Advice for Buying a Restaurant and Selling a Restaurant

Time & Money - The Two Ways Attorneys Kill Deals to Buy Restaurants

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

kill deals.jpgA recent transaction for buying a restaurant reminded me of the two ways that we see deals most frequently fall apart.  Here's a hint -- it's just like all the TV shows where  the criminals stop talking once they "lawyer up".  The restaurant brokers see deals to buy a restaurant hit the same impasse when attorneys enter into the equation.

Time

The first killer technique of attorneys is time.  The time between offer and acceptance is the most critical part of the negotiation.  Attorneys that draw out deals while they draft the perfect contract blow them up

In one recent transaction, a standard purchase contract provided by We Sell Restaurants (which has been subject to lots of scrutiny in the hundreds of deals where it's been used) went into review with a buyer and seller who both had an attorney.  Two months later, the only progress on the deal was that the two attorneys billed their clients over $8000 and nothing was inked.

Here's how the transaction began. 

A very experienced restaurant operator started talking with the restaurant brokers about buying a franchise restaurant in Chicago. Paperwork was signed and he provided us with bank statements showing he had sufficient liquid assets to both qualify for the franchise approval and meet the equity requirement for SBA lending.

For the next six days the restaurant brokers set up meetings between the clients, forwarded financial materials and negotiated the deal terms.  After the first meeting, buyer and seller were happy.  Both parties were in agreement on the price, the closing date and most deal terms.  This restaurant broker prepared the purchase contract and that's when things went sideways. 

The seller decided his attorney needed to review the contract.  This is a very common request and should have been relatively painless, except it wasn't.  The seller's attorney demanded proof of funds and a resume on the buyer.  We sent the materials to the attorney with a caveat that the buyer's bank account information was for his eyes only and not to be forwarded.

At this point, the wheels came off as the attorney began having an email meltdown stating he was not willing to "hide things" from his client. We courteously advised him he wasn't asked to "hide" anything but simply to treat the information securely and not forward via a free email service or otherwise expose the client's private financial data to disclosure.  

Money

The second way that lawyers kill deals is with money and the charges they hit clients for while deals spin sideways. 

Returning to my earlier story, I should have realized this deal was going to remain off the rails based on the initial reaction of the attorney but I'm an optimist -- what can I say?  I worked to move this forward. The attorney for the seller then began to advise his client on a number of matters directly related to the transaction (such as calling the franchise and calling the landlord). Are these typicaly attorney functions?  Absolutely not. What's the cost of that effort?  Roughly $250 - $400 an hour to blow up a deal.  The restaurant brokers would normally do this as part of their process. 

Ultimately, as expected, this deal blew up.  The unfortunate part of the story is that both the buyer and seller were motivated to make this happen but their attorneys, in their efforts to protect them (or if I'm being cynical - charge them) led to total deal killing destruction.  The fee for both parties topped out at over $8000 with no deal ever inked.   The only money made in the transaction was by the law firms. 

Are the restaurant brokers telling you not to use an attorney?  Absolutely not.  Hire an attorney but here are some tips to be sure they don't waste both your time and your money. 

Tips for Using an Attorney

  1. Agree on deal terms before engaging with an attorney.  They aren't negotiators.  They capture deals, they don't make deals. 
  2. Use a business attorney who commmonly closes business transactions.  There are different skills  used by Uncle Louie the lawyer who wrote your will and a business attorney who closes deals for a living.
  3. Don't "over-lawyer."  For most deals under seven figures you do not need the largest (most expensive) law firm in town.  This is basic business law.  They should specialize in transactions however.  You don't want them learning on your dime.  
  4. Where possible, start with a purchase contract from your broker so the lawyer is not building from scratch. 
  5. Don't expand the attorney's reach.  They should not be (in most cases), working with your franchise, your landlord and other third parties.  Your restaurant broker should be.  The only exception to this is a landlord that is dragging his feet on an assignment. 

We are not saying it's not a good idea to use an attorney.  We just recommend you manage them so they don't waste both your time and your money. 

 

Topics: buying a restaurant, selling a restaurant

Ready for your Own Independence?  5 Reasons the Timing is Right to Buy a Business

Posted by Robin Gagnon on Jul 3, 2017 11:10:16 AM

As the nation celebrates Independence Day in America, it could not be a better time to reflect on individual independence and what that means to each of us.  The restaurant brokers come from a long line of entrepreneurs. Breaking with that tradition, we did many years in the corporate world but found that owning a business was always the siren call, not the corner office.  Like many Americans, we wanted the chance to call the shots with our unique brand of independence and know that fail or succeed, the buck stopped here.  That's why we both left large companies to found We Sell Restaurants.  Seventeen years later, we’re thrilled with the decision.

It's uniquely American to celebrate our independence and also to seek control over our own circumstances with something we call our own.  In looking at the history of our country, the Homestead Act of 1862 can be seen as the earliest catalyst to lighting the flames of financial independence and entrepreneurship.  Under the act, any citizen could appy for 160 acres after filing a $10 fee for the land.  Then they had to start living there within 6 months and within five years the land was his for just $1.25 per acre. Then President-elect Abraham Lincoln said the act was necessary, "so that every man should have the means and opportunity of benefiting his condition.”  The idea worked and countless individuals began homesteading across the country, working the land and building their own small businesses capable of feeding, clothing and sheltering their families. 

4th of july.jpg

Here are five reasons we think the timing hasn't been as positive since way back when the Homestead Act brought everyone into land ownership to take matters into your own hands and buy a business.  It seems that 2017 may be the best chance since the Homestead Act of 1862 to follow your instincts and seek your own financial independence.  

Reason 1:  Stock Market Performance

stock market.png

If a picture is worth a thousand words, this picture of the rise in the stock market for the last year should spell out reason number one.  The gains in the market have almost everyone looking at a pretty healthy 401K. Since many business starts are financed through tax free rollover of a 401K plan, taking part of those gains and reinvesting them in your own business may be a smart strategy.   

Who knows how long this trend will last but for now, a stock market that's posting wins and a trend line like this one are reason number to signal the right timing for buying a restaurant opportunity.

Reason 2:  Economic Optimisim Soaring

Americans believe we’re on the right path.  The latest CNBC All American Survey posted the highest rating for America's optimism in survey’s 10-year history.  They found that 30 percent of the public are both optimistic about the economy now and for the future, the second quarter in a row that present-future optimism scored so high. 

  • 44% say wages will rise
  • Homeowner optimism is off the charts – 54% say value of home will rise versus 38% in September
  • Investor optimism – 44% say now is a good time to invest

In the survey prior to the election, 30 percent gave the economy a poor rating–a result largely consistent with those throughout the Obama administration. In the latest results, just 16 percent give the economy a poor rating.

Reason 3:  US Business Confidence Highest in 8 Years

US consumer confidence spiked to a 16-year high in March, according to the Conference Board's monthly survey. 

The headline index jumped to 125.6, the highest since December 2000. Economists had forecast that the index dipped in March to 114.0 from a 15-year high of 114.8, according to Bloomberg. 

Consumers were more positive about the labor market and economic conditions. The share of people who expected jobs to be plentiful also jumped to a 16-year high.

Reason 4:  Lending 

The lenders working with the restaurant brokers are willing, ready and able to fund deals today!  That's a big change over just a few short years ago when any restaurant submitted for lending was a reason for most banks to run and hide.  There is plenty of money out there to fund investments in a business of your own. We are being approached daily to add new lenders to our robust list of resources for funding a restaurant purchase.

Reason 5:  

Morning Consult and the International Franchise Association released a survey a few short days ago.  In that survey 67% of franchise owners and potential buyers are likely or more likely to invest compared to six months ago. By a two to one margin, franchise owners and potential buyers say the economy is improving.  52% of current franchise owners say the economy is improving.  That means there will be more people seeking the business opportunities on the market so don't drag your feet too long.

It's true that the deal of 1862 for 160 acres at $1.25 an acre can't be found today but these five reasons and many great business opportuntiies for sale indicate the timing is right to let freedom ring!  Happy Independence Day!

Visit Our Listings Online!

 

Topics: buying a restaurant

Firehouse Subs Franchises for Sale are Hot Opportunities!  Why Should You Buy One?

Posted by Robin Gagnon on Jun 29, 2017 1:45:38 PM

Have you heard about the HOT Franchise Restaurant Brand -- Firehouse Subs? As a leader in the fast casual sandwich industry, the demand for their uniquely-prepared Specialty Subs is blazing a trail across the country, opening up fast casual food opportunities in new and existing markets.  They currently have over a thousand happy operators in over 44 states.  Every once in a while, someone chooses to retire, a partnership changes or for other reasons, someone decides to sell.  That's when they call the Restaurant Brokers at We Sell Restaurants.

We are excited to represent these franchise opportunties for sale.  In 2017 alone, Firehouse Subs has earned 6 different awards for being a top chain.95461-FH_Subs.jpg

Founded in 1994 in Jacksonville, Florida by former firefighting brothers Robin and Chris Sorensen. Firehouse Subs is famous for serving medium and large specialty subs with premium meats and cheeses steamed hot with generous portions on a toasted sub roll, served “Fully Involved®” with fresh produce and condiments. The concept takes inspiration from the Sorensen family’s decades of combined fire and police service.

In 2005, Chris and Robin Sorensen created the Firehouse Subs Public Safety Foundation® with the mission of providing funding, life-saving equipment and educational opportunities to first-responders and public safety organizations. Since its inception, Firehouse Subs and its customers have donated more than $24 million in 46 states, Puerto Rico and in Canada through Firehouse Subs Public Safety Foundation of Canada.

Firehouse Subs first attempted franchising in 1995. Soon after, the founders decided to pull back on the idea, eventually buying back those franchised locations in the coming years. Instead, they chose to focus on operating company-owned stores only, especially in the Jacksonville market putting franchising on the back burner. In 1998, Firehouse Subs surpassed 10 restaurants, and later that year opened the first location outside of Florida. By 2000 franchising became a topic of conversation once more. This time, the founders decided to take a different approach, using consultants to plan franchise growth. Due to the founders’ frugality and business operations, they were able to set up financing for potential franchisees. The second wave of franchising began in 2001. By 2002, Firehouse Subs was opening its 50th restaurant. A year later in 2003, Firehouse Subs hit another milestone, opening the 100th restaurant. As the 2000s continued, so did Firehouse Subs’ growth. By 2012 the company had opened its 500th restaurant, closing out the year with nearly 600 and in July 2016, Firehouse Subs opened its 1,000th restaurant.

If you are looking for a franchise restaurant brand that believes in both their operators and their communities, check out the listings below from the Restaurant Brokers at We Sell Restaurants.   

 
 
Listing ID:5433 Restaurant Broker Robin Gagnon    
Firehouse Sub Franchise for Sale - 6 Figure Earnings
Lease: 10 years From Jan 2015
Monthly Rent: $4210
Inside Sq. Ft. 2200
Outside Sq. Ft.
Price:$349,500


Robin Gagnon
(404) 800-6701

Listing ID:5509 Restaurant Broker Dominique Maddox    
Firehouse Subs Franchise for Sale in Louisville - High Volume Store!
Lease: Expires March 2019 + 2-5 year options
Monthly Rent: $5200
Inside Sq. Ft. 2000
Outside Sq. Ft.
Price:$175,000
City:Louisville

Dominique Maddox
(404) 993-4448

Listing ID:5434 Restaurant Broker Robin Gagnon    
Firehouse Subs Franchise for Sale is a Hot Opportunity for Owner Operator
Lease: New Lease Term to be Negotiated
Monthly Rent: $8953.02
Inside Sq. Ft. 2400
Outside Sq. Ft.
Price:$150,000


Robin Gagnon
(404) 800-6701

 Looking for a franchise restaurant  brand that makes a difference?  Don't look any further than these franchise opportunities for sale.  In a fast casual industry with plenty of competitors, this one outperforms others by turning visitors into into loyal customers. They know their customers want both quality food and fast service.  They adapt and change based on consumer demand.   This brand has been recognized through the industry with the following awards:  :

·        #1 America’s Favorite Chain for “Top 5 Brands Overall” – Restaurant Business

·        #1 America’s Most Loved Fast Food Restaurant – Business Insider

·        #1 America’s Favorite Sandwich Chain – Market Force

 

 

 

 

Topics: buying a restaurant

A Day in the Life of a Restaurant Broker...What are they doing anyway?

Posted by Robin Gagnon on Jun 15, 2017 9:35:04 AM

50032-Dominique_2011_cropped_for_website_1.jpgHave you ever wondered what your restaurant broker is actually doing every day? Here's a day in the life of Restaurant Broker Dominique Maddox who shared these thoughts.

Dominique recently had a conversation with his wife telling her how mentally tired he was after a tough day as a Certified Restaurant Broker when she returned from work. His wife said, “You sit in front of your computer all day, what did you actually do today?" Here's his log of his actions for the day he was kind enough to share.  

5:00 am – Wake up and put on the 1st pot of coffee. Review my business to-do list for the day and add items

5:30 am-  Go to the gym and go beast mode to get ready for the day

7:30 am – On the road to take pictures of a restaurant I recently listed for sale. I must arrive before the back of the house staff arrives so they will not be suspicious.

8:45 am- After battling through the high-dense Atlanta traffic, I make it to my destination 42 miles from my home.

9:15 am- Pictures are finished and I must conduct a conference call between a buyer and seller to discuss expenses on last year’s profit and loss statement while sitting in my car. 

9:40 am-  While still sitting in my car, I get a call from a seller he is not happy. The seller does not want to sign the 4506-T form which allows the bank to request the sellers tax returns for a buyer to get an SBA Loan based on the business financials. The seller discloses to me they need to amend their tax returns because they filed inaccurate numbers.

9:50 am – Receive call from leasing representative the landlord will not offer my client more Tenant Improvement Money to move forward with the lease. The landlord will only offer 2 free months of rent instead of 3 months.

11:00 am – Arrive back at home office to respond back to missed emails and calls.

11:25 am – Review my HOT Report and touch all my pending deals with updates or reminders

11:45 am – Receive call from a financially qualified candidate. Buyer needs help understanding the price valuation of the restaurant. Buyer does not understand the definition of add-backs for a price valuation.

12:00 pm- Receive email from buyer that request to see a lease space I’m advertising. I call the buyer and they don’t want to show proof of funds, business plan, or menu. They just want to see the location first and then decide if they want to move forward. Let them know landlord wants to see those documents to qualify them as a tenant before showing tghe space.

12:45 pm- Receive an email from a buyer in South Carolina, they want to make an offer on a Franchise Restaurant I have listed in South Carolina. The buyer requests a copy of our Asset Purchase Agreement. I draft the Agreement and send for review.

1:30 pm – Follow up with Dickey’s BBQ Pit to confirm buyer’s Discovery Day date to attend at Dickey’s Headquarters.

2:00 pm – Conference call with Wich Wich, buyer, seller, and Area Representative to discuss transfer checklist

2:30 pm-  Schedule a meeting between buyer and seller at restaurant for Friday

2:45pm- Follow up with Firehouse Subs Area Representative to discuss training day for approved candidate.

3:00 pm – Review an 80-page lease to find out the lease expiration, option renewals, security deposit, CAM charges, and type of restaurants allowed in the shopping center

3:30pm- Follow up with closing attorney on debits and credits for Closing Settlement Statement.

3:45pm- Receive a referral for a Firehouse Subs seller who wants to sell from my current client

4:00pm – Assist buyer with working on bank projections for loan approval. Review business plan and give feedback for improvement.

4:45pm- Follow up with listing leads and search for more leads

5:30pm- Work on Science Project with my 5th grade daughter Amaya

7:00 pm- Draft emails to send out in the morning

7:30 pm- My wife arrives at home!

7:45 pm- Receive text message from seller, asking for an update on buyer activity for their listing.

Dominique writes, "To be an excellent Restaurant Broker you must multi-task and be the quarterback of the deal. Nobody wants to get the deal done more than the Broker.  It can be the difference between feeding your family ground beef or filet mignon.  Yes, most days I’m drained from my daily activities and I’m constantly thinking about items that need to be complete on each deal at night. The satisfaction I get from this career is knowing I help people realize the American Dream of Business Ownership. Tomorrow I will get up and do it all again."

 

Domminique Maddox is a licensed Georgia real estate agent and graduate of Morehouse College which he attended on a football scholarship.  He brings that same competitive spirit and energy to the field of restaurant brokerage. Dominique received a Bachelor of Business Administration in Business Management from Morehouse College.  He has worked in mortgage financing, real estate, business to business sales, and Restaurant Brokerage Sales.

Dominique was named the recipient of the Georgia Association of Business Broker "Rookie of the Year" award from the organization for 2011.Dominique was also elected as a Director to the Georgia Association of Business Brokers for 2012. Dominique has undergone extensive training for restaurant brokerage and has earned the designation as a Certified Restaurant Broker. View his listings online at this link.

 

 

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

Restaurant Trend Spotting - The Reality from the Restaurant Brokers

Posted by Robin Gagnon on Jun 13, 2017 10:46:59 AM

Restaurant Trends – how do they apply to the real world scenario of your restaurant down the street? 

dont follow.jpgTrends can be a game changer for a restaurant operator.   Think about the millennial trend which turned to a tidal wave with some writers claiming this one demographic calls all the shots for restaurant market share.  If you missed an appeal to that audience, some will declare your restaurant dead in the water. On the other hand, you can’t apply every single trend.  If you take the latest Restaurant Trends Reports and start applying everything, in the words of one restaurant broker, “You're probably gonna have a giant mess and very quickly so."

Trend reports are released by marketing companies and by the National Restaurant Association every year.  You can get culinary trends, beverage trends, technology trends and drive it down to specific items like coffee trends.  How do you use it and what’s the right way to apply the knowledge?  Here are the restaurant broker’s thoughts on trend spotting and trend hopping.

Don’t live in the Muddled Middle Ground

There's a phrase in the marketing world called the “muddled middle ground” and that's where you never ever want to be. Why? Because your client can't find you there. If you try to be a little bit of everything, you end up being a whole lot of nothing. That’s the danger of letting a trend eclipse your basic premise.  If you are a vegan concept, it makes absolutely no sense to go with pates and a lot of meat spreads. Even though that’s the hottest trend in menus, it doesn't make any sense for you.

Make sure the Trend Makes Sense for Your Concept

On the other hand, trends can move you in the right direction.  If you're a veggie concept and the trend for vegetables says beets are out and cauliflower is emerging, then make sure high points on your menu no longer speak to beets as the main star when they begin trending down.  Instead, start speaking to cauliflower in your dish creation and then push the envelope into radish.

A good restaurant operator should take the latest trend reports available online and really study it to see where it should impact their concept.  As restaurant brokers, we study all the trends in the industry all the time do we can advise clients on the latest concepts.

Trend Spot but Don’t Trend Hop at the Expense of your Legacy

How do you stay on trend without giving up your identity?  If you've been in business fifty years, stay with your core approach and adapt to stay relevant. That adaptation may be the adoption of technology while keeping your strengths.  If you’re built on the best wings in town, there’s no reason to jack with that recipe but putting Ipads on the table with “build your own sauce” opportunities is a changeup that will appeal to a new and old customer. 

You Don’t Have to Keep Following the New Best Thing

The opposite of the “muddle middle ground” is a radical approach that keeps your customer guessing.  If you change the menu as often as you change your sheets, it can be difficult to build loyalty.  Cuisines come and go.  Not too long ago it was Asian Fusion which gave way to New French and that morphed to Spanish influences, small plates and Tapas.  It’s here today, gone tomorrow. 

There’s an issue of following the trends too tightly or not moving at all.  It’s finding the approach that makes sense to you as a restaurant operator and your cuisine that matters.

Don’t Ignore a Long Term Trend with Sales Consequences

One trend we know for sure is changing is the lunch business. The long lunches where people go out for an hour and half is a shrinking segment. People are now eating more and more at their desk or working from home which means no lunch out at all. 

That changes the dynamics. If you're in the lunch business you must be refreshing your options by expanding to the trends of today.  That include, “meals to go” or carry out, delivery, catering and all the delivery services.  You’re not just making food to order anymore, you’ve having to figure out how to make and stock grab-and-go as well as understand what “travels” well and what doesn’t. It’s not as simple as building a bunch of sandwiches, and putting them in your deli case.

There has to be a plan if both trending and your numbers are telling you lunch is shrinking.  If you used to have 50 covers between 11 and 2, and now it’s down to 11:30 to 1:30 and only 30.  Develop a plan to make up that volume.

If lunch is out but Sunday brunch is in, then take that trend information build the volume back. So, maybe you're never going to get back that long lunch but you can pick up part of it with “to go” and delivery.  Find ways to get the volume back at different other parts of the week.  It will require you to be very targeted, specific and creative.  But that’s why you’re in the business anyway, right?

The bottom line is that trend spotting and trend hopping can be ways to build your restaurant sales.  You just have to decide which trends make sense for your business and pursue with passion.

 Eric and Robin Gagnon, the Restaurants Brokers write on topics of interest to the restaurant industry.  They are the founders of We Sell Restaurants and wesellrestaurants.com.  Their restaurants for sale website can be found online at this link.

Topics: buying a restaurant

Restaurant Sales Slip Nationally and In Atlanta for Q-1 of 2017

Posted by Robin Gagnon on Jun 8, 2017 9:28:46 AM

First quarter restaurants sales in Atlanta turned in a negative trend of -.7%, only slightly better than the national average for one of the few times that the restaurant brokers can remember in tracking history.  That's the findings from Robert Wagner, CPA and president of NetFinancials who monitors and reports the market's sales with his quarterly report.  .

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Wagner measured 118 independent Atlanta restaurants and fully 59% reported negative comparable sales trends.  That's before we even get to quarter two of 2017 which we anticipate to hold further bad news for the market.  The closure of I-85 based on the alleged actions of Basil Eleby and two other people -- all believed by investigators to be homeless, when they torched the bridge led to businesses entirely cut off from traffic, large numbers of never before telecommuting professionals and traffic snarls that made getting to and from your home a main priority - not stopping off for food or drink.  The actions brought much of Atlanta to its knees and the impact on restaurant sales in quarter two with the I-85 closure from March 30 to May 12, (most of second quarter), has yet to be calculated. 

While Atlanta licked it wounds with down trending sales January through March of 2017, things were worse on the national level.  TDn2K’s Black Box Intelligence, a restaurant sales and traffic- tracking company, reported national restaurant Q1 2017 revenues declined by 1.6%. This was the fifth consecutive quarter of negative sales results nationally. Restaurant traffic declined 3.6% nationally in Q1. TDn2K has a massive pulse on restaurant sales.  They publish the The Restaurant Industry Snapshot based on weekly sales from over 26,000 restaurant units and 145 brands, representing $66 billion dollars in annual revenue.

What's Impacting Restaurant Sales for first quarter?  There are several schools of thought but here's what these restaurant brokers think.

1) Competition.  The fast casual segment in particular has been ever expanding on at least a three to four year cycle.  Now it's time for some players to shake out and we're seeing that occur across the country at record levels.  It's not a new trend to see concepts grow and contract.  We have seen ebbs and flows for wholescale parts of the industry over time whether it was a specific type of cuisine (pizza comes to mind) or type of service (full service used to be a thing - before the recession of 2008).  Over time, the strongest will emerge, survive and thrive.

2) Shopping Trends.  A report by a national real estate firm indicated that 9000 Mall locations closed in the first quarter of 2017.  That's not a typo ---  that's four digit closures of retail stores, 9,000 of them in three months.  More online shopping means less trips to the mall.  If customers aren't out shopping on Saturdays and Sundays, does that mean they also aren't eating two or three meals out that day?  Is it easier to order up what you want and eat a sandwich at home?  We think so and ultimately this may drive more business back to restaurants as we are also seeing amazing growth among delivery services. 

3)  Easter Shift.  Back in my retail planning days, a shift in Easter seriously moved dollars around for clothing and footware purchases.  2016 numbers for first quarter included Easter as it fell on March 27th last year, a relatively early Easter.  It was a massive shift in 2017 of two weeks, pushed out to April 16.  At the national level, some pickup may show in the second quarter numbers when this shift is realized though Atlanta will be feeling the effects of I-85 so expect no improvement there.  Customer buying habits are consistent and holiday sales affect the numbers, particularly independent concepts like those cited in the report from Wagner on Atlanta sales.  His group includes only independent operators, not franchises.  .

What does the future hold for restaurant sales and what's an operator to do?  It's the same conclusion we always reach.  The restaurant business is a tough master and those within it face challenges each day.  Never stop improving.  You must be laser focused on sales and attuned to the customer's patterns.  While tough, the restaurant business is a robust and amazing part of the nation's economy and Americans love to eat away from home.  The smart operators will figure it out.  This is one quarter, not a lifetime.

 

 

Topics: buying a restaurant, selling a restaurant

Top 10 Restaurant for Sale Listings in May 2017

Posted by Robin Gagnon on Jun 5, 2017 2:25:43 PM

 What happens in May?  It's time to celebrate Memorial Day and kick off the summer!  Most kids are out of school and the line at the local ice cream or yogurt store seems never ending.  It seems like it's also the month for buying restaurants if this top ten report of restaurants for sale by the restaurant brokers is any indication. 

We rank our top ten list of restaurants for sale based on page views, signed confidentiality agreements and calls to our expert restaurant brokers with requests for more information.

Our number one most trafficked listing for the month is a restaurant for Sale in Fort Lauderdale Florida that's priced to move! The great opportunity offered by restaurant broker Ken Eisenband features low rent for a 1700 square foot fully equipped location.
Listing ID:5228 Restaurant Broker Ken Eisenband    
Restaurant for Sale in Ft. Lauderdale Can Convert to Any Concept
Lease: Expires July 31, 2017 with options to be negotiated
Monthly Rent: $2980
Inside Sq. Ft. 1700
Outside Sq. Ft.
Price:$29,000
City:Fort Lauderdale

Ken Eisenband
(561) 350-3365

Are we seeing double? Nope, that really is another South Florida listing under $30,000. This location is decorated nicely and set up for fast-casual service. If you are ready to get into the restaurant location is place is a steal!  Our buyers were looking at both of these and driving up activity. 

Listing ID:5311 Restaurant Broker Ken Eisenband    
Pizzeria for Sale -- Fast Casual Italian Restaurant in Broward County
Lease: Expires January 31, 2018 plus 2 three year options
Monthly Rent: $4612.78
Inside Sq. Ft. 1716
Outside Sq. Ft.
Price:$29,900
City:Tamarac

Ken Eisenband
(561) 350-3365

Sports Bar are always a home run. Add a location in a happening Marietta, Georgia and you have a grand slam! This location was such a big hit that it is already off the market.

Listing ID:5466 Restaurant Broker Dominique Maddox    
Sports Bar for Sale in Marietta. Convert to your own concept!
Lease: Expires 2022
Monthly Rent: $9200
Inside Sq. Ft. 5300
Outside Sq. Ft.
Price:$69,000
City: Marietta

Dominique Maddox
(404) 993-4448

Six Figure Earnings! That is why the buyers are clicking to find out more about the downtown Atlanta location. Add a great new lease term and this Bar for Sale will not last much longer!  Restaurant Broker Steve Weinbaum has all the details and has been fielding the calls on this bar for sale.

Listing ID:4944 Restaurant Broker Steve Weinbaum    
Profitable Bar for Sale Events Venue! Great Location in Downtown Atlanta - SIX FIGURE EARNINGS
Lease: New 5 year lease with 5 year option
Monthly Rent: $$6162
Inside Sq. Ft. 5300
Outside Sq. Ft. several Hundred
Price:$249,000
City:Atlanta

Steve Weinbaum
(770) 714-4552

On the market for less than 30 days and this HOT listing has made the top 10 list of restaurants for sale.   Located in Roswell, Georgia. Pricing is a factor as this one is well below market.  This location has been open and operating and is ready for a new owner!

Listing ID:5486 Restaurant Broker Dominique Maddox    
Restaurant for Sale in Roswell with low rent. Can Convert to Any Concept
Lease: Expires October 31, 2018 + 3 year option
Monthly Rent: $2800
Inside Sq. Ft. 1800
Outside Sq. Ft.
Price:$59,995
City:Roswell

Dominique Maddox
(404) 993-4448

Summer is the season for easy living and it seems kicking back in a bar is on the mind of a lot of our buyers.  Bars for sale drove strong action ont he month including this one in Austin Texas.  This location has more views than days on the market and will fly off the shelf soon.

Listing ID:5496 Restaurant Broker Dave Duce    
Legacy Bar for Sale Available in Austin Texas. Open 33 years!
Lease: Negotiable
Monthly Rent: $4000
Inside Sq. Ft. 1800
Outside Sq. Ft. 300
Price:$198,000
City:Austin

Dave Duce
(512) 773-5272

South Florida is a happening area for this top 10 list. Adding to the list is another sports bar that has done over $2 million dollar in sales for the year.  The Broward County location is driving clicks, views and calls to the Restaurant Brokers for more information.  Opportunities like this don’t come up all the time so buyers are trying to find out more by visitin gour website.

Listing ID:5510 Restaurant Broker Ken Eisenband    
Sports Bar for Sale in Broward County - Sales in Excess of $2 Million
Lease: Expires October 31, 2018 with 3 five year options
Monthly Rent: $20709
Inside Sq. Ft. 5796
Outside Sq. Ft. 800
Price:$350,000
City:Coconut Creek

Ken Eisenband
(561) 350-3365
Austin Texas took up 20% of the slots on the Top 10 this month with Dave Duce posting two new listings that automatically popped up to the top 5% trafficked listings online.  This wine bar for sale offered as an upscale opportunity was creating strong activity and should have a buyer any day now.
Listing ID:5515 Restaurant Broker Dave Duce    
Wine Bar and Restaurant for Sale is Upscale Austin Opportunity!
Lease: expires January 2020
Monthly Rent: $9750
Inside Sq. Ft. 3000
Outside Sq. Ft. 1000
Price:$230,000
City:Austin

Dave Duce
(512) 773-5272
Colorado was not to be left out of the mix.  Restaurant Broker John Kesterson's listing in Parker had buyer clicking and calling as well.  The signed confidentiality agreements on this one tell us it won't be long until an offer is in play.
Listing ID:5318 Restaurant Broker John Kesterson    
Profitable Full Service Restaurant and Bar for Sale in Parker Colorado!
Lease: Year-to-year. New lease to be negotiated.
Monthly Rent: $3600
Inside Sq. Ft. Approx. 3400
Outside Sq. Ft. Approx. 400
Price:$99,500
City:Parker

John Kesterson
(720) 473-3726

With nearly 300 restaurant and bar for sale listings on the market, hitting the top ten means these were truly special!  The activity generated indicates most will be in the hands of a new owner/operator before long.  Want to check out the hundreds of listings online offered by the restaurant brokers? Check them out at this link.

Visit Our Listings Online!

 

Topics: buying a restaurant, selling a restaurant

Are Independents Winning the Restaurant Battle? Restaurant Brokers Offer 5 Ways to Fight Back

Posted by Robin Gagnon on Jun 1, 2017 11:38:01 AM

One of our favorite writers at Nation's Restaurant News, Jonathan Maze has published a thought provoking article on the five reasons he believes independent restaurants are winning.  His position highlights some recent industry research that shows that independent restaurants, not franchises are expected to gain market share in the coming years, and will grow at a higher rate.  What's driving the growth?  How are the David's of the business (independents) beating the Goliath's (franchises and chains)? 

Go High Touch.jpgIn these restaurant broker's opinion, it comes down to a concept made popular in the 1980's from the best-seller, Megatrends.  The author, John Naisbitt, coined the phrase high tech, high touch.  In high tech, the franchises or chains win every time.  They have the social media departments who can tweet up a storm, keep their photos on Instagram and fill the overall social media feeds of the average consumer dozens of times a day.  On the other hand, the independent restaurant has the upper hand on high touch.  They don't fill your social media feed, just your coffee cup, over and over again without being asked.  They also commit to their communities, not as part of a corporate plan but as part of their personal sense of belonging to the area. Is this paying off with consumers? You bet.

Research from Pentallect Inc., foodservice consulting firm, in conjunction with research partner Critical Mix, weighed the factors in the drive toward independents and their data is shown below.   Independent restaurants are shown in blue on the chart against the grey for chains and independents.   When asked to rate the following aspects as excellent or good, independents win on almost every metric including:  Community Oriented, Is Special, Personalized Service, Shares my Value, Food Quality, Good Service, Innovative Menu, Decor/Atmosphere, Consistent Quality, Value for Money, Menu Variety.  The two are tied on delivery.  Where do the chains win?  It's on use of technology, social media use and convenient location.  Wow, no wonder David is stomping Goliath.  They won on 11 out of 15 High Touch attributes, tied on one and were beaten on just three. Franchises/chains won only on High Tech - they get the win for social media, locations and the use of technology.   

 

chart.jpeg

How do franchises and chains counteract this trend?  Franchises, though locally owned and operated, are still perceived by most of America as being owned by large corporations, instead of local owners.  I recall a recent statistic by the International Franchise Association indicating that a large majority of Americans surveyed believe their hometown Subway is in fact a corporate organization rather than a local business owned by their neighbor down the street.  It seems the big chains have built themselves too successfully into a brand instead of a local store.  That brand messaging does not seem to be connected (at the customer level) with attributes seen by locally owned businesses like "community oriented," "is special," and "shares my values."

In Jonathan’s article, he posits five reasons this trend will continue including: 

  • Millennial buying power and their choice for local over chains
  • Pressure on Profits
  • Television shows that highlight the independent restaurant and chef driven concepts.
  • Delivery
  • Social Media.

We agree on most of these points but believe the dial can be shifted with five ideas: 

  1. Franchises need to act local.  The International Franchise Association (IFA) has launched a website with materials to refute the position that franchises are big business. They are making resources available at a new website atourfranchise.org to share the message that these businesses are owned locally. It's unfair to paint the local owner/operator with the same broad brush as a huge corporate store.  Individual units need to take on individuality at the local level to connect with the community.
  2. Franchisors may need to rein in their National Marketing Spend and apply more at the local level. Just as there will always be a big government (collective approach) versus a small government (local approach) battle, it seems the time is here to redirect funds, take pressure off spending and allow local units to make decisions about ad dollars.
  3. Ownership is for Owners. Too many of the franchise resales we broker are based on operators who went into the business thinking that franchising was all they needed to succeed and if they built it, they (customers) will come. Today’s competitive environment is a fight for market share – share of your street, share of your neighborhood, share of the catering pie and share of delivery.  Owners have to get outside their doors to ask for business. 
  4. Ownership isn’t just for Owners.  Everything starts at the top. The restaurant brokers have written on the topic of training for years but it bears repeating.  A fully engaged and well trained team approach means everyone takes an ownership approach.  Sally at the local restaurant doesn't want to disappoint her Sunday school teacher who owns the business so she hits the tables running and serves up great service.  If you buy a franchise, put the name on the door and believe that's enough to engender loyalty and the computer training is all they need to succeed, you're going to be disappointed. Get out of the back room and onto the floor to make sure the community and staff knows you're a local owner and catch your people in the act of doing their job well.  Within the four doors, act like owners and introduce yourself to your customers.
  5. Get them Young.  Jonathan's right that young people like local but before Millennials are Millennial aged, they are school age and that's a place to target.  Local restaurants sponsor the peewee baseball league, contribute to school events and have walls of photos with their local engagement on the wall.  Franchises need to stop seeking out corporate causes and let the owners grab these kids before they age into Millennials that won't darken your door.  Breed familiarity and love of the brand early.

It seems daunting but it can be done. High touch isn’t just for independents.  The human touch can be integrated into any restaurant.  Years ago in our book, Appetite for Acquisition, we wrote about the reason people enter the restaurant industry saying, “From biblical times until today, nothing on earth has connected people to one another like the act of breaking bread. Your restaurant becomes the catalyst for this human contact, and you share in the experience.”  These survey scores show we were right.  Build your restaurant into a local and high touch community gathering point and the sales will follow.

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Robin Gagnon is co-founder of We Sell Restaurants and a frequent writer about trends in the industry.  She can be found online at her restaurant for sale website or via LinkedIn

Topics: buying a restaurant, selling a restaurant

Restaurant Brokers Designated as Industry Experts by Business Brokerage Press

Posted by Robin Gagnon on May 29, 2017 5:07:55 PM

Restaurant Brokers Eric and Robin Gagnon have been designated by Business Brokerage Press as Industry Experts yet again for 2017.  The Industry Expert program is recognized across the nation for brokers that have in-depth knowledge of a particular type of business.  It's based on a questionnaire distributed by the group that demonstrates specialized skill in an industry and transaction experience.  . 

Industry_Expert_Logo.jpgEric and Robin Gagnon will be included in the Industry Expert section of the Business Reference Guide published by Business Brokerage Press or BBP.  Experts in this program must qualify through demonstration of in-depth knowledge for a particular type of business.  Only those qualified and approved by BBP may be listed as a source with expert knowledge in their prospective industry. 

The Restaurant Brokers, Eric and Robin Gagnon, have both qualified for this honor for multiple years in both Restaurant Sales and Franchise Resales.  The dynamic duo and husband and wife team are the founders of We Sell Restaurants, the nation's largest restaurant brokerage practice and franchise brand.  

ERIC GAGNON is the founder and President of We Sell Restaurants and wesellrestaurants.com.  He is the nation’s leading restaurant broker.  Eric is an industry expert in restaurant sales and valuation.  He is a frequent speaker, writer and co-hosted the nation's only radio show devoted to the restaurant industry for several years.  Eric is co-author of Appetite for Acquisition, an award winning book on restaurant brokerage published in 2012 and named "Best of" by Small Business Book Awards.  Eric began his career in the financial services industry for Bank of America, Bank of New York and big five accounting firm, KPMG before launching the nation’s premiere restaurant brokerage firm and restaurant brokerage franchise.  Eric is member of the International Franchise Association, the Georgia Association of Business Brokers and the Business Brokers of Florida.  In addition, he serves on the Executive Board for the Southeast Franchise Forum and the Membership Committee of the International Business Brokers Association.  

ROBIN GAGNON is the Co-Founder of We Sell Restaurants and the firm's Chief Marketing Officer.  Robin is one of the most prolific restaurant brokers in the industry and is a franchise resale specialist.  She is also a writer and speaker that has addressed the International Business Broker Association, International Franchise Association, Sysco Food Show and multiple colleges and universities. Robin's expert articles appear online and in print across the country. She co-authored Appetite for Acquisition, an award winning book on buying restaurants that was published in 2012 and named "Best of 2012" by Small Business Book Awards. She is the co-host of the long-running radio show "We Sell Restaurants."  Robin is a member of the International Franchise Association and serves on the Women's Franchise Committee.  She is also the Chair of the Women's Franchise Network - Atlanta Chapter.  

These veteran industry experts have defined the term “Restaurant Brokers” with their unmatched experience, knowledge and count of restaurants sold.  Impactful speakers, they have presented workshops and served on multiple panels for organizations nationwide where they share their expertise. They created and developed training for brokers to obtain the credential of Certified Restaurant Broker.

The two have trademarked their brand, “We Sell Restaurants” and are franchising nationwide. They share their knowledge through one of the most extensive training programs available to the industry. Their multi-platform training program leads to the nation’s only Certified Restaurant Broker designation.

For nearly 34 years, Business Brokerage Press has worked to benefit business brokers through valuable publications, services and resources specific to the business brokerage profession.  In addition to their Industry Expert program, they publish source books for the industry including The Complete Guide to Business Brokerage; and the Business Reference Guide, first published in 1991.

The Business Brokerage Press legacy extends to the International Business Brokers Association (IBBA) as the founders were instrumental in launching this international organization.  For over 10 years, Tom and Barbara West of Business Brokerage Press had a hand in running the Association until they turned it over to a management association company so they could focus their time and attention full time on BBP.

For more information about We Sell Restaurants, visit wesellrestaurants.com or for franchising information, visit wsrfranchise.com

  

 

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

Restaurant Sales in College Towns When School is Out - A Report from Raleigh NC

Posted by Katy Sizemore on May 24, 2017 11:58:47 AM

 

For North Carolina, the restaurant industry is a significant force on the economy. The state has 18,169 eating and drinking locations, $18.6 billion projected sales for restaurants in 2017, and 458,400 employed by restaurant jobs equating to 10% of employment in North Carolina. Statistics from the NC Restaurant and Lodging Association.  Today we are looking at summer business in a college town and getting two different viewpoints from local owners.

schools out.jpgTaking a deep dive into one of We Sell Restaurants’ newest franchise locations, the city of oaks and the state’s capital---Raleigh.  Restaurant Broker Katy Sizemore took to the street to ask local owners what happens when the colleges empty out for the summer months.  

Hillsborough Street is an iconic location for Raleigh, North Carolina, and particularly for NC State students. Known for the arts, cultural events, education, recreational facilities, and of course, restaurants. From Mediterranean food to Mexican food, early morning coffee to late night pizza, smoothies to sub sandwiches, this street has it all.

However, what is it that keeps the restaurants on Hillsborough Street thriving? With summer rolling around we wanted to know how the eateries and hot spots stay afloat during the hot months---when the prime audience of these restaurants are off abroad, interning, or home for the summer.  

East Village Grill, a sports bar on the corner of Hillsborough Street and Dixie Trail has become not only a happening spot for students, but a nostalgic dining experience for customers that have been eating there over the past 20 years. After speaking to the staff, we got an insight to what it’s like being a restaurant within walking distance from classrooms, dormitories, apartments, and the DH Hill Library.

East Village Grill staff explains that the restaurant has a drop off in sales for about a week when school lets out for summer. However, the hometown here restaurant and bar is not hurt by the let out for summer.  They go on to explain that Raleigh is not just a college town. The sports bar has plenty of regulars to keep their business going and coming from the neighborhoods surrounding Hillsborough Street. Their business caters to people ages 7-90.

The university hosts tons of summer camps, offsetting the loss of traffic from students. East Village staff also says that plenty of people who are Raleigh natives return home for summer from schools elsewhere and this also adds to their business. Closing the interview, the said that East Village has been here for so long that it has “become kind of a nostalgic place to come here and eat.” He says that people who ate here when they were once students at NC State come back to bring their kids.

There is no doubt that the college students enjoy the food, the fun, the karaoke nights, and the trivia and that NC State students make up a large portion of their business. However, Raleigh locals tend to love East Village just the same-a benefit of owning a restaurant next to a college yet in a town that may not only be considered a “college town.”

For Owner of Global Village Organic Coffee, Greg Ritchey, circumstances seem a bit different. He noted that at the start of summer, the student population in the area drops by 70% and business tends to follow. He discussed that the mass majority of his business does come from the NC State Students. The challenge, said Ritchey, is convincing people that aren’t associated with the university to want to have anything to do with Hillsborough Street. He was happy to say that he is fortunate enough “to have a small core of neighbors who enjoy rubbing elbows with students, faculty, and staff.”

On a positive note and offsetting the fluctuation of student traffic during the summer, some of his part time student workers may leave for the summer to go home or elsewhere. It also balances out for other workers during the summer to be able to go on vacation. All in all, Ritchey loves being an owner of a coffee café on Hillsborough Street. He notes that the environment of Hillsborough Street is a wonderful environment and is fortunate to get business from their international students. He described Global Village Organic Coffee as a good melting pot.

While business may come and go for some, it is a certain that the iconic main drag of the North Carolina State University college campus, in Raleigh Hillsborough Street, brings many people for different reasons.  Being nestled into the college campus, individual neighborhoods of Raleigh residents, and just a jump off the 440 beltline, people make this their destination for food, drinks and fun!

 

 

Topics: buying a restaurant, selling a restaurant