Advice for Buying a Restaurant and Selling a Restaurant

We Sell Restaurants Brokers Achieve Multi-Million Dollar Status with GABB for 2019

Posted by Robin Gagnon on Dec 17, 2019 9:09:18 PM

Twenty-two members of the Georgia Association of Business Brokers (GABB) were named to the 2019 Million Dollar Club and We Sell Restaurants had 100% representation in the Multi-Million Dollar Club for the year. 

The GABB Million Dollar Club Awards is a program that spotlights industry sales professionals recognizing business achievements of professional Business Brokers for successfully closing business acquisition transactions totaling one million dollars or more.

We Sell Restaurants’ brokers were recognized as Multi-Million dollar producers.  In addition, Steve Weinbaum and Robin Gagnon were recognized among the top five Business Brokers for their performance and multi-million dollars in business sales.  Eric Gagnon, President of We Sell Restaurants was also named to the Multi-Million Dollar club and said of the group's achievements,  "This was an outstanding result for the team and in particular, Steve Weinbaum.  His performance was recognized as the third highest in the state."  He added.  "To see every member of the We Sell Restaurants team meet this important milestone of multi-million dollars in sales is very exciting." 

4801 award winner-1STEVE WEINBAUM of We Sell Restaurants is a licensed real estate salesperson in Georgia and Florida and has been a Certified Restaurant Broker for more than four years with the ability to sell restaurants throughout the United States. He graduated from SUNY Albany and has over 30 years of experience in business analysis, marketing, sales, relationship management and contract negotiations. He is a member of the GRA, GABB and BBF. Steve can quickly and accurately review and evaluate financial data. This skill enables him to provide sound valuation feedback and business guidance. His years of experience negotiating complex business-to-business contracts translates to high closing rates. Steve has experience with Casual Dining and Quick Serve Franchise brands, growing both sales and customer engagement. As a Certified Restaurant Broker, Steve is closing an average of two businesses per month and is skilled in complex lease negotiations. His success is highlighted by the personal attention he devotes to each client.

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ROBIN GAGNON CFE, MBA, CBI is the co-founder of We Sell Restaurants, the largest restaurant brokerage firm in the nation and the only franchisor dedicated exclusively to restaurant sales. A Certified Franchise Executive, she is one of the most prolific Restaurant Brokers in the industry and is a specialist in franchise resales. In addition, she has completed study, testing and experience requirements by the International Business Brokers Association to be awarded the credential of Certified Business Intermediary or CBI. Robin is the co-author of Appetite for Acquisition, an award winning book for restaurant buyers. She serves on the Women’s Franchise Committee of the IFA and is past chair of the Women’s Franchise Network Atlanta and current member of its Executive Board. Robin holds an MBA and graduated first in her class where she was named "Outstanding MBA” from her business school.  She is a lifetime emeritus member of the Appalachian State University Business Advisory Council and founding member of the Entrepreneurship Board. Robin is a licensed real estate salesperson in both Georgia and Florida and member of the Business Brokers of Florida and the GABB. She has been named a National Industry Expert by Business Brokerage Press in Franchise Resales. She teaches the only Certified Restaurant Broker training offered nationwide as part of the We Sell Restaurants franchise brand.

4811 Eric G award-1ERIC GAGNON is the founder and President of We Sell Restaurants and wesellrestaurants.com. Eric is an industry expert in restaurant sales and holds the Certified Business Intermediary (CBI) designation from the International Business Brokerage Association (IBBA).  A frequent writer and speaker in the restaurant industry, Eric co-authored Appetite for Acquisition, an award-winning book on buying restaurants. Eric was named a Fellow of the IBBA in 2018 for his outstanding contribution to the business brokerage industry and was a recipient of the Outstanding Producer Award given by the International Business Brokers Association for multiple years. 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 nearly two decades ago. He oversees the development and training of Restaurant Brokers nationwide and has created the industry's only Certified Restaurant Broker coursework and testing program. Mr. Gagnon is a past GABB president, a Lifetime Member of the Million Dollar Club and received the GABB Phoenix Award, presented to a select few who have received the Million Dollar Award for more than a decade.  He is also a member of the Business Brokers of Florida (BBF). Eric is a member of the International Franchise Association (IFA) where he serves as a board member for VetFran, a strategic initiative of the IFA and the Franchise Education and Research Foundation. He currently serves on the Board of Directions for the Southeast Franchise Forum (SEFF). Eric has also been designated a Business Industry Expert by Business Brokerage Press.

The Georgia Association of Business Brokers (GABB) is the state’s only professional organization dedicated to buying and selling businesses and franchises.  The GABB’s website t lists hundreds of businesses and franchises for sale throughout Georgia in a variety of fields, including automotive, business services, child care, cleaning, construction, electronics equipment, fitness, flooring, floral, food, gas stations, landscaping, manufacturing, medical, shipping, restaurants, retail, security, signs, and businesses related to the internet.

We Sell Restaurants is the nation's largest restaurant brokerage firm in the nation, specializing in professional services for buyers and sellers in the restaurant industry. 

Topics: Buying a Restaurant, Restaurant Brokers, Selling a Restaurant

We Sell Restaurants Gives Back in Broward and Palm Beach County

Posted by Eric Gagnon on Dec 3, 2019 6:33:41 AM

The team at We Sell Restaurants in the Palm Beach and Broward County franchises put their hands and hearts to work just before the Thanksgiving holiday to feed those in need.  

Thanksgiving hannah blog-1Hannah Eisenband led a South Florida team of volunteers to raise more than $3,000 for the Palm Beach County Food Pantry, Boca Helping Hands. Boca Helping Hands (BHH) is a community-based 501(c)(3) organization that provides food, medical and financial assistance to meet basic human needs as well as education, job training and guidance to create self-sufficiency.   

Hannah Eisenband began this passion project when she decided to create Thanksgiving Meal Baskets for Boca Helping Hands to distribute to local families in need during this holiday season. When speaking with friends, Hannah decided to expand on her original plan and make it a community event. Hannah and her team planned on assisting ten families in need with food baskets for the Thanksgiving holiday.

Hannah got in touch with dozens of community members and in the course of 24 hours, had not only met the original goal but tripled it. Food was purchased and fifteen baskets of love were prepared. Donations continued to come in and those funds were presented along with the baskets to Boca Helping Hands.

Over $750 was raised in the span of 48 hours. The We Sell Restaurants Charitable Trust matched that amount, creating donations in excess of $1500. An anonymous donor matched that amount creating more than $3,000 in both monetary and food products donated to Boca Helping Hand Food Pantry to help families in need.

We are so proud of the impact that We Sell Restaurants has made to our local community.

Topics: Restaurant Brokers

When the Music Stopped – We Sell Restaurants President on Challenges

Posted by Eric Gagnon on Nov 21, 2019 11:20:48 AM

Many of you may not know that I have experienced three ear surgeries in the last 12 months, all of which have left me fundamentally without hearing.  That creates a pretty large challenge as I LISTEN to people for a living.

I have been without hearing in one ear for my entire life, a fact most of my clients and business associates would have never known.  It didn’t stop me from pursuing an amazing career and learning English as a second language, (French is my primary language). 

How am I coping?  I use the same approach for different phases of this challenge that a buyer, a seller or a broker would use to keep marching forward. I also use a lot of prayers and self-motivation which are two universal tools that everyone should use daily.

Eric Music

Originally I was told by one of the best ear surgeons in the US that I had an 80% chance my hearing would improve with the first surgery and less than a 2% chance I would go deaf.  According to the specialists, my remaining ear issues in my only hearing ear would go away.

Translate this into a buyer’s language, “I’m buying a deal making strong money and proven books,” What can go wrong? Let’s do this!!”

We scheduled the first surgery and went through all the testing and pre-op questions.  In buyer language, we entered into a “purchase agreement” and did the first surgery. I was told to prepare for the worst -- up to three months with no hearing.  Once I woke up, to everyone’s surprise, especially the doctor’s, I could hear immediately!!  LOUD and clear. In a buyer’s world, this would be equivalent to, “Initial due diligence fantastic.  Almost too good to be true.” 

Unfortunately, three weeks later, my hearing started to deteriorate. The doctor thought it was probably an ear infection and said, “Take some meds, it will clear up.”  Two weeks later with no improvement, he says, “come see me.” I drive three hours each way so they can stick needles in my ear, do an audiogram and learn my hearing is rapidly deteriorating.  Then the doctor says, “What about wearing hearing aids?”  Remember, originally I heard perfectly from my single ear with no hearing aids. 

The Broker in me started to kick in and realized this was equivalent to, “Expect some changes in the deal terms.”

Shortly thereafter, once again my hearing deteriorated to the point the hearing aids were useless.  Back to the doctor. Read here: “Buyer is very upset with current condition, but due diligence is over so he can’t walk away from the deal and must find a solution.”

Doctor reveals that scar tissue is growing between the bones which impairs my hearing.  Solution:  Second surgery to laser out scar tissue and rebuild one of the bones. Read here: as a broker we’ve got new movement.  We find out why we have this problem and the seller is willing to fix it.  That’s great news.  Buyer is now happy with the offer and keeps moving forward.

Surgery #2 happens.  I wake up with slight improvement in hearing and even back to my best hearing performance with the hearing aids two weeks later. Buyer thinks, "All problems fixed. Everyone is happy and we accept some compromise - let’s go to closing!”

Wait a minute.  Four weeks later, back to square one. Hearing has dropped beyond hearing aid capacity and declining. The broker in me is thinking, “Maybe this isn’t the right deal for everyone but how do we minimize damages?”

At this point the right thing to do was to walk away from this deal and find a new and better one.  The new deal for me becomes a new doctor at the University of Arkansas Medical Center thousands of miles from home.

His assessment:  Plan A: A new surgery to replace two bones with titanium parts that scar tissue won't cling to.  Success will be hearing fine with hearing aids without any loss over time.  Plan B: if plan A fails, we will do a cochlear implant in 60 to 90 days later and this will work. As a broker, I like the “no surprises” approach.  Always be ahead of the game, with a backup plan. This was music to my non-hearing ears!

Surgery #3 happened on Oct. 3rr.  I spent two weeks with no hearing at all while the ear healed from the surgery and could not accommodate hearing aids.  That was once again, a little scary but different than the first two surgeries where I heard quickly but failed in the long run. 

Ultimately, hearing aids went back in and the results are not good.  The last surgery did not heal the issue.  I have now been fundamentally without hearing for the last year.  The next step is a cochlear implant.  This is a device implanted that goes directly to my brain stem.  I will re-learn “hearing” in this fashion after the surgery and therapy.

During this time, I still maintained a full book of business and worked to the fullest of my abilities. Technology has been helpful; it has advanced to help with hearing impairment. I carry two phones.  My normal iPhone with a blue tooth connection to my hearing aids and an Android that translates voice when I put it near sound (like speakers or a person).  Some people did not even notice I was using a device to hear them.  Others noticed a delay while I ‘read’ their comment before responding. 

It would have been easy to give up and pity myself, but I chose to focus on what I have learned from the experience to make myself better.  Here are some of the benefits I gained. 

At the beginning of this blog I said I LISTEN to people for a living.  I used to do 2-3 things at the time while on the phone.  Now I must read the phone so I cannot do any other task. I am now FULLY listening to the buyers and sellers on the phone and it made me a better broker for it. I also restate their comment or concerns which is also helpful to make sure I understood what they said. My results also reflect that this year.

Every call and every interaction must be meaningful, since listening is very tiring.  I must make sure that this worthy and productive, if it’s not, I politely end the discussion and find a productive activity to engage with.

My focus is more intense.  If you cut out outside noise you will see things much clearer in focus.  This applies when I look at financials as well as when I engage in my hobbies.  I rely a lot more on visuals now than what I hear.

I also became a better writer as I have been sending lengthier and more detailed emails.

My interactions with my family have changed.  Most couples married for nearly twenty years will just toss out a comment from across the room with music or TV in the background. My wife and I must be very close to one another for me to recognize that she is speaking.  Since we run a business together, that means we talk a lot.  We have relied on more communication by touch, where she lets me know she’s speaking.  I can somewhat read her lips and understand what she’s saying or use my phone.  Either way, I’m 100% focused on her and she on me when we are communicating.  This is a great tip for any married couple. 

My professional life has changed.  I cannot sign up for certain functions I would normally attend.  Board meetings are tough because so many people are speaking, and I can’t hear what is being said in a large table environment.  My wife and I often speak or lead round tables at industry functions and that has not been possible without her picking up on most of the questions and bringing me in on the back end. 

This is part of my destiny and my journey.  I am embracing it and making the best of it every single day.  In the best-case scenario, I have just a few more months without the music and things will get better by the first quarter of next year with the fourth and final surgery. 

Either way, I have spent a year without music and gained a new appreciation for communication. 

Topics: Restaurant Brokers

We Sell Restaurants Co-Founder Serves as Panelist for Women’s Franchise Network Event

Posted by Robin Gagnon on Apr 19, 2019 10:25:18 AM

Robin Gagnon, Co-Founder and Chief Marketing Officer for We Sell Restaurants, the nation’s leading Restaurant Brokerage Franchise, was a panelist for the most recent Women’s Franchise Network Event held in Atlanta. 

The topic of the event was “Maximizing your IFA Membership” and included the perspective of a Franchisor (We Sell Restaurants), the IFA (International Franchise Association), a supplier (Naranga) and a franchisee of Mathnasium and the Goddard School.

The International Franchise Association, or IFA, is the top resource for franchise opportunities worldwide.   The group represents excellence in franchising education and advocacy. Their mission, found at franchise.org is to “support your growth, connect our community, and protect our business model.  Advancing every aspect of franchising since 1960, IFA is the collective power of our membership.”

The Women's Franchise Network Atlanta posed the questions, "Are you taking advantage of your IFA membership and do you have a strategy to maximize the opportunity to network and learn from your peers in the industry.?"

The experienced panel was moderated by Ken Douglas of Social Joey, a seasoned professional with over 20 years of experience in human resources and workforce leadership and a track record of talent development and sucessful operations management.

Robin Gagnon, the Co-Founder of We Sell Restaurants and the firm's Chief Marketing Officer represented the franchisor perspective.  One of the most prolific restaurant brokers in the industry and a franchise resale specialist, she holds the Certified Business Intermediary (CBI) designation from the International Business Brokers Association and is an MBA.  She is a writer and speaker that has addressed many groups nationwide.

Leah Shimp Vass represented the IFA point of view.  She serves as Associate Director of Government Relations at the International Franchise Association. She is the director of IFA's political action committee, FranPAC. Prior to working for IFA, she was Assistant Vice President, Government Relations at CIT Group, and spent 15 years on Capitol Hill working for U.S. Senator Chuck Grassley (R-IA). Shimp Vass is a graduate of Drake University.

The franchisee perspective was shared by Indi Nandhra, the co-owner of a Mathnasium franchise with her son. She previously owned two locations of the Goddard School preschool franchise. 

IMG_4046Finally, Faraz Iqbal, the COO of Naranga, represented the Supplier perspective.  A technology executive with 20 plus years of expertise, he’s has managed software application development and client services/professional services initiatives worldwide.  He is responsible for facilitating effective communication bridges between the business, sales and development teams coupled with hands-on experience in designing and developing application tools.

Questions addressed by the group included, “What is the Franchise Action Network (FAN)?  Why is it important for IFA to tell the story of franchising?”  Leah Shrimp Vass shared the importance of the annual event held in September on Capital Hill where franchisees, franchisors and suppliers do face to face meetings with representatives in the House and Senate from their state.  Their stories and direct contact resonate with legislators who are then, more attuned to the mission of overall franchising and its impact in their district.

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The discussion around the annual IFA Convention focused on keynote speaker Gary Vaynerchuk, also know as Gary V and his riveting comments from the stage.  The moderator asked for feedback from the audience and panelist on the most recent convention and the responses were passionate about the keynote speech (available at this link). Robin mentioned that as a Conference Committee Member this year, there was a lot of spirited conversation around bringing Gary V’s style of personality and persuasion to the stage but ultimately, this paid off in one of the most riveting speakers in recent years.

The panel also took questions about leadership opportunities and getting involved on IFA committees.  Each contributed to a discussion of their experiences on IFA committees and the opportunity to participate.  The last discussion of the night centered on professional development opportunities and the CFE program, or Certified Franchise Executive program with the IFA.  With both CFE candidates and those who have completed the program present, there was great sharing of this experience.

The evening wrapped up with those in the Atlanta franchise community leaving with strong impressions on how to maximize their IFA Membership.

Topics: Restaurant Brokers

Attending the IFA Conference

Posted by Steve Weinbaum on Mar 4, 2019 10:35:00 AM

I recently had the privilege and benefit of attending my first IFA conference in Las Vegas this past week.  First and foremost, my sincere congratulations and thanks to everyone at the IFA who were involved in putting together such a first-class event.  The content, guest speakers, vendor-supplier representation, and the round tables were all incredible. Each presentation was headed by passionate and knowledgeable industry leaders in the Franchising arena.

I had some great one-on-one meetings and attended several round table discussions, where the topic dealt specifically with resells and succession planning. The two overwhelming themes that came up throughout were that many franchise organizations had not anticipated the natural evolution of franchisees who were ready to sell their business and they were not prepared, or equipped, to handle them. ifa logo +

A seasoned franchise is accustomed to franchisees exiting, for a variety of reasons, and it has become the natural evolution of the business.  Some Franchisees get into the business and realize, relatively quickly, it’s not right for them.  Others are wildly successful, build significant equity in their business, and reach a point in their lives when where they want to retire and secure that equity they have built by selling their franchise(s).  Other franchisees experience life events that require them to find a new owner for their franchise. Then you have the owners who, for reasons unknown, are not realizing their full potential and decide to cut their losses.  

Regardless of the reason, when a franchisee decides it’s time to sell, It creates a secondary market for existing franchises. This event accounts for somewhere between 4-7%. Though the question remains; What is the best way to address them?

While this may sound a bit self-serving, Business Brokers were their number one “go to.”  Two main reasons for this approach repeatedly surfaced.  The first, was not having the resources and manpower to handle resells. Second, was to keep the Franchisor’s focus on finding new business versus recycling existing business.  Addressing these two “needs” is where Business Brokers are essential.

In the Restaurant space, whether Fast Casual, QSR, Treat, Bar, or Full Service, We Sell Restaurants can provide the resources and client-reach to address these objectives.  The resell buyer looks very different from the new franchisee.  There may be more risk adverse; meaning they want to purchase a business with a history of revenue and cash flow.  They may have different financial access; meaning the resources required to acquire a resell may be less stringent than that of a new build out. 

Our marketing and client focus is targeted at resell buyers. By pointing your existing Franchisees toward Business Brokers, it keeps them separate from new Franchisee acquisition.  Regarding resources, We Sell Restaurants is a Full-Service National Restaurant Brokerage that helps value and market the business, acquire and prequalify interested buyers, secure lending, negotiate lease terms, and work very closely with the Franchisor on approval and onboarding. This allows Franchisor to focus on their core business model.

If you are a Franchisor in the restaurant space looking for assistance in this complex arena, I am happy to help you navigate the somewhat complex waters of the restaurant industry.

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Topics: Restaurant Brokers

International Franchise Convention – We Sell Restaurants Founders Report

Posted by Robin Gagnon on Mar 1, 2019 10:48:04 AM

The doors have closed, and the franchise brands have all headed home.  What did the highlights of the annual convention bring all of those in the industry together this year?  Restaurant Brokers Eric and Robin Gagnon attended from We Sell Restaurants along with Steve Weinbaum from the Atlanta office.

The high point of the opening session had to be the words of Gary Vaynerchuck or “Gary V”, the keynote speaker.  He challenged franchise restaurant brands to see the disruption occurring in the industry and move media dollars out of traditional methods like TV and into digital channels like Facebook and Instagram.  He noted that the attention of the end consumer is shifting and there is an enormous opportunity to leverage dollars.  His advice to the brands – make $1.00 spend like $10.00 instead of spending $10.00 in precious dollars only to have it return $1.00. 

Gary V

For this marketing guru who grew a $3 million dollar wine store and built it to $60 million before launching his own digital media company, it’s all about contextual creative that gets to the heart of the ultimate end user.  In his words, the number way to win – “Build an actual brand” and the volume of creative is imperative. He reminds restaurant franchise owners and all franchisors to have the discipline to create and get in front of the consumer with contextual creative.

What’s the restaurant of the future according to this visionary?  It may be a commissary with no brick and mortar that builds an incredible online brand presence and delivers 100% of its product through services like GrubHub or EZ Cater.  As a franchise restaurant owner, does that strike fear in your heart?  It should as it suggests that just like taxi cabs and car services who never dreamed of Uber and Lyft, a restaurant franchise can be replaced with an online brand. 

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Eric Gagnon, President of We Sell Restaurants, picked up power tools to work at a local school as many brands embraced Franchising Gives Back. The work of this team, at an elementary school in Las Vegas will send children back to school with smiles and renovated playgrounds and classrooms.

Franchising Gives Back is a national commitment by the International Franchise Association to band together in communities across the nation and share with those in need.  

Robin Gagnon is a member of the Women’s Franchise Committee and the sub-committee that produces the Annual Leadership Conference.  This year, Nick Friedman, co-founder of College Hunks Hauling Junk, led the program focused on culture.  As he reminded the audience, it’s not what’s on the walls; it’s what’s in the halls.  He terms a brand’s culture,  the “immune system” of the business.

The strong focus of this brand on core values instills the culture at all levels of the organization.  He also reminded the group of more than 300 that you must balance the “Sesame Street” approach to a fun workplace with the “Wall Street” demands in order to have a result based organization.  In his words, “With no margin; there’s no mission”.  He told franchise restaurant brands to repeat the values often for these to permeate the brand.  Does it work? For College Hunks Hauling Junk, the focus on culture has paid tremendous dividends in building one of Inc Magazine’s Fast Growing Companies.

A legislative update to the Women’s Franchise Committee suggested that the $15 minimum wage is probably going to pass on the House floor though the strong legislative arm of the IFA suggests it will probably fail in the Senate, leaving that bill, like many , at an impasse in today’s political climate.  The impact of this wage law on independent and franchise restaurants where we have seen this implemented has resulted in loss of jobs, cut backs in hours and overall loss in restaurant count.

Robin IFA Robin Gagnon, co-founder of We Sell Restaurants, moderated a panel with Google’s Maresa Freidman and NetSearch’s Mike Myers.  The presentation was titled, “Online Search in a Digital world, will you be left behind or lost online?” Key Takeaways from the session dovetailed with the keynote speaker as the Google team emphasized that an increase in connectivity is dramatically changing search.  The other key takeaway was a reference to today’s newly empowered consumer. 

Google’s advice to the restaurant franchise world and all brands was simple.  Be there, be valuable and be quick.  They estimate there were 8 billion devices connected worldwide in 2017 and by 2020, they expect that number to hit 20 billion. Time spent online in 2019 every single day is estimated to be 6.9 hours. 

Measure every moment was another piece of advice offered by Google.  It’s no longer about the final point before a customer buys but every interaction in a series of touches with your brand that gets them to the point of purchase. 

Eric Gagnon, President and Co-Founder of We Sell Restaurants, moderated a panel that included both franchise restaurants and other national brands.  His session, titled, “Building, Maintaining and Growing Positive Relationships with Your Franchisees,” was also moderated by Andrew Bleiman, Managing Attorney with Marks & Klein, LLP.  The participants ranged from emerging franchise restaurant brands with less than 50 units to powerhouse franchisors with 500 or more stores.  The sharing between these groups made the business roundtable format a win all the way around.

Robin Gagnon moderated a Business Solutions roundtable on the Topic of “How to Make a Good Franchise Great.”  Participants also ranged from entry level players to those with units in the thousands.  Key takeaways around communication included a suggestion to put Franchise Units together on a What’s Up App to share knowledge in a quick hit.  Those who report up to a Franchise Business Consultant with a range of approximately 20 – 30 units can use this tip for instant communication and connection.

 In addition to the great events above, the sessions were packed with restaurant franchise brands and other segments of the industry.  The closing session of IFA saw the installation of Dave Barr as the new incoming IFA President.  The action packed days passed in a blur but strong networking and great exposure to ideas is what the International Franchise Association Conference is all about.  Stay tuned to our blog for an update from Steve Weinbaum, Certified Restaurant Broker who also attended the packed event.

 

Topics: Restaurant Brokers

Why Restaurants Fail - a Restaurant Broker's Perspective

Posted by Robin Gagnon on Apr 12, 2018 9:38:51 AM

As a Restaurant Broker dealing with dozens of franchise resale opportunities every single day, I am often asked why restaurants fail.  Here are the candid and all too real answers about why restaurants fail. They can be summed up in three ways.  

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Reason Number One - "If you build it, they will come" is not a business model, it's a movie. 

Restaurants fail because grown men and women believe that "if you build it, they will come." That single line from the movie Field of Dreams is the number one reason we see those operating great franchise brands failing in the market.  The operator believes it's enough to open the door, put up the sign and sit back and wait for the business to happen.  

They refuse to acknowledge that the business world has expanded far beyond the four walls of the store and now requires the active pursuit of customers.  They do not want to take a hard look at their catering line and decide they have to invest to develop this all important way to add top line sales and ultimately, bottom line profit. They don’t want to acknowledge that people would rather stay home than dine out and fail to sign up for delivery services.  Lastly, they believe that investment in the brand name of the franchise is enough.

Restaurants fail because owners believe that a franchise brand is their lifeline and a guaranteed path to success.  It is not.  The brand is the starting point for developing the business. It's up to the business owner to grasp that fact and grow the business. 

Reason Number Two:  Restaurant Ownership Is a Hands-On Business 

The second reason why restaurants fail is that owners in countless other fields see the business model as one they can operate on an absentee basis.  In most cases, this is just not a viable option.  Many restaurant buyers contact me and insist they can operate while pulling down a full time job or from many miles away or even from out of state. 

A restaurant buyer last month made an offer on a business in Florida while he and his wife lived in Missouri.  He did not reveal, until very late in negotiations with the seller, that he intended to stay in Missouri for two more years.  He seemed incredulous that the franchise brand would not approve him to operate a brand from hundreds of miles away.  His plan was to give the current manager a minority stake in the business and let him keep running it. 

Is a minority stake for managers a good idea?  Absolutely.  This can lock in front line people to contribute their best and stay in place.  It is not, however, a guarantee that manager will not leave, not like the new owner, fall in love with someone moving out of state or continue to run the business well, knowing the owner is thousands of miles away. 

Most franchise brands require an ownership stake in the operations of the business.  They want to see a family member with equity in the business at the helm if you're not running it.  Otherwise, if you want to operate as an absentee owner, get ready to add your business to the list of restaurants that fail.

Reason Number Three:  Failure to Grasp the Basics -- It's the Numbers

The third reason restaurants fail, in this restaurant broker's opinion, is an underlying failure to understand the three key financial variables required to manage for success:  food cost, labor cost and occupancy cost.  These three items drive the lion's share of the monthly profit and loss statement.  Food costs and labor costs have to be closely managed on a day to day basis (refer back to Reason Number Two in why restaurants fail).  Now you see why absentee ownership is a bad idea. 

Food costs mean managing the portion size to exactly what is laid out in the brand requirements.  It also means control over ordering.  Your inventory ages and when it ages, it results in waste.  Control over food costs mean managing what goes out the front door and what ends up in the dumpster at the back door.  This and labor cost, are the single most important variables to control 

In today’s high tech world, failure to exercise control over labor is just inexcusable.  It is very easy to see in advance the number of meals that have to be prepared.  Any POS system is going to tell you what you did for a Tuesday at lunch last year, last week, last month and yesterday.  Absent any unforeseen event like weather, tourist influx or natural disaster, any owner should be able to plan the schedule and labor correctly to maximize results and minimize costs.  For that reason, failure to grasp this basic and control it within acceptable financial reasons contributes, along with food costs into why restaurants fail.

The last large variable in costs are the occupancy costs and this is the rent number.  Once that number is determined, it’s very difficult to change.  Getting the cost right up front and not inflating sales estimates are the only way to keep from getting into an occupancy cost over 10% which starts highly impacting profitability.  There is generally no way to renegotiate a lease mid-stream.  Landlords have you locked in with personal guarantee.  You will have to sell yourself out of this problem by getting the top line sales results up.

Overall, there are many reasons why restaurants fail.  In this restaurant broker’s experience, however, the three above are the main reasons we see otherwise successful opportunities take a turn for the worse.

Looking for franchise resale opportunitities  Visit us online at wesellrestaurants.com or follow the link below to view our listings.

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Topics: Restaurant Brokers

Restaurant Brokers Analyze Top Ten Restaurant Brands

Posted by Robin Gagnon on Mar 21, 2018 9:58:17 AM

The Ten Most Valuable Restaurant Brands Report is Published. The Restaurant Brokers at We Sell Restaurant Review and in some cases, challenge the findings

Brand Finance has released their annual report on the world’s most valuable restaurants brands. The restaurant brokers are sharing their views on the top ten as reported by the group with our own insight. The full report can be downloaded at this link.

Brand Finance, the authors of the report, established their index over twenty years ago, in 1996. They state that their findings “put thousands of the world’s biggest brands to the test every year, evaluating which are the strongest and most valuable.”

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Do you agree with their assessment of the best brands? They view brand strength on a series of intangible measure relative to competitors. The criteria for making the list include metrics important to understand if you’re buying a restaurant. The Brand Value component is made up:

Enterprise Value – the value of the entire enterprise, made up of multiple branded businesses. Multi-unit brands like Yum go to the top of this category.

Branded Business Value – Defined by the group as the “value of a single branded business operating under the subject brand.” This is a key metric if you’re buying an existing franchise for sale like many of those offered by the restaurant brokers.

Brand Contribution – This is defined as the overall uplift in shareholder value that the business derives from owning the brand rather than operating a generic brand. Again, this is the difference between owning an independent restaurant for sale versus an existing franchise for sale unit.

What are the top ten most valuable brands? Here they are ranked in order by Brand Finance.

  1. Starbucks
  2. McDonalds
  3. Subway
  4. KFC
  5. Tim Hortons
  6. Domino’s
  7. Burger King
  8. Pizza Hut
  9. Dunkin Donuts
  10. Chipotle

Do the restaurant brokers agree with these rankings? While we don’t have access to the underlying data points and we do concede that it is a robust methodology. However, these restaurant brokers would challenge a few rankings based on what we are seeing in the industry.

For example, Subway retained the same rank on this list from 2017 to 2018. This is despite a number of issues we are seeing on the streets which include year over year sales declines at the unit level. This is due to increased competitive pressure in the fast casual world. In addition, the franchisee issues and actions taken in 2017, in these restaurant broker’s opinions, should have affected the overall brand measure. For Subway, we disagree with a number three rank, unchanged from the prior year.

For similar reasons, we struggle with the ranking for Chipotle. The chain has been plagued with a series of missteps and shut downs for reasons integral to their entire business model – their “clean” supply chain. For this reason, in a study of a brand where intangibles are part of the measure, we feel this should have moved them out of the top ten instead of having them retain the prior year performance.

Other overall observations from the restaurant brokers on this list include a notable exception of any of the brands pushing a clean eating or healthy lifestyle. Despite all the media push to make us believe that these concepts are winners, the brands on this list are deep fried basics or fat laden comfort food providers like KFC, Tim Hortons and of course, everyone’s guilty pleasure, pizza.

Should it impact your perspective in buying a restaurant? From a restaurant broker’s standpoint, many of these brands do not often come onto the market so this does support the study’s “best of” findings. Outside of Subway, most of these are only available for new development with existing franchises for sale being bought and sold internally among existing franchisees.

The desire to rank restaurant brands is a never ending pursuit, particularly with so many individuals interested in buying a restaurant. The restaurant brokers recommend you heed this advice like any other and weigh it against all other information when buying a restaurant. Whether a brand is “ranked” #2 or #3 by another survey is not a true measure of a single store operating in your market. It is one of the data points to consider along with store performance, location, and your overall customer experience with the brand.

For more information on existing franchise restaurants for sale, visit this link at wesellrestaurants.com

Topics: Restaurant Brokers

Restaurant Brokers Report on the IFA Meeting & Franchise Opportunity 

Posted by Robin Gagnon on Feb 28, 2018 10:51:44 AM

The existing franchise restaurant for sale market continues to grow as the business model shows strength in unit growth, output and employment. As Restaurant Brokers, we focus on this sector due to the strong buyer interest and turnover in existing franchise restaurants for sale.  

The newest data from IFA (International Franchise Association) Economic Outlook Survey confirms the overall health of the franchise market.  What’s fueling the results?  The overall feedback is that current tax reform and regulatory relief coming out of the White House is driving stronger franchise growth.  That has spiked optimism and confidence among franchise businesses.  IHS Economics prepared the findings and the project many of the franchise sector’s 2018 economic contributions.  They anticipate growth in units and employment, increases to the GDP which include the following:

  • Franchise establishments are expected to grow an additional 1.9 percent in 2018 to 759,000.
  • Franchise employment is projected to grow 3.7 percent, continuing to outpace the rest of the economy.
  • The gross domestic product (GDP) of the franchise sector is forecast to exceed U.S. GPD growth and increase by 6.1 percent to $451 billion. The franchise sector will contribute approximately 3 percent of U.S. GDP in nominal dollars. 
  • Franchise business output is expected to increase by 6.2 percent to $757 billion.
  • Franchise Personal Services experienced strong growth over the past year and is expected to rank first in growth of the number of establishments and in employment in 2018. 

Do these numbers ring true to the restaurant brokers?  You bet!  We just returned from the International Franchise Association convention in Phoenix.  Here are some of the key takeaways from this meeting.

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Don Fox, CEO of Firehouse Subs told an audience at the Leadership Development Conference that, “Growth is not an option.”  We agree.  This sage advice for all unit and franchisor operators lets you know that if a brand ceases to grow, it will soon cease to exist.

From the main stage and in breakout sessions, there was renewed excitement about business conditions.  The relaxation of the regulation feeding from D.C. and the pro-business government, coupled with tax cuts had more than one operator excited about the future.

The relationship between a franchisee and franchisor is a symbiotic one.  Neither can grow without the other and both reflect benefit from working together.  It appears to us that many brands are working to realign themselves with their franchisees to make sure this relationship is protected, especially in the face of some ugly franchise disputes that were made public this year like the one with Subway franchisees.

Lastly, we once again saw brands focusing on the use of technology for not only operations and management, but expanding into other portions of the business to provide a superior customer experience.

As we continue our focus on existing franchise restaurants for sale, we’ll keep you posted on this sector, it’s challenges and the overall opportunity.

To see our existing franchise restaurants for sale, visit the link below. 

 

Restaurants for Sale

Topics: Restaurant Brokers

The Restaurant Brokers Reflect on a Year of Giving Back in 2017.

Posted by Robin Gagnon on Jan 3, 2018 12:28:15 PM

1-4319039364397.jpgNothing feels as good as being able to lend a hand to those in need and give back to the causes that we hold near and dear to our hearts. We Sell Restaurants has welcomed 2018 with open arms and are excited to see what this new year brings. We are also taking some time to reflect on how the We Sell Restaurants charitable foundation was able to support causes important to us in 2017.  

In October the Restaurant Brokers rolled up their sleeves and lent their hands to the Atlanta Community Food Bank. Our team sorted and packed food for those less fortunate throughout the Atlanta Metro. The Atlanta Community Food Bank receives donations to the tune of more than 60 million pounds of food per year. In addition to volunteering our man hours, the We Sell Restaurants Charitable Foundation gave $1,500 to this all important cause.

The next organization that we gave to in 2017 gave us so much as well – man’s best friend! Adopt a Golden Atlanta has rescued nearly 4,000 dogs since its inception and is the fourth largest Golden Retriever rescue in the United States. This organization takes in Golden Retrievers and performs any necessary medical procedures and behavior training, and finally adopts these loving dogs out to their forever homes. We contributed $2,500 to Adopt a Golden Atlanta, and the average cost for this organization to rescue and rehome one dog is nearly $2,000! Did we mention that the We Sell Restaurants office dog, Major came from this organization? We couldn’t have asked for a better dog from a better cause!

The Honor Foundation’s focus is to provide professional advancement education for United States Special Operations members and Navy SEALs during their service and after they have served. This is a highly selective organization that the Restaurant Brokers proudly donated $5,000 to during 2017. Not limiting our giving to the armed forces, we also donated to first responders - The Firehouse Subs Public Safety Foundation. This foundation uses a portion of all subs purchased at their locations across the country to provide lifesaving equipment to first responders. Since its inception this foundation has given more than $31 million to support these heroes!

Who doesn’t love a good PB&J?  The Restaurant Brokers surely do, and that’s why our Foundation also send $3500 to the Which Wich Project PB&J last year. Not familiar with this cause? It’s a great concept! Purchase a PB&J and enjoy it yourself or gift it to someone else. For each PB&J you purchase, Which Wich donates one to an organization that provides meals to those less fortunate, and keeps one in a “bank.” Those that are “banked” are then prepared and donated around the world during times of need, such as natural disasters. What an awesome concept!

Not only to the Restaurant Brokers facilitate the buying and selling of franchise restaurants for sale, we also franchise our brand! We are proud members of the International Franchise Association. The International Franchise Association put a huge focus on this past November’s Giving Tuesday, and the Restaurant Brokers didn’t miss a beat! The We Sell Restaurants Charitable Foundation matched gifts on Giving Tuesday that went towards supporting veterans, minorities, and the next generation of franchise partners!

Our corporate headquarters is in beautiful Flagler Beach, Florida. Located centrally between historic St. Augustine and the world-famous Daytona Beach, the six mile stretch of beach provides unmatched views of the Atlantic Ocean. The Restaurant Brokers gave back to their local community with a donation to the Flagler Educational Foundation, a non-profit dedicated to collecting donations and generating awareness to education within the community. This foundation provides a plethora of resources to the community including teacher grants, clothing to students and their families in times of need, and inspiration for young authors to write and publish their creations!

What a great year for giving 2017 was! We can’t wait to see how and where we give back in 2018. Do you have a favorite place to volunteer or cause that you don’t miss donating to each year? Share them with us in the comments, and never stop asking yourself what you can do to make the world and your community a better place through giving!

Topics: Restaurant Brokers