of 2017 in the city of Corona.  Del Tacos just opened in Clovis and Fresno, California and fast-casual seafood concept Slapfish finalized a franchise agreement to build five locations in the San Diego area.

In other western states, franchise restaurants are opening.  Phoenix's Pizza LLC are opening the first full-service Godfather's Pizza, in South Jordan, Utah, 17-miles south of downtown Salt Lake City. This is the first restaurant in the couple's multi-unit franchise agreement with the pizza chain.

Arizona-based, Grabbagreen® is opened a second location in the Denver Metro area on Friday, January 20.  .

Forget the U.S. -- these are International deals recently announced.  

Yogurtland, announced its continuing international expansion with the opening of its first location in Singapore.  Hooters just announced the opening of a new international location in Managua, Nicaragua.   The Pie Hole is launching its first international franchise location in Tokyo. The Tokyo store is located just steps from the busiest train station in the world, Shinkjuku station in LUMINE Shinjuku. This is the first Pie Hole unit of 10 slated for Japan.  

Boston's Restaurant & Sports Bar is heading south of the border with an eight-unit deal in Mexico. The new locations will join the 13 existing Boston's in Mexico, and will be owned by seasoned hospitality group Desarrollos Juventud. The group is targeting areas of Torreón, Saltillo, Tijuana, Mexicali, Hermosillo, León, San Luis Potosi and Aguascalientes for restaurant development.

Topics: buying a restaurant, selling a restaurant

Franchise Restaurants On the Rise - Sector Expected to grow by $36 Billion This Year

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

The numbers are in and they are impressive.  The International Franchise Association has released its annual Franchise Business Economic Outlook for 2017.  The entire franchise sector is expected to grow by $36 billion in 2017, led by restaurants.. 

The group says the growth will be fueled by business and job additions, led by continued strong performance by the industry that uses the model most: Restaurants.  The report, released early in 2017 says output by franchise businesses is expected to grow to $710 billion in 2017, up from $674 billion or 5.3 percent in 2016, good news for the restaurant brokers.

HIS Markit Economics did the study for the IFA.  They suggest that the franchise sector will grow at a faster rate than the overall economy.  The report forecasts a number of factors including:dollar-544956_1280.jpg

  • Count of franchise establishments: Expected to increase by 1.6 percent to 744,437 locations.
  • Job Growth: Expected to provide nearly 7.9 million jobs, up 3.3 percent from 2016.
  • Gross Domestic Product: The franchise sector is expected to have a gross domestic product of $426 billion, up $21 billion or 5.2 percent from 2016.

The lion’s share of the forecast growth for 2017 will occur in the franchise restaurant industry.  Restaurants are the largest share of the franchise business with unit counts by large chains like Subway and McDonald’s driving this position as well as restaurant chains using franchising as their means to growth.

Eric Gagnon, President of We Sell Restaurants is not surprised by the report saying, “We have seen franchise restaurant sales continue to grow in all categories of service.  We expect 2017 to be a record breaking year as more stores come online and turn over.”

The report anticipates the highest growth to originate in full-service restaurants, where employment is expected to grow by 3.9 percent in 2017 and output is expected to grow by 6.8 percent, to $67.5 billion.

Quick-service restaurants, the highest turnover category for the restaurant brokers is expected to employ more than three times any other business sector that commonly uses franchising. The number of quick-service workers is expected to grow 4 percent in 2017 to 3.6 million. And output by quick-service restaurants is expected to grow by 6.7 percent to $237.6 billion.

Combined, quick- and full-service restaurants represent nearly 59 percent of the 7.9 million people that franchises are projected to employ in 2017. They are expected to represent 43 percent of franchise businesses’ total projected output for the year.

“Franchising is an American success story,” IFA president and CEO Robert Cresanti said of the results.  The Restaurant Brokers at We Sell Restaurant agree.  The firm not only resells franchise restaurants but is also franchising their concept nationwide in response to the increased demand.  Their goal is to sell more restaurants than anyone else. PERIOD.

 

Topics: buying a restaurant

Restaurant Sales in a Trump Economy -- What's the Impact?

Posted by Robin Gagnon on Feb 16, 2017 8:24:51 AM

The new White House is making a number of changes that affect the restaurant industry.  What will this mean to restaurant sales?  Here are key areas where the restaurant brokers see impact for the industry.   

President Trump2.jpgNew Labor Secretary was In and now he's Out

If you haven't been living under a rock, you've heard that Andy Puzder, the CEO of CKE Restaurants was nominated to the Trump cabinet as Labor Secretary.  As of yesterday, that nomination was withdrawn.  That's a shame since having someone from the industry was seen as a win for those of us in the restaurant business.   

At a recent apeparance at the Restaurant Finance & Development Conference Puzder told the crowd, “We have a government-mandated restaurant recession."  He went on to say, “The government did not intend this result. But it shows what happens when government tries to manipulate the economy. You cannot mandate the benefits of economic growth without actual growth.”

The overall concensus from the industry was that his nomination was a powerful one and most were cheering the decision to bring him onto the cabinet.  Now we'll take a "wait and see" approach to see what background the next nominee has and hope that will bring good news for restaurant sales.  There are several "hot button" restaurant issues in the pipeline for this administration including:  joint employer issues for franchisors, minimum wage laws and of course, Obamacare. 

Supreme Court Pick 

President Donald Trump recently nominated Judge Neil Gorsuch to fill the vacant seat on the U.S. Supreme Court.  If approved, Gorsuch, who has served on the U.S. Court of Appeals for the 10th Circuit since 2006, would replace Justice Antonin Scalia, who died in February 2016.  

The nomination was applauded by the National Restaurant Association, which recently asked the Supreme Court to hear a challenge to existing laws that prevent cooks and dishwashers from sharing in tip pools. 

Angelo Amador, executive director of the NRA’s Restaurant Law Center, described Gorsuch as “an experienced and knowledgeable judge who had extensive bipartisan support when he was confirmed to the 10th Circuit unanimously. We look forward to again having a full bench in the U.S. Supreme Court to decide cases of critical importance to our industry and the economy in general.”

Hospitality attorneys see the choice of Gorsuch, if confirmed by the Senate, as generally positive for employers. Since this pick is pending approval by the House and Senate, we'll sit back and see if he's able to make it through an increasingly divided Washington.

Corporate Tax Rate

All signs point to reduced corporate taxes under President Trump.  If he keeps his word on this promise, which was reiterated last week, we could be looking at serious growth in bottom lines for corporations which are mostly, small businesses like your local restaurant owner.  The stock market has moved into uncharted territories on the strength of this committment from the commander in chief.  With more money in the pockets of Americans, we are sure to see higher restaurant sales.

Immigration

Those fighting the new administration and its resolve to protect the borders are trying to bring the fight direct to the restaurant scene.  Today there is a nationwide "sick out" called for with illegals failing to come to work aimed at closing the doors of restaurants.  There are several celebrity chefs who are voluntarily shuttering today in solidarity (Rick Bayless for example).  This hot button issue seems to have reached a fevered pitch for a President most Americans elected based on a law and order approach.  The complextities of this one and its ultimate affect on restaurant sales is yet to be seen.

Obamacare

President Trump has already advised the IRS not to levy the Obama Care imposed $2500 fines against those filing 2016 returns that don't include health insurance.  The Congress will be addressing a repeal (according to some) or a revision (according to others). Either way, the industry is in critical need of a new look at legislation that brought tremendous new costs onto their books and into the households of most Americans over the course of its implementation. 

Small Business Optimism

Optimism on Main Street has soared in the President Trump's election.  The National Federation of Independent Business' survey said small-business sentiment for December hit its highest level since 2004.  That was an increase of 7.4 points in December to 105.8, up from November's 98.4. That was the largest month-over-month index change since it began in 1986.

How will the same index look today?  That's an unknown with President Trump facing an intrangient Democratic party and collusion among some long time government employees and hold-overs from the Obama administration.  Let's hope the good news from this report continues since members' perceptions were that business conditions would improve and that accounted for 48 percent of the month's increase.

What about restaurant sales?  The same survey said sales expectations also increased by 20 percentage points, as did the percentage of owners who believe now is a good time to expand, which is up 12 points.  The National Restaurant Association also reported optimism in December's Restaurant Performance Index. The industry expanded in December, albeit at a slower rate than in November. The association said that the index, a monthly measure of the state of the industry, closed out 2016 at 100.5, down slightly from 100.7 in November.  The association considers the industry to be in expansion mode when the index reaches above 100.

Operators are also “cautiously optimistic” about business conditions, with 33 percent saying they expect conditions to improve in the next six months. Only 15 percent expect conditions to worsen.

Restaurant Sales

What will restaurant sales look like under a Trump economy?  We have to see how much of his agenda is actually permitted to proceed and if he can truly get through the impasse being created in Washington.  It's clear that America sent him to Washington to make changes to the status quo.  At only three weeks in office (really just three weeks?), heads are spinning from his attempt to move forward on an aggressive agenda that includes all these points affecting restaurant sales.

All of these items will have implications for buying and selling a restaurant but if January and early February are any indication, the number of buyers in the market ready to get into the business are hitting record numbers and transaction counts for restaurants sold will hit record heights.  The restaurant brokers are setting new records with transactions for this year more than 65% ahead of last year.

Topics: buying a restaurant, selling a restaurant

Top Ten Restaurants for Sale in January 2017 by the Restaurant Brokers

Posted by Robin Gagnon on Feb 6, 2017 1:49:08 PM

The New Year is here and buyers across the nation are looking for new careers. The first part of any year has people looking to reach their New Year's resolutions. Many want to lose weight, get more organized, work on a promotion. It looks like our buyer’s resolutions have been to start new careers by working for themselves. From Georgia, Florida, to Colorado, and Texas buyers are motivated to fuel their New Year's resolution of owning a restaurant for sale.  

Price do not seem to be intimidating this year’s buyers. The listings with the most signed confidentiality agreements range in price from lease space with no key money to $599,000. Buyers are wanting to earn more this year which means they are looking to invest more in their futures.

 
Starting the list of the top ten restaurants for sale it this one that has it all. This listing was popular to buyer looking for a  downtown Atlanta location with a bar and 6 figure income. No wonder it  was on the market for less than 30 days and this location already has a contract with a backup and multipe offers. 
Listing ID:5245 Restaurant Broker Cyndi Weinbaum    
Million Dollar Bar for Sale in Atlanta - Unmatched Profits Owner Financing
Lease: 3 years left with 5 year option
Monthly Rent: $4727.81 including CAMS
Inside Sq. Ft. 3000
Outside Sq. Ft.
Price:$599,000
City:Atlanta

Cyndi Weinbaum

That Atlanta market is feeling the love with another listing on the top 10 restaurants for sale list.  This vegan concept come fully equipped with super rent and great location for under $50k. This listing won't last long.

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

This Moe's franchise restaurant for sale by Restaurant Broker RObin Gagnon not only had some of the most clicks, it made the phone ring off the hook! This popular franchise is driving buyers to find out more. This franchise restaurant for sale has been on the market for less than 30 days and it is destined to have a contract shortly.  Six figure earnings and a great brand!  Who could ask for more in satisfying their dream of buying a restaurant? 

Listing ID:5251 Restaurant Broker Robin Gagnon    
Franchise for Sale - Moe's Southwest Grill Nets Over $120,000
Lease: Expires July 2017+ 3-5 year options
Monthly Rent: $4130
Inside Sq. Ft. 2400
Outside Sq. Ft.
Price:$399,995


Robin Gagnon
(404) 800-6701

Coming in from the west, this cafe for sale located in Texas is ready for a new owner. This fully equipped location is emphasizes made from scratch dishes and is turnkey ready.  Restaurant broker Dominique Maddox is fielding the inquiries on this one. 

Listing ID:5183 Restaurant Broker Dominique Maddox    
Cafe for sale in Texas has the recipe for success. Ready for new owner!
Lease: Negotiable
Monthly Rent: $2000 including CAMS
Inside Sq. Ft. 2971
Outside Sq. Ft.
Price:$125,000


Dominique Maddox
(404) 993-4448

Texas makes the list of top ten restaurants for sale again with this unique drive thru location that's rolling with buyer interest. This location is offered at an incredible price of under $50k and is sure to roll off the market soon.

Listing ID:4958 Restaurant Broker Dave Duce    
Purchase this Restaurant for Sale with Drive-thru and Outdoor Patio in Austin, TX!
Lease: expires August 2020
Monthly Rent: $3675
Inside Sq. Ft. 1000
Outside Sq. Ft. 250
Price:$45,000
City:Austin

Dave Duce
(512) 773-5272

The sunny state of Florida is dishing up buyers  that are ready for a quick casual concept. This sandwich shop for sale location  in Cocunut Creek Florida comes with a busy shopping center and plenty of hungry shoppers at a low price of $50,000.

Listing ID:5238 Restaurant Broker Ken Eisenband    
Sandwich Shop for Sale in Coconut Creek Florida has Prime Location
Lease: Expires March 31, 2019
Monthly Rent: $5438
Inside Sq. Ft. 1600
Outside Sq. Ft.
Price:$50,000
City:Coconut Creek

Ken Eisenband
(561) 350-3365

Football season may be coming to an end but the party has just begun for this sports bar and grill for sale in Denver.  Buyers love the idea of a sports bar and a grill and this includes an entertainment venue.  Located in the greater Denver Metro area, this location is ready to score a buyer!

Listing ID:5244 Restaurant Broker John Kesterson    
Sports Bar and Grill - Entertainment Venue for Sale in Denver Metro Area!
Lease: New lease to be executed by buyer
Monthly Rent: $6197
Inside Sq. Ft. 3610
Outside Sq. Ft. Approx 400
Price:$114,900


John Kesterson
(720) 473-3726

This restaurant space for lease is one of the hottest locations in the Atlanta, Georgia market right now.  Second generation space is hard to find! This restaurant space for lease has the buyers with their own concepts clicking away.

Listing 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

This profitable restaurant for sale location is ready to swim off the market from the coast of Florida with buyers clicking to see more. This already established sushi location has a ready client base. If you have your own concept it can be converted. This one is priced to move.  The unheard of low price listing will not last.  

Listing ID:5087 Restaurant Broker Ken Eisenband    
Profitable Restaurant for Sale in Tamarac Can Easily Convert to Any Concept
Lease: Expires April 14, 2020
Monthly Rent: $2037.50
Inside Sq. Ft. 1200
Outside Sq. Ft. 0
Price:$49,000
City:Tamarac

Ken Eisenband
(561) 350-3365

Our restaurant buyers love sandwich franchises for sale by the restaurant brokers.  This location is in a great area with established hungry clients.  The minimal hours and fantastic lease have buyers looking at this hot listing.

Listing ID:5255 Restaurant Broker Robin Gagnon    
Sandwich Franchise for Sale in Dunwoody - Highest Growth Area
Lease: 5 Year Lease with 5 - Year option to renew
Monthly Rent: $7119
Inside Sq. Ft. 2621
Outside Sq. Ft.
Price:$155,000
City:Sandy Springs

Robin Gagnon
(404) 800-6701

January has proven to be one of the busiest times of year. It is a great time for buyers to fulfill their resolutions to work for themselves and sellers to move their business. All across the United States, We Sell Restaurants has seen an increase in interest and listings moving to contract fast. Now is the time to fulfill that resolution! Don't ait because it may not be there for long.

 

Ready to take a look at some of the latest offerings?  Click this link for the latest listings online.

Visit Our Listings Online!

 

Ready to Sell? We have buyers ready!

Free Restaurant Valuation

 

Topics: buying a restaurant

Who's Buying a Restaurant?  We Compare a Recent Survey to our Restaurant Buyers

Posted by Robin Gagnon on Jan 31, 2017 10:00:00 AM

Want to know who's buying a restaurant?  Guidant Financial just published a great infographic that shares all kinds of useful information about business owners.  While it is not specific to the restaurant community, it represents a lot of information that aligns with our restaurant buyers and sellers.  We compared their data to what we know about restaurant buyers to see how closely they lined up and the results are very similar.  Guidant-Infographic-Survey-That-State-of-Small-Business-in-2016-4.png

For example, 77% of the business owners in the Guidant survey are male.  That's spot on the We Sell Restaurants demographics for both our website traffic and our buyers.  

The top states for buyers on their report include:

  1. California
  2. Texas
  3. Florida
  4. Washington
  5. North Carolina

Okay -- we definitely don't align with this since we don't work in California but Texas is one of our largest states and it is number two on the list.  Florida is also a stronghold for the restaurant brokers and showed up in the power possition of number three.

It is interesting to note that two of the top five states do not have state income tax which may account for where businesses owners choose to live.

The age of most business buyers according to the Guidant infographic is right on target with our restaurant buyers.  A combined 88% of the buyers are either 40-49 or 50-59. Now we don't ask our buyers their age but we estimate pretty closely and this is on the money.

Where are business owners coming from? Fully 37% are opting out of corporate America, a phenomenon we referred to as "Corporate Refugees, Restaurant Wanna' Be's" in our book Appetite for Acquisition. We field calls every Friday afternoon as those stuck in cubicles determine there has to be a better way of life!

Only 19% of those in the survey were laid off and looking to replace income as business owners and that aligns with our restaurant buyers too.  While it's a healthy number at roughly 1 in 5, we find those laid off aren't as willing to risk their next career by moving into restaurant ownership.

When you look at the most popular industries, restaurants top the list!  Fully 15% of all business owners identify with Food/Restaurant as the industry they are part of while the next closest competitor is Health/Beauty/Fitness which is 50% less attractive coming in at 10% and tied with Business Services and Retail.

39% of the buyers surveyed are looking to buy an existing business or open and operating franchise.  That defnitely includes all the restaurant buyers coming to our website.  

The Guidant survey reveals that 35% of the small businesses purchased were under $175,000.  Only 7% are over 1 million.  As "Main Street" brokers, we see similar numbers for most transactions. 

What are the top challenges for business owners?  The Guidant survey indicates that recruiting and retention of employees are at the top of the list while capital and cash flow come in second.  In third place is time management.  

This one's interesting since most of our sellers point to quality of life and time management as reasons they want to sell. 

Overall, this infographic is a spot on guide to the motivations and demographics of not just general business owners but our restaurant buyers as well. 

Looking to buy a restaurant of your own? Check out all our listings online at this link or contact the restaurant broker today for more information. 

For more information on lending options for buying a restaurant including Roll Over 401K plans, visit our GuidantFinancial  prequalification page at this link.  Let them know the Restaurant Brokers sent you!

Visit Our Listings Online!

Topics: buying a restaurant

Professional Athletes Buying Franchise Restaurants - Trend Spotting

Posted by Robin Gagnon on Jan 26, 2017 5:07:42 PM

Can we still call it a trend when it's been going strong for some time now?  The Restaurant Brokers just read about the latest acquisitions by New Orleans Saints Quarterback Drew Brees.  It appears he's going for records both on and off the field!  A recent post in Franchise Times reveals that in addition to his interests in Jimmy John's and Walk-On Bistreaux & Bar agreement, he's now in a partnership to develop up to 69 new Dunkin' Donuts in New Orleans, Baton Rouge, Shreveport, Monroe and Alexandria, Louisiana.

Athletes.jpgSeems like this guy likes calling plays both on and off the field and his calls all include quick casual at this point!  He's partnering with an existing franchisee which is a smart move.  The franchise partner already has five existing stores which will be "co-owned" with Brees as part of the deal. HIs name is Vik Patel and he is the CEO of Tampa-based Purple Square Management Co.  He heads up Bourbon Street Donuts, LLC and has been a Dunkin' Donuts franchisee for 10 years.  He currently operates 46 restaurants in Alabama, Florida and Louisiana. Purple Square also has plans to open an additional 26 units in 2017.

The Bourbon Street Donuts group also includes former New York Giants offensive lineman and current FOX Sports broadcaster, David Diehl. How do professional athletes move from calling plays to quarterbacking franchise restaurant deals?  It's much more common than you may know.

What drives athletes to the restaurant industry? The restaurant brokers interviewed some pro athletes turned restaurant owners on our radio show and here's what we learned.

George Tinsley Sr.,, an icon in the industry who opened the first African-American owned T.G.I. Fridays® in the U.S. where it became the "No. 1 T.G.I. Fridays® in the U.S. for nine consecutive years, and continues to be a top performer,”  owns and operates more than 50 Florida franchises, with most locations in Miami and Tampa International Airports.  He told the restaurant brokers that "teamwork" and "competitive spirt" led to his success. 

We also interviewed Tye Hill and James Butler who together own three Golden Coral Restaurants.  Hill played in the NFL for five seasons for among others, the Atlanta Falcons, Tennessee Titans and Detroit Lions.  Hills says this of the restaurant industry, "Definitely go through training."  His partner James Butler played for the New York Giants when the team won Super Bowl XLII. He also played professionally for St. Louis Rams.   He told the restaurant brokers he got interested in the business because of "We know how to build a team.  We know what a successful team looks like."

The restaurant brokers were also joined on our radio show by Carlos Emmons, a former American football linebacker in the National Football League.  Emmons was drafted in the seventh round of the 1996 NFL Draft by the Pittsburgh Steelers and played for the Steelers until 1999. In 2000, he began playing with the Philadelphia Eagles and was named team Defensive MVP in his final year. He signed as free agent by the New York Giants in March 2004 and was released by them on February 12 2007, after having career ending back surgery. He is now the owner of the Wet Willies franchise in Atlanta Georgia.  When asked about the business, he says, ", “As soon as the star fades, the restaurant fades."  He goes on to say, “You can’t rely on the roar of the crowd.”

Some of the big name athletes involved in restaurant reads like a "who's who" of the superstar world.  "Magic" Johnson has an ownership interest in over 100 Starbucks as well as multiple TGI Fridays locations.  Cincinnati Bengals veteran Max Montoya traded in his Super Bowl rings (2 of them!) for franchising in 1995 and owns five Penn Station East Coast subs.  

Wingstop has been attracting investment from the entertainment world recently with a big buy from a known rapper but before Rick Ross went for this brand, Three-time Super Bowl winner Willie McGinest bought two stores.  He also owns a frozen yogurt franchise.  

Those on the gridiron aren't the only ones in the mix.  Jamal Mashburn, an NBA start and part of 1994 Dallas Mavericks now owns 71 restaurants including 34 Outback Steakhouse franchises and 37 Papa John's franchises.

The attraction for athletes to the franchise restaurant business includes a success rate higher than other industries.  Also, the ability to partner with existing franchisees such as the deal Brees just cut for the Dunkin Donuts units is also an added benefit.  Lastly, the International Franchise Association or IFA has been hosting events and working to market the benefits of franchise restaurants with this group.  After all, it's better to be in business with those who are already experienced rather than starting from scratch.  Want to listen to the full We Sell Restaurants interview with some professional athletes owning restaurants?  Download from iTunes at this link.

 

 

Topics: buying a restaurant

What to Expect at Discovery Day when Buying a Franchise Restaurant

Posted by Robin Gagnon on Jan 12, 2017 9:05:00 AM

If you're buying a franchise restaurant, you are sure to encounter a requirement to visit with the brand, meet the principles and in essence, undergo a job interview to join their brand.  

Discovery Day.jpgSomewhere in the history of franchising, "Discovery Day" became the common terminology for this first meeting or size up between a prospective franchisee and their future franchisor.  Some brands have retitled this to fit their culture more aptly with names like "Day of Discovery" or "Leap Day".  While this is booked as a day for you to learn more about the brand, you should count on the franchisor also gaining important intel on you that day to gauge whether you're a fit for their concept. 

What exactly happens at Discovery Day? What should you expect?  As restaurant brokers, we have attended many discovery days and here's what you can count on.  

We will ignore the basic advice here which says arrive on time, dress professionally and be prepared.  We’re assuming that anyone who is buying a franchise restaurant already gets the basics.  Depending on the life cycle of the brand and how many territories are available in the U.S., remember that this is a sales day.  The franchise is going to try and show you all the reasons that you should join their brand.

For starters, the agenda will almost always include a very senior executive, in most cases, the brand President, sharing his or her take on the vision for the brand, the culture, where it's been an where's it's going.  Take your cues from his style and if he's open and engaging and invites questions, serve them up.  If not, know that there will be functional areas trotted out in front of you to explain in detail the operations of the brand and some questions may be a better fit for them. 

You will always, always, as a candidate to buy a franchise restaurant, be served the food.  In large discovery day groups, this may be in the form of catering or at a nearby store.  For smaller, more intimate discovery days (held one on one or in small groups), you may go to a nearby "corporate" store or training store for lunch. 

If you are seriously considering buying a franchise restaurant, you should have already been a customer of the brand long before Discovery Day. It is easily a black mark on your candidacy if you show up and ask when they started serving wings when they added the item six months ago.  As a buyer of a franchise restaurant, the restaurant brokers recommend you visit multiple times during different day parts (breakfast, lunch and dinner) depending on the service hours before you ever make it to Discovery Day.  If you're visiting from out of country where they don't have the concept, fly into town a day early and visit the stores in the market multiple times before you show up.  

You can also count on hearing a lot about corporate culture.  This is where you figure out if the brand is a buttoned up corporate entity, a millennial workforce inspired laid back environment, an operations Phenom or some hybrid of these.  Don't overlook the importance of culture in deciding to move forward in buying a franchise restaurant.  If you’re attitude is not the least altruistic, you would not fit with a brand like Firehouse Subs whose foundation and commitment to community are at the forefront of their marketing and public face.  That type of culture disconnect will eventually breed dissatisfaction on one side or the other.  Use the Discovery Day to "discover" if this brand feels right for you. 

Most of the functional areas will also appear before you on Discovery Day.  Plan to meet and greet those from marketing, real estate, supply chain management and more.  That’s your time to ask questions specific to your purchase of the franchise restaurant for sale.  If you’re buying a franchise restaurant resale, evaluate where the brand is now and understand what is needs.  Then target your questions to those needs.  If food costs are too high, ask the supply chain management group how to save on costs. If sales are declining, ask the marketing department what type of support you can expect.  The restaurant brokers encourage you to have some form of questions during this time period.  If you sit back, it could appear to the franchise that you are disinterested or not as passionate about their brand as they are.  

The day will typically end with one on one interviews and this is the portion that is very much like a job interview.  You will be asked your motivations for joining the brand, the level of commitment you are prepared to bring to the table and other items that get to the heart of why you are joining them.

Within two days you will generally be awarded a franchise by the brand. Ultimately, that’s the goal of the Discovery Day, your acceptance of the brand and their approval of you.   Do you have other questions about Discovery Days when you are buying a franchise restaurant?  Call or email us and we'll be happy to respond. 

Topics: buying a restaurant

A Colorado Restaurant Broker's Take on the New Minimum Wage & Tipping Law

Posted by John Jordan on Jan 10, 2017 8:22:00 AM

As a restaurant broker and restaurant owner, I've examined the impact of Amendment 70 (Colorado’s minimum wage ballot initiative) on the industry.  In this restaruant broker's opintion, this is going to severely impact the way restaurants, bars, and food service related businesses run their establishments in the future.  What does the future look like under the new law?  Here's the implementation from 2016 through 2020.

 

 

                              Minimum Wage         Tip Credit            Tipped Wage       % increase     Tipped wage % increase

                                                                                                                                 From 2016                From 2016

2016                          8.31                             3.02                       5.29

 

2017                          9.30                             3.02                       6.28                       11.91%                     18.71%

 

2018                         10.20                            3.02                       7.18                       22.74%                     35.73%

 

2019                         11.10                            3.02                       8.08                       33.57%                      52.74%

 

2020                         12.00                            3.02                       8.98                        44.40%                     69.75%

 A restaurant using 800 tipped minimum wage hours per week is going to spend about $3500 extra dollars per month in 2017, $7000 per month in 2018, $10,000 per month in 2019, and $13,500 per month in 2020.  On an annualized basis, that means an extra $ $41,000 in 2017, $79,000 in 2018, $116,000 in 2019, and $154,000 in 2020 in real labor costs.  

How are restaurants going to cope with this?

From this restaurant broker's opinion and the owner's I have spoken to in the industry, it's clear.

Price Increases for Consumers Leading to a Reduction in Sales

About 95% are first going to raise prices.  What's the economic outcome of that?  Sales will be hurt while the restaurant business is still recovering from the great recession.  Chain restaurants have been seeing massive year over year sales decreases and are closing many locations across the USA.

Staffing Level Changes

Many restaurants are going to cut staffing levels and this will also hurt both the employees and customers. Employees will get fewer hours and customers will get reduced service. 

Change in Tipping

Some full-service restaurants may go to a “no tipping” policy but institute a “service charge” on customer’s checks. This is something I will consider and would welcome feedback from any restaurants that have tried this to offset the increased costs.

Restaurant Expansion

Some locations will close or choose not to expand.  This will hurt both employment and consumer choices.

Technology Replacement of Employees

We have seen some of the fast food chains and casual dining chains going to ordering kiosks and tableside ordering systems and payment systems. This trend will continue. 

As a restaurant broker with more than 30 years of experience in the restaurant industry the math is simple.  The average bottom line profit in a restaurant doing $1,000,000 in sales is around 10% to the bottom line. The Federal Reserve tells you there is no inflation, but that is because they exclude food and energy out of their CPI (Consumer Price Index) projections. So, if you do not eat, drive, or heat your house they are correct that there is no inflation.

Bottom line:  Restaurants have had to deal with increased food and beverage costs over the past 8 years and have been unable to pass the increases on to consumers as the fragile economy made it very difficult to do. Now with the tipped wage set to increase by 44.4% over the next three years it is going to cause a lot of pain to both operators and consumers.

We will see many marginal operators both large chains and smaller independents closing their doors as this is going to take away the profits that they had. It is going to hurt consumers as the restaurants will have no choice but to cut staffing levels, increase prices, and cut costs across the board. This is going to lead to sales decreases and drive many operators out of business.

There are going to be many changes in how a typical restaurant conducts business in the future and we will try and bring some answers as to what we can do to continue to help the restaurant industry in Colorado and the many exceptional operators continue to run high quality, profitable businesses.

                                               

Topics: buying a restaurant