Advice for Buying a Restaurant and Selling a Restaurant

Best Five Tips for Due Diligence When Buying a Restaurant

Posted by Robin Gagnon on May 28, 2019 7:00:25 AM

If you're buying a restaurant for the first time you may be wondering what to do during that all important due diligence period.  It’s critical when buying a restaurant to go into this important time period prepared to get the best information for deciding. 

Here are the best five tips for due diligence that apply to buying a restaurant or any other business.

5 Tips for Due DiligenceBest Tip number one.  Understand the Due Diligence Dates

Before beginning your due diligence period, carefully review the agreement between you and the seller to confirm you understand critical dates and targets.  This includes:

When does due diligence begin?  For some contracts, this is as simple as a single date and reads, “Due Diligence commences on…”  For others, it may be tied to a specific action by the buyer and seller, i.e. Due Diligence commences upon delivery of the items shown on exhibit B of the document. It could be tied to the “effective date” of the contract, which refers to the date on which the last party signs and accepts the final offer making the Contract “bi-lateral” on all terms and conditions.  That could mean that a buyer could offer on the 10th, get countered by the seller on the 12th, have the seller sign on the 14th and then re-counter and finally acceptance by the buyer on the 15th.  That would make the fifteenth the effective date in this scenario.

It is also critical to know when due diligence ends. This leads back to the contract again, where you must know the end date of due diligence and how it is counted.  In some agreements, it’s based on calendar days and states there are “15 calendar days” of due diligence.  For others, the agreement may refer to “business days” which could refer to Monday through Friday depending on the state you are operating in. 

For other agreements, it’s clearly stated that due diligence ends at some stated time i.e. Due Diligence shall end at 5:00 PM on August 10th.  As a buyer, it is critical that you understand the start and end date of any due diligence period. Most sellers and brokers will honor any request to extend due diligence but work to meet the deadlines set by the contract for the best results.

Best Tip Number Two:  Know what you’re requesting and why

It is tempting to simply Google the term, “Due Diligence for buying a business” and then send a 45 item list to the broker.  It is also counterproductive to most deals.  Before you request items going into a due diligence period for buying a restaurant, it’s important to know what you want to confirm and then, pursue the items that make sense.  While you can ask for anything during the due diligence period when buying a restaurant, these are the main items you would want to confirm:

  • Sales. It’s a simple task to confirm sales.  This can be confirmed by requesting POS reports, franchise sales reports or sales tax filings.  In buying a restaurant, you want to confirm the revenue is the amount stated and it’s usually the easiest item to verify in due diligence.
  • Earnings are found on the profit and loss statement and the tax return.  Getting copies of these documents can confirm any earnings claims.
  • Condition of Equipment. Buying a restaurant includes buying equipment that has been in service for some time.  It is a good idea to have the major items inspected by a relevant technician.  It is very important to check the condition of any coolers, freezers and HVAC equipment. For restaurants, the ability to maintain temperatures and make sure expensive condensers and high cost items are operating properly will save you money down the road.

Best Tip Number Three:  Understand your Right to Terminate during Due Diligence and be clear about notice requirements.  A due diligence period, for most contracts, is very open and allows you to terminate an agreement for any reason at all.  Be certain that you understand how to give notice to terminate.  You don’t want to email the seller, only to learn the contract states that written notice (fax or snail mail) is the only acceptable format.  The last thing you want to do is miss a notice requirement and think you terminated when you didn’t. 

Best Tip Number Four:  Know what you should ask for (see tip number two) and what you shouldn’t request. Forget old school requests of the seller to “watch” the business as an employee or customer during a due diligence period.  This is an outdated means to confirm sales left over from a time before electronic records and 80% credit card transactions. 

Don’t request copies of every W2 as payroll records can easily be verified through the payroll service.  You don’t want the liability of 50 social security numbers on your own laptop.  Don’t request accounting records you don’t even understand like cash flow statements or depreciation statements.  You’re signaling to the broker and the seller that you’re a novice since neither are material to a new transaction. 

When buying a restaurant, most sellers and brokers are working hard to make sure you get whatever you’re requesting.  If you request profit and loss statements dating back five years, they will probably attempt to comply.  If you add in thirty other requests, you will unfortunately, spend a lot of time and effort looking at data that is immaterial to a transaction.  Traffic shifts, competitive changes and the business front in general is not a static point in time.

For buyers, it’s a good idea to focus on the same time frame a bank would review for SBA lending.  That includes the two most recent years of tax returns and the most recent YTD profit and loss.  This is the store of the trending you want to understand.  Where were sales two years ago versus now? How are costs being managed?  What about labor lines?  It’s certainly possible to request far too much and end up in analysis paralysis where you simply have too many data points and too much information to easily analyze it.

Best Tip Number Five: Rely on knowledgeable resources.   If you use the services of an accountant, be sure they are someone familiar with the industry.  If your attorney did your estate planning, he’s probably not the right resource for buying a restaurant. Ask your broker for a list of options and interview them by phone to assemble a team to assist in the process.

Overall, the time period for due diligence is one of the most important aspects of any agreement for buying a restaurant.  Understand these important tips to make sure your time is spent wisely, and you have the resources to confirm this important decision.

 

Topics: Buying a Restaurant

Buying a Franchise Restaurant -- Five Things to Know

Posted by Robin Gagnon on May 20, 2019 6:13:25 PM

Trying to decide between buying a franchise restaurant or going it alone?  Here are five things that may influence your decision to start from the ground up or invest in an opportunity backed by a brand.  There are both advantages and disadvantages to buying a franchise restaurant.  Let's review five benefits. 

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The first advantage of buying a franchise restaurant is the brand name.  That concept is going to be well known to others and that alone, can drive customers and traffic versus starting something on your own.

The second advantage of buying a franchise restaurant is the ability to finance it easily.   For most franchise resales, like the ones offered at We Sell Restaurants, the existing cash flow, plus the brand name, make an opportunity easy to finance with just twenty percent down. The loan period of ten years makes the payback possible for the loan while you are making money from day one.

Another advantage of buying a franchise restaurant is the ability to pull from corporate resources.  From marketing to leasing, they have corporate team members with experience to assist you in making decisions. You don’t have to create advertising programs from the ground up as they will have them developed and ready to plug and play in your market.  That’s a serious advantage over a startup concept.

A well-developed supply chain with better negotiated rates is yet another reason to buy a franchise restaurant.  When you start from scratch, you’re a single unit with limited buying power.  Large chains negotiate strongly on behalf of all their members, improving prices and in some cases, even negotiating vendor incentives for all users.

Another overlooked advantage to buying a franchise restaurant in today’s tight labor market is the ease of training.  Applying corporate systems and training will get a new player off the ground quickly and easily.  Developing training on your own is both costly and time consuming. 

All of these reasons support an entrepreneur considering buying a franchise restaurant over a startup.   There are also disadvantages that anyone choosing one over the other should consider.  These include:

Starting a business based on someone else’s model will limit your ability to create, change or overall modify the menu, look or feel of the business.  If you can’t wait to start your business and make a menu change daily, buying a franchise restaurant is not for you.  You will be stifled by the control, required by the brand, to maintain consistent standards nationwide.

Costs can also be a consideration when buying a franchise restaurant.  The initial fee, along with royalty and marketing fees can cut into earnings quickly.  This has to be factored into your business plan.  Will the top line sales make up for the costs associated with each transaction?  Carefully study any Item 19, the financial representations of the brand, before deciding.

Lastly, you’ll have a large investment at the front end when buying a franchise restaurant.  You may believe you can build something of your own less expensively, but often, control over costs is lost in the excitement of build out and before you know it, the budget is blown.

Overall, buying a franchise restaurant is a decision that should be carefully considered with both the pros and cons weighed carefully.  Our inventory of franchise resale opportunities, features stores earning six figures on strong sales in some cases, and and others, where the sellers simply want to move on from the location. 

 

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Topics: Buying a Restaurant

We Sell Restaurants Annual Franchise Conference In Hammock Beach - Fun, Sun & Study

Posted by Robin Gagnon on May 17, 2019 5:13:20 PM

The We Sell Restaurants franchisees are headed home from Hammock Beach Resort, the location of this year’s franchise conference.  The theme, “Step Up Your Game” resonated among the enthusiastic and well-trained group.  As a growing and unique franchise brand, there was a mix of many new faces, along with veterans of the industry. Here are highlights from this year’s convention.

The core values of the We Sell Restaurants brand were a strong focus of discussions.  Each day kicked off with a review of the values including: 

  • We know Every Day is Game Day – We ACT Accordingly
  • We treat each other, customers and internal customers by the Golden Rule
  • We act with Integrity and only make agreements we are willing and able to keep
  • We are the Brand and are passionate about sales results.
  • We Create a Customer Service Experience Worth Sharing
2019 Conference

Recognition of all the new franchisees occurred on day one including Jeff and Tawnie Marcus from Northern Colorado, Dave Whitcomb from Lee and Collier Counties, Florida, Michael Kelly from Long Island New York and Justin Scotto from Charlotte North Carolina and Rock Hill South Carolina.

The top producers for We Sell Restaurants were honored in both the million dollar and multi-million-dollar categories. 

  • Million Dollar club awards went to Bob Steinberger and Chris Gordon from the Denver Colorado office. Dave Duce, Franchise Partner from Austin Texas was also a million-dollar award winner.
  • Multi-Million Dollar awards went to Steve Weinbaum, a corporate broker and Ken Eisenband, Franchise Partner for Palm Beach and Broward County Florida.

The collaboration between the earlier franchisees and newest Certified Restaurant Brokers led to a great experience for all.  Conference attendees were exposed to role playing and communication on “Closing the Deal from Start to Finish” by partners of Atlanta Law Group; Patrick Norris and Ben Stidham.

Results from the We Sell Restaurants marketing programs and promotions took center stage on the first day along with Mystery Shopping results for both our own brokers and competing brands nationwide.

A team building event modeled after Iron Chef was held outdoors at the beachside resort with teams divided into Team Knife, Team Fork and Team Spoon.  The winning team, Team Knife, took home bragging rights plus special advertising upgrades on a national website. The Restaurant Brokers demonstrated their cooking chops with amazing dishes that had to include the special ingredient, octopus.  The finished products were not only beautiful but tasty and chef Ben from Vessel in Flagler Beach Florida and his wife Hailey were judges for the event. 

 

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The We Sell Restaurants new national referral program was in the spotlight on day two along with training on leases and E-2 visas.  Jessi1ca Weiss, attorney at law, shed light on the E-2 visa clients she represents and the potential to expand the national brokerage practice with additional visa clients.  How many employees must a restaurant have to qualify for an E-2 visa?  What is a substantial investment?  We Sell Restaurants is up to date on all the answers. 

Jonathan Neville, partner at Arnall Golden Gregory Attorneys at Law in Atlanta, Georgia presented the aspects of the lease critical to business brokers.  His discussion focused on the elements of the lease that could pull down the value of the restaurant.  He gave pointers on items ranging from release of tenant and entity to the transaction to negotiating deal points when it comes to relocation, acceleration or forced removal clauses. 

The We Sell Restaurants conference would not be complete without a full download of all the improvements to the proprietary platform, the B.O.S.S. or Broker’s Operations and Sales System. Key improvements for the year were reviewed as well as discussion for new improvements for the future.

Overall, between the Iron Chef Event, impressive guest speakers and top producer awards, the franchisees left energized, excited and ready to Step Up their Game.

Sponsors for this year’s convention included:  AmTrust Financial, Bloom Insurance and Atlanta Law Group.  For more information about the We Sell Restaurants franchise, visit wsrfranchise.com online

Topics: Buying a Restaurant

We Sell Restaurants Attends IBBA – Eric Gagnon Honored as Fellow

Posted by Robin Gagnon on May 14, 2019 8:55:11 AM

We Sell Restaurants founders Robin and Eric Gagnon recently returned from the International Business Brokers Association (IBBA) meeting in Orlando Florida. 

The event theme, “The Big Ideas Event:  Embracing Change on Main Street” was a busy few days packed with exhibits, knowledge sharing and recognition from their peers.

For the first time, We Sell Restaurants exhibited on the main floor.  The message to brokers attending the event, was that the Restaurant Brokers are ready, willing and able to handle restaurants for sale where other agents struggle.  For most brokers, failing to specialize in the restaurant for sale arena puts them at a serious disadvantage for making a deal come together.  The reasons are two-fold, either a lack of expertise or because they don’t have a large buyer database

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The We Sell Restaurants message to these brokers is to deliver a successful outcome for their sellers by referring the lead to a specialist.  “You don’t have to be great at selling restaurants, because we are” was the theme of the program.  The We Sell Restaurants referral program was a highlight of the international gathering of business brokers as the message resonated.  The booth was packed with activity. The We Sell Restaurants franchise was also highlighted for the brokers attending the conference, allowing them to sign up to become part of the nation’s most successful restaurant brokerage practice.

Eric Gagnon, President of We Sell Restaurants was honored at the annual meeting with the IBBEricA Fellow award.  The Fellow of the IBBA award was designed to celebrate the contributions of loyal, long-time members of the IBBA. This highly coveted and lifetime award is awarded to members who have their CBI designation and have met or exceeded the established criteria.

In order to be considered for the Fellow of the IBBA award, the individual must have been a member of the IBBA for ten years or longer, hold their CBI designation, be in good standing, and have made significant contributions to the association by serving as a director, committee chairperson, presenter or instructor at a conference, or various other association activities. Eric has been a member of IBBA for more than a decade and has participated in developing training for other brokers, served on committees and presented his knowledge many times.  The IBBA states that a Fellow must “in some way contributed much of their time and energy to serve the association for the betterment of the members.” Eric was also presented with a Top Producer Award for the IBBA for sales exceeding one million dollars.

Eric and Robin Gagnon teamed up for two mastermind sessions, providing their insight and expertise with other brokers on two topics.  Their first session, titled, Super Charge Your Practice with Technology was highly successful.  The two handled questions and presented tips for any broker trying to move administrative tasks to technology so that he or she could focus directly on buyers and sellers.

Their second maSuper Charge Your Practicestermind session, titled, “Reasons You Didn’t Get the Listings” included brand new brokers, seasoned veterans and participants from all parts of the country.  The two provided tips on closing deals and getting the deal signed.  The feedback from the crowd was that this team was delivering strong messages and backing it up with lots of experience.

 

After an action packed few days, the We Sell Restaurants team returned to the corporate headquarters, placed another trophy on the shelf and began handling the new lead referral pipeline.

If you are interested in learning more about We Sell Restaurants, visit our franchise page at wsrfranchise.com.

 

 

Topics: Buying a Restaurant

What You Need to Know About Buying a Restaurant

Posted by Robin Gagnon on May 6, 2019 10:46:00 AM

The value of a business when buying a restaurant can be calculated using the income valuation method.  Make sure your restaurant broker understands and relies upon this approach to valuation if you’re buying a restaurant.  

In the old days of pricing restaurants for sale, it wasn’t uncommon to see an inexperienced restaurant broker attempt to value a business based on sales. Those days are long gone, and your expert restaurant broker should be relying on the industry standard, Income Valuation to set pricing. 

What you need to know about buying a restaurant

This method calculates the total owner benefit derived from the business or Seller’s Discretionary Earnings (SDE).  This approach is the most trustworthy in generating consistent results across varied businesses (from a diner to a pizza restaurant for sale).   

Agents practicing restaurant brokerage for a living should be well informed and knowledgeable about this approach for several reasons.  First, financing sources rely on this method to set values for bank financing.  Verified earnings under the income valuation method and twenty percent down qualify for lending from SBA backed lenders.  For an individual buying a restaurant, using consistency of this method, allows them to manage their risk and gauge the correct offer price.  It also allow you to compare competing opportunities across a common scale.   

The Income Valuation Approach uses a restaurant’s profit and loss statement or P&L plus the tax return to look for all the owner benefit delivered by the business.  In turn, the higher the owner benefit (sometimes call Seller’s Discretionary Earnings or SDE), the more the seller will get for his bar or restaurant for sale. 

The math principle is straight forward and easily learned by those buying a restaurant.  Take net income and add back benefits to the owner (salary, insurance, auto or other) PLUS non-cash expenses like depreciation and amortization PLUS cost of debt service (interest) to get to Seller’s Discretionary Earnings (SDE) or owner benefit. 

It is not uncommon for inexperienced brokers or those buying a restaurant to rely on a store’s “potential.”  There’s nothing technically wrong with this if they are not valuing potential into the pricing.  That would be wrong.  A seller can only be compensated for his direct benefit.  If you are buying a restaurant and see opportunity to run a better operation, reduce food costs, save money on labor or otherwise improve the business to earn more, the benefit belongs to you.  It can’t be factored into the offering price for buying a restaurant. 

The point of calculating benefit is to get a true, not distorted, picture of current operations and current owner benefit to calculate pricing.  Any future potential included in the benefit distorts pricing and overprices the opportunity to the person buying a restaurant.                                                          

Once owner benefit is reached, the broker will use this as a multiplier to calculate the value of the restaurant.  Typically, restaurants for sale trade between 2.5 and 3 times owner benefit.  This large variance is based on any number of things that can positively or negatively affect the range.  If you are buying a restaurant with excellent books and records, it will trade at the higher end of the range.  A hot franchise concept may also trade higher.  Over saturated concepts may also trade at the lower end.

Seasonality can also affect the multiplier with sports bars trading down in summer months and higher in the fall.  You should ask any broker why and how they arrived at the pricing model to be certain they are relying on the best market data and trended information for buying a restaurant.

If a broker cannot share his strategy, comparable pricing and other factors affecting the price, find a better broker.  Pricing, when buying a restaurant, is not a guessing game but a definable model.  The best brokers with financial experience, degrees or holding the Certified Business Intermediary designation from the International Business Broker Association know and understand this methodology.

 Interested in seeing our restaurants for sale or learning more about buying a restaurant?  Visit us online.  

Click here to view all of our listings!

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Topics: Buying a Restaurant

Buying a Restaurant?  Check out the Best Restaurants for Sale April 2019

Posted by Robin Gagnon on May 3, 2019 7:31:53 AM

If you are buying a restaurant, odds are you've checked our website at WeSellRestaurants.com along with thousands of other buyers.  Website traffic increased 40.1% in April of 2019 leading to strong views of our best restaurants for sale.  We have ranked the most clicked on, called on, signed confidentiality agreements and overall most trafficked businesses to come up with our best restaurants for sale in the month of April, 2019.

Leading the pack for those buying a restaurant, was a three-store group of Papa John's Franchises for sale with high volume offered by Eric Gagnon.  The three units, offered in the southeast, shot straight to the top of our list that those buying a restaurant were clicking on, calling on and viewing on our site.

Listing ID:6762 Restaurant Broker Eric Gagnon    
Three Papa John's Franchises for Sale - Over 1.5 Million in Sales!
Lease: 09/01/2022, 12/31/2022, 07/31/2023
Monthly Rent: $1155,2128.34,1985.15,
Inside Sq. Ft. 1100,1100,1100,
Outside Sq. Ft.
Price:$469,000
Eric Gagnon
(404) 800-6704
A second generation restaurant space for lease is a hot commodity for those buying a restaurant.  The term refers to space that previously operated as a restaurant (its first generation) and remains equipped and ready to go for a new location or second generation. The second best restaurant for sale on our list was a unit offered in Austin Texas by Certified Restaurant Broker Dave Duce.
Listing ID:6738 Restaurant Broker Dave Duce    
Impressive 2nd Generation Space for sale in West AUSTIN!
Lease: expires May 2025
Monthly Rent: $20000,
Inside Sq. Ft. 4000,
Outside Sq. Ft. 1000

Price:$99,000

Dave Duce
(512) 773-5272

Another location in Austin Texas making the list of the best restaurants for sale at the very top, was a highly visible location right next to the University of Texas.  Buying a restaurant nearby a college campus gives those entering the industry or expanding their reach a build in client base who loves fast casual and the newest concepts.  We expect this on to sell quickly.
Listing ID:6626 Restaurant Broker Dave Duce    
Highly Visible Restaurant for Sale right next to University of Texas!
Lease: expires August 2020
Monthly Rent: $6750
Inside Sq. Ft. 2000
Outside Sq. Ft. 250

Price:$119,000
City:Austin

Dave Duce
(512) 773-5272

Those buying a restaurant converged on the best concepts that seemed ready for conversion or changeover to a new concept.  A location in Boca Raton Florida offered by Restaurant Broker Ken Eisenband at a very low priced $55,900 made it to the top five our our best restaurants for sale.  With a strong lease and multiple years plus option years remaining, this location is ready to a new concept.
Listing ID:6650 Restaurant Broker Ken Eisenband    
Restaurant for Sale in Boca Raton, Florida - Can Convert to any Concept
Lease: Expires May 31, 2020; Option 5 years
Monthly Rent: $4688.73
Inside Sq. Ft. 1497
Outside Sq. Ft. 0

Price:$55,900
City:Boca Raton

Ken Eisenband
(561) 350-3365

Alpharetta Georgia is a strong marketplace for those buying a restaurant. The northern portion of the thriving Atlanta market, this is home to very strong high income demographics with many families.  This offering by Restaurant Broker Steve Weinbaum garnered enough views, clicks and calls to make it onto the list of the best restaurants for sale in April 2019
Listing ID:6712 Restaurant Broker Steve Weinbaum    
Profitable Mediterranean Restaurant for Sale in Alpharetta, GA
Lease: 2 years remaining thru Feb 2021
Monthly Rent: $3000
Inside Sq. Ft. 1700
Outside Sq. Ft. 600+
Price:$99,000
City:Alpharetta
Steve Weinbaum
(770) 714-4552
Those buying a restaurant seemed strongly focused on developing new concepts based on the results we're seeing this month.  Another lease space, ready for conversion, made it onto the list of best restaurants for sale in April.  This Sunrise Florida listing drove strong activity and interest with an offer already drafted on this location.
Listing ID:6538 Restaurant Broker Ken Eisenband    
Restaurant for Lease in Sunrise, Florida – Publix Anchored Center
Lease: Negotiable
Monthly Rent: $4443
Inside Sq. Ft. 1400
Outside Sq. Ft.
Price:$0
City:Sunrise
Ken Eisenband
(561) 350-3365
Those buying a restaurant seemed to lean toward lower price offerings overall for the month, with listings under $100,000 getting strong views, offers and interest.  This one, offered by Ken Eisenband, Franchise Partner for Broward and Palm Beach county made it onto the top ten with a price point of just $75,000.
Listing ID:6477 Restaurant Broker Ken Eisenband    
Restaurant for Sale in Miramar, FL - after 32 years owner is retiring
Lease: five years plus five year option
Monthly Rent: $3259.52
Inside Sq. Ft. 1300
Outside Sq. Ft.
Price:$75,000
City:Miramar
Ken Eisenband
(561) 350-3365
A really low price offering in Humble Texas created strong clicks, calls and views.  The seller, who has an operator with health problems, has priced this one to go quickly.  Those buying a restaurant could not ask for a better priced opportunity for a franchise restaurant for sale doing more than half a million a year. We're expecting to wrap up an offer soon on this one.
Listing ID:6519 Restaurant Broker Robin Gagnon    
Franchise for Sale is Priced to Sell! Bring Your Offers
Lease: expires 11/30/2023
Monthly Rent: $5582.50
Inside Sq. Ft. 2100
Outside Sq. Ft.
Price:$15,000
City:Humble
Robin Gagnon
(404) 800-6700
Florida dominated the Best Restaurants for sale and our top ten list this month with another fast casual opportunity in Boca Raton.  This one featured below market rent and a right-sized location at only 850 square feet.  It also featured an outside patio, important to many of those buying a restaurant, to expand their footprint and allow for seating in the warm Florida weather.
Listing ID:6665 Restaurant Broker Ken Eisenband    
Fast Casual Restaurant for Sale in Boca Raton has Below Market Rent
Lease: Expires October 31, 2023
Monthly Rent: $1498
Inside Sq. Ft. 850
Outside Sq. Ft. 100
Price:$79,000
City:Boca Raton
Ken Eisenband
(561) 350-3365
Rounding out the best restaurants for sale for the month was a pizza franchise offered in Atlanta Georgia.  This location did not make it through the month without an offer and the partners buying this restaurant are already in training with the brand.  We're working to wrap this one up and transfer ownership quickly.
Listing ID:6613 Restaurant Broker Robin Gagnon    
Pizza Franchise for Sale in Metro Atlanta Market Ready for New Owner
Lease: 10 Years from 2014 with option to renew
Monthly Rent: $2916.66
Inside Sq. Ft. 1400
Outside Sq. Ft.
Price:$125,000
City:Atlanta
Robin Gagnon
(404) 800-6700

Overall, it was an incredibly busy month with website traffic spiking dramatically.  Those buying a restaurant seemed focused on low priced offerings for the month, signaling their ability to convert to new concepts with great ideas.  This included a strong set of views and calls on restaurant space for lease.

Tried and true performers still let the list however, with a three store Papa John's group taking the top spot.  Are you interested in buying a restaurant and looking for listings or resources?  Here's a link to our free guide to buying a restaurant.

Restaurants for Sale Near Me

 

Topics: Buying a Restaurant

Best Tips for Buying a Restaurant

Posted by Robin Gagnon on Apr 17, 2019 6:31:16 AM

Believe you are ready to buy a restaurant?  Here are our best tips and tales of recent restaurant buyers that demonstrate how to get your game on and be truly ready to buy a restaurant.   

Tip One – Prepare in Advance and Make sure your Financial Picture is Ready to Roll

When buying a restaurant, multiple parties will be pulling a credit check.  That’s why you must prepare up front by doing the same thing.  There are two sites you can use for this service that don’t require a credit card:  Credit Karma and Credit Sesame. These are two of the most popular free credit monitoring services. Who will be looking at your credit when buying a restaurant?  Here’s a short list.

Best Tips (1)

If you are buying a restaurant that qualifies for lending, the bank will pull credit to confirm you are qualified to purchase.  For most lenders, this means you have a credit score of 650 or more and no bankruptcy in the past five years.  Even if you don’t meet that criteria, you may still qualify for lending but your Restaurant Broker at We Sell Restaurants needs to know.  If we identify the situation up front, we can develop a strategy to overcome the deficiency.  Knowledge is power.  Pull that credit check first so you know what it says.

When you are buying a franchise restaurant, expect the brand to do both a background check and credit check.  They want to know that you meet your commitments and pay your bills.  After all, they are allowing you access to their name, processes, intellectual property and trademark.  They need and want trustworthy individuals and a credit check is one way to establish those credentials.  

The landlord also wants a look at your credit.  If you are buying a restaurant, the landlord wants to be sure you have met monthly obligations in the past as an indication you will do the same with your rent.  If you have a late payment history but it’s tied to medical issues or identity theft or some other credible reason, be prepared to provide backup for that situation for the landlord to approve you as a tenant.  They may otherwise, deny you the opportunity to lease, or require the seller to stay on the lease as a guarantor.  This is never a good scenario and sellers often push back on requests to guaranty someone else’s payment.

Lastly, any time there is owner financing, the seller may and should require a credit check.  They are acting as the lender in this instance and deserve to know if you pay your bills on time.

This Tip in Action

One of our recent buyers relocated from overseas and had no United States based credit.  Since he began working with We Sell Restaurants months in advance, we advised him to establish a U.S. address as early as possible. From that address, he was able to get secured credit cards which he used and paid, building a credit history.  He also transferred his funds from overseas into U.S. banks, so they were shown available in dollars versus the native currency.  His preparation paid off.  He got through landlord and franchise approval with flying colors.

Tip Two – Dust off that Resume

You’re buying a restaurant, not applying for a job, but you will need to provide either a resume or your background and experience for all the parties listed above.  The lender, franchise, landlord and the seller all want to understand who they are dealing with. What’s your relevant experience for buying a restaurant? It may seem as though you don’t have any but that’s not the case. 

If you have a great resume that shows you are primarily an IT guy who has managed a lot of projects, take the time to rewrite this to focus on your ability to lead teams, hit deadlines and perform projects with long and short term goals.

If you worked in accounting for someone else, that’s a skill that translates to business ownership.  Buying a restaurant and operating it is not the same thing as working for someone else so make sure your resume doesn’t read that way.

Tip Three – Get a Mini Business Plan Ready to Go

We aren’t asking you to write a 50 page volume but a mini business plan consisting of eight to ten pages is a great start with most landlords and lenders.  You will need your resume (see Tip Two) for this so make sure yours is ready. 

A simple business plan for buying a restaurant should consist of the following:

General Description -- Easily picked up from the current operator’s website or a franchise website.

Area Specific Information – Add in the demographics of the surrounding area.  Often the landlord’s own website will give you this information so you’re feeding it back to him and confirming you’ve done your homework.

Background and Experience -Since you followed tip two, above, you are ready to go with this one.

Marketing Plan - No business plan is complete without a marketing plan and it will need to be specific to the restaurant you are buying.  If you are buying a sandwich shop, the business can be improved with more catering orders, so write up your plan to make that happen.   

If you’re buying full service operating dinner only, you can add lunch hours or delivery to increase the sales. If you’re buying any restaurant, you can develop and improve upon their local digital marketing campaigns.  Look at how they are advertising and where it’s being done. What’s their footprint on social media and what will yours be when you improve upon it?

Menu - This one’s easy.  It already exists.  If you’re adding to it, leave it out for now on an existing business unless it’s an entire change of concept.  Lenders and landlords like consistency so introducing a lot of change may hurt, rather than help your chances of approval.  When buying a franchise restaurant, this doesn’t apply as you are restricted from making a change of concept.

That’s it.  Follow those steps along with a cover page, a table of contents and you have a business plan for buying a restaurant.

Fourth Tip – Figure Out Your Partnership Ahead of Time

When buyers come to We Sell Restaurants that aren’t capitalized but want to buy a restaurant, they often mention “partners” or “investors.”  If your investors aren’t ready and funded, don’t begin your search.  You won’t be able to provide all the information requested above because you’ll still be doing work to figure out who owns what and at what percentage.  Work out your partnership and funding before buying a restaurant.

Final Tip – Buy a Restaurant Like you Mean it

We Sell Restaurants routinely works with franchise brands that take a very long time to transfer.  Between the process for approval and training, it can be six months before a deal hits the closing table.  We always warn buyers up front about this timeline.  We recently worked with a buyer who found that plan unacceptable and told us he would commit 100% and force an earlier transfer.  Then he did it.

This buyer was the epitome of the term, “Buy a Restaurant like you Mean it.”  Within 24 hours of signing the contract, he wanted and got a meeting on the calendar with the Area Developer. The next corporate Discovery Day was only three days away and he said, “I can book my flight and be there.” Within 48 hours of lending introduction, he had his approval letter. Less than one week after signing the deal, he was fully approved by the brand and in training.  When someone said, “I need …” his response was, “Here it is” in hours, not days.  He met with the landlord in the first two weeks.  His deal will go on record with this brand for the fastest closing on a transfer because this buyer simply stepped up to the plate and said, “I can get this done.”

When buying a restaurant, there are multiple requests coming from you each day.  If you prepare using our best tips for buying a restaurant and then, “buy a restaurant like you mean it,” you will experience great success in your quest.

 

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Topics: Buying a Restaurant

Invest in a US Business?  Get a Green Card.  Sounds Easy, is it?

Posted by Jessica Weiss, Esq. Immigration Attorney on Apr 12, 2019 11:54:47 AM

Foreigners are still very interested in buying US businesses or creating them from scratch and as a further benefit the foreigners may get a green card in the process.  The EB-5 Investor Immigration category to immigrate to the U.S. has become a way for many foreigners to get that elusive permanent residence status often called a green card. 

JessicaIn 1990 Congress invented a path to permanent residence called EB-5, Employment Based Immigrant category for those individuals that invest a  million dollars in a new US commercial enterprise that will create 10 full time jobs (35 hours a week or more) within a conditional two year period or possibly invest $500,000 in a Targeted Employment area, determined by USCIS and/or the State to be beneficial to have that business in that location of the state. However, as the processing times for EB-5 cases continues to grow, investors will also be looking for other ways to immigrate to the US. 

Is it difficult to get an EB-5 visa?  Some investors just don’t have or don’t want to invest $1 million dollars in a US business to get a green card. That is why Congress also enacted a few exceptions to the criteria mentioned above, one of them is called the Regional Center.  A Regional Center is defined by Immigration as any economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.  This type of Center once approved by Immigration, would require each investor to put in $1 million dollars and indirectly maintain the jobs there and if the location of the Center is in a “targeted employment area”  that is an area that the state has determined is rural and has high unemployment figures then the investment could be as little as $500,000. 

The Regional Centers are very popular as more and more foreigners that are well to do want to reside in the US on a permanent basis and if they have the financial means will put money into a Regional Center and will oversee their investment at some level. Congress was trying to create jobs for Americans and increase capital growth in our Country by creating the Regional Center.   

Sometimes an investor will seize opportunities from businesses that are troubled and Immigration has issued EB-5 visas for “troubled businesses” when the business has been in existence for at least two years and has incurred a net loss during the 12 to 24 months period prior to the priority date on the immigrant investors application.  The loss for this period must be at least 20 percent of the troubled business net worth prior to the loss.  For those Buyers that purchase “troubled businesses” the investor does not have to create 10 new employees but maintain what is there, which can be much easier to do in this day and age.

Once the investor is committed to buying a new commercial enterprise, the issue arises will they properly comply with the conditional status that is initially given for a two-year period.  Many EB-5’s fall apart because they can’t invest the money they have committed to over that two-year period, the money isn’t “at risk” or they can’t hire the 10 full time workers that they promised to.  Immigration Regulations require the money for EB-5 to be “at risk” that is irrevocably committed to the US business and if it isn’t then it is not a true investment for EB-5 purposes.  Investments do not always pan out as they were expected, so the government put in place rules to make sure the money stays in the U.S. on a long term basis in order to qualify for an EB-5.  The long term expectations of the buyer needs to be learned to see if they qualify for an EB-5.

If a prospective buyer does not have $500,000 or even $1,000,000 another way for them to come here, is the E-2 non-immigrant investor visa.   These are a popular way to come to the US while deciding to proceed with a green card application. There are no minimum investments amounts like the EB-5 but the regulations set forth by Immigration just state a, “substantial investment”, in my practice substantial has been at times as little as $100,000 in any type of business, except be wary immigration does not consider purchases of several US homes a business but rather a purchase of a franchise real estate company that sells homes that could be a business.  Once E-2 classification is granted, the applicant can have it as long as they qualify and the regulations set forth by Immigration are in place for this type of visa category, but some individuals will continue to invest in their E-2 business till they have put $1 million of their own personal funds into the US business and turn their E-2 status into EB-5.   

More recently, immigration attorneys have been coming up with creative ways to change E-2 non-immigrant investors to green card holders such as switching them into immigration categories such as: EB-1 extraordinary ability business developer or EB-3 a skilled workers and being hired by another US Employer once their green card is issued. Sometimes the spouse of an E-2 visa holder applies for a green card and once approved the immediate family members will get green cards as dependents. With an experienced immigration attorney, there may be other ways to immigrate to the US than EB-5 but an E-2 non-immigrant visa is still a popular way to start the process of coming to the US as an entrepreneur.

Please feel free to contact Jessica Weiss an Immigration Attorney practicing 20 years in this field. She is with Weiss & Moy, P.C. that has offices in AZ, NV & FL. She can be contacted at her email of jessicaw@weissiplaw.com or 888-689-1862 ext. 204 or 480-994-8888. Free brief phone consults can be provided.   Please see her new website at AttorneyJessicaWeiss.com for clear and concise charts on various visa processes. She also offers free brief phone consults to give you some initial direction.

 

Topics: Buying a Restaurant

Best Restaurants for Sale in March of 2019 - We Sell Restaurants Recaps the Top 10

Posted by Robin Gagnon on Apr 1, 2019 7:08:15 AM

What are the best restaurants for sale in the month of March 2019?  Here's our take on that with the ones that got the most views, clicks, downloads and inquiries from Wesellrestaurants.com

 The best restaurants for sale in the month of March started with a listing priced to move at just $55,000 in Florida and escalated to a price point of $575,000 for a two store group in Atlanta.  That demonstrates the range of the current restaurant buyers in the market.  Some are seeking a simple conversion space while other are looking for high earnings.  Here's each restaurant for sale listing that hit our top ten listings out of more than 300.  These units have something special attracting more buyers than all the rest to be the top 3% of all our restaurants for sale.  That makes them the best restaurants for sale this month!

First on the  list was an asset sale in lovely Boca Raton Floridia that is fully equipped and ready for a new operator.  A right sized location at just 1497 square feet, this on has monthly rent of $4688 in Broward County, a hotbed of residents who love the beaches, the tax rate (0%) and more.  We are still seeking an offer on this one so move quickly. 

Listing ID:6650 Restaurant Broker Ken Eisenband    
Restaurant for Sale in Boca Raton, Florida - Can Convert to any Concept
Lease: Expires May 31, 2020; Option 5 years
Monthly Rent: $4688.73
Inside Sq. Ft. 1497
Outside Sq. Ft. 0

Price:$55,900
City:Boca Raton

Ken Eisenband
(561) 350-3365

Restaurant Broker Dominique Maddox in Atlanta represents two strong franchise locations that are combined in a two-store package with earnings of over $175,000 on the books.  The opportunity for these franchises for sale in the Atlanta Metro area is unmatched for the lifestyle, earnings and consistency.  Approved for SBA lending with just twenty percent down, these winning locations are ready for new ownership.

Listing ID:6647

Restaurant Broker Dominique Maddox    
2-Store Package! Franchises For Sale in Metro Atlanta - National Brand
Lease: Lease Expires July 2019 plus 5 year option |
Monthly Rent: $8586.69
Inside Sq. Ft. 3756
Outside Sq. Ft. 200

Price:$575,000
City:Woodstock | Marietta

Dominique Maddox
(404) 993-4448

Austin Texas is part of the best restaurants for sale this month with a store next to the University of Texas.  Campus locations are ideal for operators with fast casual concepts.  This location is priced to move at $119,000 and can stay the same concept or convert to something new. Contact Dave Duce in Austin Texas for more information on this one. 

Listing ID:6626 Restaurant Broker Dave Duce    
Highly Visible Restaurant for Sale right next to University of Texas!
Lease: expires August 2020
Monthly Rent: $6750
Inside Sq. Ft. 2000
Outside Sq. Ft. 250

Price:$119,000
City:Austin

Dave Duce
(512) 773-5272

 A recently updated restaurant in Atlanta that was priced to blow out at just $39,000 garnered strong activity and is going, going, gone with multiple offers.  Restaurant Broker Steve Weinbaum held a mini open house on this one and walked away with offers above asking price.  This one is no longer available but check with us for other conversion opportunities like this. 
Listing ID:6272 Restaurant Broker Steve Weinbaum    
3000 Square Feet, Beautiful, Recently Updated Restaurant For Sale in Atlanta Georgia
Lease: Remainder of 5 year lease expires May 2021. Can ask Landlord to Extend
Monthly Rent: $7200
Inside Sq. Ft. 2930
Outside Sq. Ft. yes
Price:$39,000
City:Atlanta
Steve Weinbaum
(770) 714-4552
 Lovely Ponte Vedra Beach is nearby St. Augustine on the east coast of Florida.  It has a lovely warm climate, amazing beaches and represents a real lifestyle location.  The pricing on this one means it is a real opportunity to keep the current concept or convert it.  With rock bottom rent of just $2400 per month, this is your place in the sun.  No wonder it's one of our best restaurants for sale this month. 
Listing ID:6175 Restaurant Broker Eric Gagnon    
Restaurant for sale in gorgeous Ponte Vedra Beach - Fully Equipped!
Lease: expires January 2019 with three 3 year extensions available
Monthly Rent: $2400
Inside Sq. Ft. 1100
Outside Sq. Ft.
Price:$99,000
City:Ponte Vedra Beach

Eric Gagnon
(404) 800-6704
 Austin Texas was home to the South by Southwest event in March of 2019 and maybe some of those visitors were ready to stay and buy restaurants!  Two of the best restaurants of the month with the strongest activity were from this market. This second generation location is ready for a new owner and is priced with all equipment.  Small patio as well as a 4,000 square foot location. 
Listing ID:6619 Restaurant Broker Dave Duce    
Restaurant for Sale in Austin, TX - 2nd Gen Space in Great Location!
Lease: expires August 2021
Monthly Rent: $7800
Inside Sq. Ft. 4000
Outside Sq. Ft. 200
Price:$150,000
City:Austin
Dave Duce
(512) 773-5272
 Naples Florida restaurant Broker Dave Whitcomb advertised his listing as "Tired of Snow" and lots of buyers must be ready for the warm Florida climate as it made our best restaurants for the month.  An unbelievable rental rate of less than $2000 per month makes this a winning opportunity for anyone who's ready to do a simple cafe concept or take over this successful operation. 
Listing ID:6631 Restaurant Broker Dave Whitcomb    
Tired of Snow? Why not acquire this charming cafe for sale in Naples?
Lease: 5 years
Monthly Rent: $1913
Inside Sq. Ft. 1200
Outside Sq. Ft. approximately 20-24 seats

Price:$179,000
City:Naples

Dave Whitcomb
(239) 300-5041

 Florida was on a roll with more focus on lease space in Sunrise Florida.  This Publix anchored shopping center is a beautiful location and the store is fully equipped to be nearly any type of concept.  The 1400 square foot location features a high traffic count, thriving and growing trade area and a three- mile radius population of 149,000, with household income of $66,000.  Don't wait on this one!
Listing ID:6538 Restaurant Broker Ken Eisenband    
Restaurant for Lease in Sunrise, Florida – Publix Anchored Center
Lease: Negotiable
Monthly Rent: $4443
Inside Sq. Ft. 1400
Outside Sq. Ft.

Price:$0
City:Surise

Ken Eisenband
(561) 350-3365

 Any time we list an office cafe in a metro area like Atlanta, it hits our list of best restaurants for sale and this one offered by We Sell Restaurants and broker Steve Weinbaum is no exception.  This location was barely on the market before someone snatched it up so it's already gone in less than 90 days on the market.  When you see an office cafe for sale, move quickly as they don't last. 
Listing ID:6542 Restaurant Broker Steve Weinbaum    
Highly Profitable Office Cafe - Atlanta - Limited Hours Earning Six Figures!
Lease: 2+ years remain plus 3-year option to renew
Monthly Rent: $0
Inside Sq. Ft. 2013
Outside Sq. Ft. n/a

Price:$295,000
City:Atlanta

Steve Weinbaum
(770) 714-4552

 Last on the best restaurants for sale list is yet another office building cafe and like the other one, this one's in contract as well.  The benefit of this listing was that it is essentially two stores in one.  The owners are leaving the country and the new buyer will take over as soon as training in complete.  
Listing ID:6389 Restaurant Broker Robin Gagnon    
Two Office Building Cafe for Sale Units! Great Locations in Atlanta Metro.
Lease: Expires 2025
Monthly Rent: $3500
Inside Sq. Ft. 3617
Outside Sq. Ft.
Price:$185,000
City:Atlanta
Robin Gagnon
(404) 800-6700

That's the list of the best restaurants for sale in March of 2019.  Florida dominated with the most on the list this month but Atlanta and Austin made strong showings as well.  If you're seeking a restaurant for sale location, contact the expert brokers at We Sell Restaurants or check out our listings online. 

Click here to view all of our listings!

 

Topics: Buying a Restaurant

10 Signs You’re Ready to Buy a Restaurant

Posted by Robin Gagnon on Mar 19, 2019 7:09:59 AM

If you’re working in a restaurant or sitting at your computer in corporate America, visualizing yourself as a restaurant owner, read on.  This post is for you.

You may intellectually know that buying a restaurant is frightening and full of unknowns. Your friends and relatives may tell you that it will be too much work for not enough reward. Meanwhile, the idea keeps returning to you day after day, as you work for someone else. 

10 SIGNS you are

Are you the person who gets the sense you could do this yourself?  Are you passionate about the restaurant industry but just not happy in your current role?  Did you find yourself pushed into a college career tract that now has you sitting in a cubicle while your mind is churning out ideas for the next great concept?  It could be time for a change in your life and you just may be ready to buy a restaurant.

In working with hundreds of entrepreneurs each year, we see common signs that now is the time to go ahead, take the plunge and buy a restaurant.  If you’re experiencing these signs, it may be time to stop procrastinating and buy that restaurant that’s on your mind.

Sign Number 1:  You’re Passionate about the Industry

Food is more than fuel for the body for you.  Your social media stream is filled with photos of food (and you took most of them).  You’re first to check out the latest restaurant and you have ideas to improve the experience every time you dine.  You have a real excitement for the act of breaking bread that involves all five senses and delivers an experience.  This is sign number one that you are long past being a secret foodie and well on your way to buy a restaurant.

Sign Number 2: You’re going nowhere fast in your current role

Are you feeling unfulfilled in your current role?  Whether it’s filled with prepping someone else’s menu or handling another spreadsheet, life is too short to live unfulfilled.  You keep waiting on the current guy in charge to leave but realistically, where does that leave you?  For some, the 9-5 and reporting to someone else just isn’t for them.  This is a sign you’re ready to head out on your own and potentially buy a restaurant.

Sign Number 3:  You have a vision for something Bigger and want to see it Achieved

Some of the greatest minds of this century believed there was a bigger purpose to their life.  Where would our lives be if Bill Gates was happy hanging out in college instead of dropping out to build what we know today as Microsoft?  On the food level, imagine if Bobby Flay was happy as a chef and never saw the bigger vision of bringing food to the masses and joining a fledging start up network called “TV Food network” in 1993?  Would we all be so smitten by the food industry without him?  

Sign Number 4:  You Aren’t afraid to take Risks

We often speak to college and university students as guest speakers on entrepreneurship.  We always remind them to strike early in their career to try something risky.  Take on the risk before you take on the mortgage and two kids or make sure you’re prepared for both the best and the worst.  Those who are in the market to buy a restaurant have measured the risks and are still ready to go.

Sign Number 5:  You Never Stop Thinking

If your creative juices don’t turn off, you might be a closet entrepreneur and not know it.  Those who buy a restaurant are always trying to figure out the way to do it better, faster, smarter.  If you’re experiencing this sign and living in corporate America, you’re feeling a bit of your soul get stifled each day.  In your own business, you reap the reward for your ideas.

Sign Number 6:  You Can Solve Problems Independently

You might be ready to buy a restaurant if you don’t need a team to resolve a problem.  That’s a sign of independence that broadens your opportunities.  Those ready to strike it alone, know that while a team is important, they can handle a challenge on their own. Group think is not a byproduct of the entrepreneurial spirit.

Sign Number 7:  You are Driven

No one gets you moving. You don’t need three alarm clocks to open the day.  You approach each knowing what must get done and relish in seeing it accomplished.  This sense of self-motivation from within you inspires others.  That’s a sign you may be ready to buy a restaurant instead of working in someone else’s.

Sign Number 8:  You are Organized

Whether your skill set is front of the house or back of the house, you have the skills to organize the day’s work and the week’s calendar.  That’s a critical skill for operating a business and a sign you’re ready to go.

Sign Number 9:  You Know You Can Do It Better

You’ve been in the industry or been in the corporate world long enough to know that you can do better than your current situation.  The wait times are unacceptable, or the hiring practices don’t work.  You have ideas to get it right.

That means you can improve it for yourself and for those on your team.  It’s not egotistical.  It’s a sign you’re ready to buy a restaurant.

Sign Number 10:  You Want to Build a Legacy

You want more for your family than you had growing up or you want to create something your family can participate in and grow together.  That’s a sign that where you are will never get you where you want to be.  You know you must build that legacy on your own and it’s a sign you’re ready to buy a restaurant.

Review your motivations, your yearnings and your thoughts over the past few months.  If you’re exhibiting all these signs, it could be that you are indeed, ready to buy a restaurant.

Want to see our restaurant for sale listings?  Check out this link for hundreds of opportunities waiting on you!

 

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Topics: Buying a Restaurant