Advice for Buying a Restaurant and Selling a Restaurant

Recently Sold Howard's Famous Corned Beef and Deli

Posted by Robin Gagnon on Jul 10, 2019 12:55:22 PM

We Sell Restaurants closes on another restaurant for sale transaction; the sale of the Howard's Famous Corned Beef and Deli in Boca Raton, Florida

We Sell Restaurants is pleased to announce the sale of Howard's Famous Corned Beef and Deli located at 3571 N. Federal Highway in Boca Raton, Florida. Sal Angrisani of Greenacers, Florida acquired the company from Howard Rich.  The transaction was handled by Ken Eisenband, Franchise Partner with We Sell Restaurants for Palm Beach and Broward Counties.  The location was sold after just 122 days on market. 

Howard's Famous Corned Beef and Deli is an outstanding location that’s been described as one of the most authentic delis in Boca Raton, Florida. The concept features signature corned beef that is cooked in-house as well as smoked salmon. They offer half pound sandwiches with their daily fresh breads. Howard's Famous Corned Beef and Deli also offers catering service and onsite beer and wine sales.

 

The seller, Howard Rich, said of his experience with Ken Eisenband, “I listed my restaurant for sale with Ken Eisenband and We Sell Restaurants. The process was very easy, and he brought in many prospects. Once we were in contract for sale, Ken was very organized and guided me through the entire process. I would definitely recommend Ken and We Sell Restaurants to anyone looking to sell their restaurant.”

Eric Gagnon, President of We Sell Restaurants said of the transaction, “Ken is an excellent Franchise Partner and one of the strongest players in the competitive business for sale marketplace in South Florida.  He is a consistent top producer for the brand and the state with excellent feedback from his clients.”

Ken Eisenband

Ken Eisenband is the multi-unit Franchise Partner for Broward County and Palm Beach County Florida, the southern part of the Sunshine state. Ken leads two offices for We Sell Restaurants with distinction and directs a team of Restaurant Brokers as a multi-unit owner. Ken is a member of the Business Brokers of Florida Association where for two consecutive years (2015 and 2016) he received the prestigious Dealmaker Award as one of the top 5 transaction agents in the state of Florida as well as receiving the Million Dollar Club award.

Ken graduated with Honors from The School of Hospitality at Michigan State University in 1983 and has thirty years of experience in the restaurant industry.  In 1996 Ken joined Ruby Tuesday’s finance team as an analyst working closely with the Real Estate department and Vice President of Operations on site selection and feasibility studies. Ken can be reached by phone at (561)-350-3365 or by email – ken@wesellrestaurants.com. His listings can be found online at wesellrestaurants.com.

We Sell Restaurants is the nation’s largest restaurant brokerage firm, specializing in restaurants for sale, restaurants for lease and franchise restaurant resales.  Found online at https://www.wesellrestaurants.com, We Sell Restaurants operates in 45 states nationwide assisting those buying or selling a restaurant.   

 

 

Topics: Selling a Restaurant

Attention Restaurant Sellers.  Don’t Sign the Listing Until You Mystery Shop the Broker.

Posted by Robin Gagnon on Jul 6, 2019 11:56:16 AM

Two years ago, We Sell Restaurants embarked on a journey to confirm that our customer service standards were being met.  We achieved this through Mystery Shopping our Restaurant Brokers. We now highly encourage any restaurant seller to do the same.  Here’s why.

Quarterly, our restaurant brokers are shopped by “secret” buyers.  They never know which buyer inquiry it is, and they never know how they are chosen. They simply receive one of many inquiries on a restaurant for sale. Our corporate standard for follow up is that each buyer will be “touched” three times within the first three business days.  Why three times?  It shows genuine interest without putting undue pressure on the customer.  If the first message or contact is ignored, it lets the restaurant buyer know you will be professionally persistent without being annoying. 

Dont Sign - Until you SHOP

What’s a touch?  The first, most critical touch is by phone.  There are auto email responses on buyer inquiries, so we penalize the scores of brokers that email the buyer.  If a buyer has inquired through a national website, odds are any broker will have an automated response that says something like, “Thank you for inquiring on my restaurant for sale….”  In addition, the online listing site will also send an automated response..

Imagine that a buyer inquires on three listings.  They will easily get a total of six auto response emails (three from the site and three from the broker), without having spoken to anyone. Buyers are getting inundated with email but are not receiving a personal touch in the form of a phone call and actual discussion with a broker.   

We hired a research firm to develop the scoring mechanism.  An email outreach results in a negative score.  Failure to achieve three touches results in a negative score.  If the outreach occurs over six days instead of three business days, full points cannot be achieved.    

Overall, it’s simple.  Each broker is held to a standard for buyer contact by phone three times within the first three business days of their inquiry.  We compare each office and each broker to others as well as their last quarterly “shop.”  Lastly, we compare the income of the brokers with the highest Mystery Shopping scores to the income of restaurant brokers with the lowest scores.  What we found got their attention.  The brokers with the highest Mystery Shopping scores had the highest income and most sales.  Every. Single. Time.  The brokers with the lowest Mystery shopping scores correlated directly to the lowest income.  Every. Single. Time. 

What does this mean?  Restaurant brokers is a full contact sport.  You must touch and communicate with buyers in order to sell a listing. When we figure out how to sell restaurants with total automation and through email, then brokers are no longer needed.

So why must Restaurant Sellers perform this exercise for themselves?  After a year of quarterly shops, we decided to shop our competitors in year two.  That’s right.  In every single market, nationwide, we knew our performance, but what about the person we’re competing with for the listing.  What did we find? 

Brokers have forgotten to use the telephone.  They don’t realize it has a function other than to send and receive email.  In markets nationwide, in dozens of mystery shopping scenarios with competitors, our “buyers” did not receive one single phone call from other brokers. It is almost unbelievable, but the results are clear and scientific.  We gave them an email address, a phone number that rang to an area code in their market and an inquiry.  We did not get a single response outside of email. 

I recently sat through a software presentation built for business brokers and the entire focus was to build a chain of emails to respond to the buyer.  That’s fine for marketing and brand recognition but for sales, a personal phone call is still required. 

If another broker offers to sell your business for less, consider what that means.  If they do not call buyers and try to put deals together, it doesn’t matter how much they market or what else they do.  Emails do not sell restaurants.  Brokers do.  Don’t sign my listing agreement or anyone else’s until you make a buyer inquiry and see what happens.

When I call you three times in three days, I deserve the listing. 

Robin Blog Update

Topics: Selling a Restaurant

5 Deadly Mistakes to Avoid in Selling Your Restaurant

Posted by Robin Gagnon on Jun 18, 2019 8:55:00 AM

Selling your restaurant is not easy.  Here are five deadly mistakes to avoid for greater success.  We Sell Restaurants has been selling restaurants for twenty years.  Our best advice follows.

5 deadly mistakes

Deadly Mistake 1:  Choosing a Broker based on the cheapest rate

It’s human nature to look for the most cost effective means to accomplish anything.  That may mean seeking a low cost provider when selling your restaurant.  Why is this a mistake?  The person who is charging the lease amount of money often has the lowest investment in marketing, the least number of buyers in their database and the lowest potential for selling your restaurant.  You would not engage with a POS provider who gave you a 1% lower rate if in fact, your credit card machine wouldn’t operate during peak hours.  Why would you engage with a business broker based on the lowest cost?

The other issues with selling your restaurant with the cheapest resource is that you may be dealing with a novice in the in industry.  There are many costs that come into play when selling your restaurant. Many of these can easily cause items to “leak” from the cash you take away from the closing table.  Negotiating the security deposit which landlords are notoriously slow to hand back is one element.  If your broker does not secure your interest in this property up front, you could potentially save $4,000 in commission and give up $7,000 in security deposit.  The same is true for inventory or cash on hand in the safe or tills.  Those items must be negotiated and the “newbie” who does it for less may simply not negotiate the devil in the details that adds up to thousands of dollars in lost cash for you on the settlement statement.

One of the costliest mistakes that someone who is the “cheapest” may make on your behalf is simply negotiating a weak letter of intent or LOI without the proper structure of a full Asset Purchase Agreement.  This not only leads to the issues cited above with loss to the seller of reimbursable expenses but often leads to a seller engaging with an attorney which can result in thousands of dollars in fees before a deal is even done.  The adage to avoid being “penny wise and pound foolish” comes into play when selling your restaurant.  The “cheap” choice can be very costly.

Deadly Mistake 2:  Pricing above market

The second costly mistake for sellers is going out above the recommended pricing level.  It seems harmless as you simply list “higher” and see what comes in the door.  Today’s consumers for buying a restaurant are more informed, have great financial skills and are savvier than ever before.  If the restaurant for sale is priced above market, you’ll lose countless days while it garners no interest before you adjust the pricing to the reasonable level.

Deadly Mistake 3: Taking Your eye off the Ball

A third deadly mistake when selling your restaurant is assuming that the buyer will pick up the slack and taking your eye off the ball. There’s never a more important time to stay fully engaged in the business and make sure it’s running at its full potential.

Buyers won’t purchase the future potential.  They are purchasing the current performance.  Be careful that you don’t become complacent or start generating sales drops once you’re listed, since after all, you’re out the door before long.  When selling your restaurant, the bank, the buyer and the broker are looking for comparable store sales to stay at or above last year.  Failing to do so is a deadly mistake that will impact your eventual selling price.

Deadly Mistake 4:  Saying “no” to a deal

This is perhaps the worst of the deadliest mistakes when selling your restaurant.  There are always three options when presented with an offer.  Yes, is one option and it’s generally not the first response.  No is the second option which is a deadly mistake.  The last option is the appropriate one – a counter.  When a buyer is engaged enough to make an offer, no matter what the offer, it’s time to swallow your pride and come back with a counteroffer.  The most important part of the negotiation is to keep the would be buyer engaged.  A flat out “no” leads to a buyer that must then, negotiate against himself and most will simply bow out.

Sellers that refuse to counter and simply respond “no” are acting out of emotion.  These are the same sellers that return to We Sell Restaurants later and say, “Can you call that guy and see if he’s still interested.”  We get one bite at the apple in negotiations.  If you simply say no and go back later to negotiation, you are in a severely weakened position.  No matter what the offer is; it’s a good strategy to look for some positive in it and counter the buyer.

Deadly Mistake 5:  Going to market without good financial data

The last deadly mistake is going to market without good financial data.  When buyers are interested, time is money.  If you don’t have your past year books and records in order or if you don’t have the ability to provide electronic documents, get ready to lose deals.

You must have your financial house in order and be ready for due diligence.  Time kills deals and introduces doubt.  While we are waiting on due diligence materials, the buyers are getting cold feet by the minute.  Don’t make this deadly mistake.  Have your records ready to go.

In twenty years of selling restaurants just like yours, these are the five most deadly mistakes we’ve seen.  Don’t fall victim to them.  Prepare up front and contact a broker today for success in selling your restaurant.

Want our free downloadable checklist on selling your restaurant?  Click the link below.

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Topics: Selling a Restaurant

Robin Gagnon of We Sell Restaurants Achieves CFE (Certified Franchise Executive) Designation

Posted by Robin Gagnon on Jun 14, 2019 9:34:00 AM

Robin Gagnon, co-founder of We Sell Restaurants has completed the study and testing to attain her Certified Franchise Executive (CFE) designation offered through the International Franchise Association. 

A passionate leader in the franchise community, Robin joins those worldwide who demonstrate strong credibility in their franchising expertise by study and testing for the designation.  She serves on the Executive Board of the Women's Franchise Network - Atlanta and is the past leader of that team.  She is also on the a member of the Women's Franchise Committee at the national level of the International Franchise Association.

Robin GagnonThe mission of the Institute of Certified Franchise Executives™ (ICFE) is to enhance the professionalism of franchising by certifying the highest standards of quality training and education. Among franchise leaders, the CFE designation has become widely known and recognized as a mark of distinction.

Why this, Why Now?  Gagnon says, “I undertook the study to become a CFE as a lifelong student dedicated to professional development.  It’s the same reason I achieved my Certified Business Intermediary or CBI status in business brokerage.  The process of learning does not end with graduation from a university, in my case, with an MBA.  It requires constant affirmation and commitment to study to stay current.  As a business broker with many franchise clients as well as a franchisor of our brand, We Sell Restaurants, it’s critical to understand the industry on every level, including the legal and finance sides, as well as the marketing and sales.  The CFE designation tells others in the industry that I am serious about franchising and I understand all the nuances.”

What was the course of study? “3500 credit hours were required which included a combination of experience, classroom study and online classwork.  The curriculum ranged from marketing to legal and financial considerations of franchising, as well as ultimately, testing.” 

What was your favorite part?  “The interaction with peers at classes attended during the International Franchise Association (IFA) conferences was the best part of the program.  I made valuable contacts and learned from others in all levels of franchising.  I was paired with everyone from leaders of 1,000 unit brands to start-up franchisors. There was an immeasurable amount of talent in each course and everyone was generous in sharing their talent and experience.”

How does someone get the combination of experience and credit hours to attain their CFE? “The IFA does an excellent job of providing educational opportunities including everything from Wednesday “Webinars” to classroom courses.  Experience credits are granted for attendance at local events like the SEFF Southeast Franchise Forum or the Women’s Franchise Network of Atlanta (WFN) and of course, the IFA convention each year.  Through a combination of attendance at events, study online and coursework at conference, you can earn your CFE in one to two years.”   

How will you use your CFE?  As a franchisor and co-founder of We Sell Restaurants, we are already using the knowledge from my CFE studies to implement best practices and build a brand for the future.  As a business broker focused on franchise resales, my clients, including major brands and single units, know they are getting representation from someone committed to the ideals of the CFE. These include professional development, peer networking, industry recognition, professional standing, and commitment to franchising.”

Do you recommend others interested in franchising commit to their CFE?  “Absolutely. It requires a strong commitment of time and money but it pays off.”

Is there a graduation ceremony?  “There is!  I will walk the stage at the next International Franchise Association conference in February next year.”

For more information on Robin’s franchise listings, visit this link online.

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Robin Gagnon bio

Topics: Buying a Restaurant, Selling a Restaurant

5 Signs You’re Ready to Sell Your Restaurant

Posted by Robin Gagnon on Apr 8, 2019 12:45:31 PM

If you’re working in a restaurant and have put in hours and hours and are still wondering when the excitement starts… maybe restaurants are not the thing for you. If you have owned a restaurant for years and years and are ready to retire or any of the above hits home, this post is for you.

You may intellectually know that selling your restaurant, or any business really, is frightening and full of unknowns. Your friends and relatives may tell you “You’ve put so much work into it! Just wait until it turns around!” Meanwhile, the idea keeps returning to you day after day, as you put your keys in the door and turn the lights on in the kitchen.   

Are you the person who gets the sense you would be happier in a different career?  Are you passionate about the restaurant industry but just not as a restaurant owner? Did you find yourself way in over your head once you bought your restaurant? It could be time for a change in your life and you just may be ready to sell your restaurant.  

In working with hundreds of entrepreneurs each year, we see common signs that now is the time to go ahead, take a deep breath and sell a restaurant like yours.  If you’re experiencing these signs, it may be time to stop procrastinating and sell your restaurant that seems to be holding you back.

5 signs you are ready to sell your restaurant

Sign Number 1:  You’re Not happy Anymore

When you first bought your restaurant, you were beyond excited. You had a pep in your step every day and woke up before the alarm clock even went off. Now the realities are hitting home; you get calls after hours, you are begrudgingly sliding out of bed and dread going into your restaurant in the morning. You love the people and what you put out, you just don’t have the zeal you once did. This is sign number one that you may be ready to sell your restaurant.

Sign Number 2: Your Restaurant is Not Performing Like You Thought

Signing the papers for the deed of your eatery, you had dreams of wads of cash and a packed dining room every night. The truth is, restaurant owners don’t always see profits quickly. If you thought you could get in, get rich, and get out – you definitely were surprised when you found how much time it takes to turn red into black in the restaurant industry. This could be the second sign that maybe you should sell your restaurant.

Sign Number 3:  Late Nights Mean Missed Family Dinners

You originally got into the restaurant business to build a nest egg, or a legacy, for your family. However, more and more, you are finding that you are missing family dinners in favor of dinner rushes. Showing up late to sporting events because the food delivery wasn’t on time. Missing your anniversary because your calendar is full of inspections, deliveries, payroll, scheduling and more. If your restaurant is getting in the way of your family, this may be a sign you are ready to sell your restaurant.

Sign Number 4:  You Aren’t as Comfortable with Risk Any Longer

When you started your business, you may have been young, with few responsibilities.  You were fine with the ups and downs of the business as your needs were minimal. Now you have a mortgage, two kids and a wife and feel the need for steady income. 

That makes sense and is often a reason to sell a restaurant like yours.  While you’ll never earn as much for someone else as you will working for yourself, you’ll also never have the potential to lose as much either. If the amount of risk on your plate keeps you up at night, give us a call.  We have buyers ready to go that have measured the risk and find it perfect for where their life is at the moment.

Sign Number 5:  The “What Ifs” Keep You Up at Night

You lay awake often wondering what would’ve happen if you sold your restaurant earlier or never bought one in the first place. It isn’t quite the lucrative money-maker you thought, and you are bogged down by the “what ifs” – “What if I bought that tech start up instead?” or “What if I decided to go back to college instead of running this restaurant?”  Your head is filling with things and none of them are your restaurant – this is a sign that it is time to sell a restaurant like yours.   

Whether it’s that you’re not happy anymore, you want to forego the long nights in favor of something more family-friendly, your restaurant is not performing like it once was, or if the possibilities are keeping you up – Relax. It may just be time to sell your restaurant.  

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

We Sell Restaurants is the number one restaurant brokerage firm in the country! We would be happy to sit down and talk to you about the possibilities of selling your restaurant.

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Topics: Selling a Restaurant

The Five Best Ways to Sell a Restaurant

Posted by Robin Gagnon on Mar 26, 2019 8:14:40 AM

Thinking of selling your restaurant and unsure where to start?  Here are the five best ways to sell your restaurant that will have you ready to go in no time.

First and foremost.  Get your books in order.

Accounting is no one’s favorite task.  If necessary, bring in help to get the books ready to go.  Restaurants are sold on a multiple of cash flow.  No matter how much you are doing in sales and no matter how great the business looks, the books and records are the key to getting the most money in the shortest amount of time.  

Best Ways to Sell a Restaurant

Secondly:  Interview Brokers

The number two item on the list of the best ways to sell a restaurant is to interview restaurant brokers.   Have a series of questions ready to ask them to include things like:

  1. How many restaurants (no overall businesses) have you sold?
  2. How do you market my restaurant for sale?
  3. What is your background and experience?
  4. Do you have financial training, an MBA or other degree that demonstrates you understand valuation?
  5. Are you a Certified Business Intermediary? This designation is given to less than 500 people worldwide who pass extensive testing by the International Business Brokers Association. 

Finding a knowledgeable resource is one of the five best ways to sell a restaurant.

Third:  Inspect the Physical Space

Third on the list of best ways to sell a restaurant is to view the store with a critical eye.  If you usually enter the front door, go in the back.  If you usually come through the front, enter through the kitchen. Look around the space.  Look up and look down.  Are there ceiling tiles that are dingy and have grease clinging to them in the kitchen?  Does the bathroom need a paint job? 

You’re not selling a house and all pricing decisions should be based on cash flow, but buyers are critical when the store has obvious physical flaws.  Take a month or so and get the store in order before putting it on the market with peeling floor tiles and cooler doors that don’t close.

Fourth:  Put together an equipment list

If you’re selling your restaurant, you are selling the furniture, fixtures and equipment.  Buyers must know what they are getting.  These are the physical assets that transfer in the location.  It is time consuming and a pain, but a list of equipment is necessary.  If you want a starting point, ask your broker if he has a list to get you going.  We routinely provide these as a starting point.    

A few tips on generating your equipment list.  First, never include equipment that isn’t working.  Pull it out of the space. You’re not using it today to generate the earnings so the buyer won’t need it but if you leave broken equipment in place, they will expect it to be replaced or repaired prior to close. Also remove anything personal that won’t transfer in the sale.  If the Antlers over the fireplace are from the first deer you ever bagged and you refuse to transfer them, pull them down before you list it.  Once a buyer sees these items, he will expect them to convey in the sale.

Lastly:  Confirm what you Owe

The best way to sell a restaurant is to understand where you’ll be when the dust settles, and the money is paid.  You need to know what you owe any partners, any banks, lenders or others going into the transaction.  The last thing you want to do is get a deal in place and realize you don’t have the funds to close.  If you owe more than the restaurant is worth, this is not a deal killer.  A strong restaurant broker can work with you on negotiating settlements and give you tips to get you out of a tough situation. Just be up front and know what the problems are before they come knocking. 

These are the best ways to sell a restaurant.  If you want to speak to a restaurant broker for more details, reach out to We Sell Restaurants or click the link below.  Our experts can help.

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Topics: Selling a Restaurant

5 Reasons Franchise Resales Should be Outsourced to a Specialist

Posted by Robin Gagnon on Mar 7, 2019 10:07:38 AM

Franchise restaurants, as well as all franchisors, experience a natural phenomenon known as turnover.  As part of the natural life cycle of the brand, some units will become available for sale.  The typical reasons for selling are common to virtually every brand.  For some, it’s burnout or a different expectation for the actual life of the franchisees versus what he or she expected.  For others, it’s a partnership issue which could include a divorce or marital split or simply two partners that no longer have the same goals.  For others, it may be the evolution toward retirement and life after work. In any case, a franchise resale occurs when the current owner of a unit, for one reason or another, opts to sell the store before his original franchise term is over.5 Reasons to not handle Franchise Resales

Does that mean something is “broken” in the brand?  No. In fact, it is healthy and appropriate to see a rate of around 5% to 7% in franchise restaurant resales for a mature concept. There are even higher rates quoted in the industry.  The International Franchise Association suggests on their site, franchise.org that the number could be as high as ten percent.  No matter the rate, the important thing for franchise brands to know, when they are facing resales, is that this task is best left to a specialist.  Here are the top five reasons why We Sell Restaurants would tell you to seek outside help for franchise restaurant resales.

When the franchise restaurant resales surface, it’s important to choose a path that results in a good outcome for both the franchisor and the franchisee. Here’s why we believe there are five reasons you never, ever want to handle your franchise restaurant resales.

Reason 1:  Your Development Team has a Totally Different Focus

Those selling new franchises have a totally different skillset and focus than those buying new development opportunities. The financing requirements are different. The cost structure to buy and staff is different than for building from scratch. Most brands that go down this path segregate their team between new sales and franchise resales for a reason.  Resales are very time consuming, with many moving parts.  It’s outside the normal business practice and process, thus costing more effort and training with your team.  

Reason 2:  The Customer is Different for Resales versus new Sales

The customer buying a franchise restaurant is very different from those willing to build from the ground up.  The Franchise Resale customer has a much lower risk tolerance and a much higher need for security and ability to conduct due diligence on the numbers. He or she will need much more hand holding and materials from the seller.  Asking your development team to simultaneously handle new franchise sales and franchise resales is putting them at a disadvantage.

Reason 3:  Ask Your Lawyer.

Your Legal Team will tell you to never handle Franchise Restaurant Resales.  In the process of re-selling units, there will be a need for a valuation.  Do your team members have the expertise to provide that valuation?  The difference in even a few thousand dollars could easily benefit one person over the other.  Where does your loyalty lie?  Is it with the established franchisor who has been a loyal customer for many years or the new guy that you want to be sure doesn’t overpay or become over-extended?    

Item 19 or Financial Disclosures made in the FDD are not applicable to franchise resales so someone without the expertise and benefit of a strong financial background in your development team could expose your brand to major liability in the process of disclosing numbers.  Who is sourcing those numbers and what’s your liability for sharing them?  If they turn out to be flawed or there is a legal issue, will the buyer go after the individual unit owner or you, as a franchise brand?

Are you charging a fee for your services?  Before Franchise Resales are handled internally, as your legal counsel for an opinion.  We believe he will tell you to steer clear of these transactions and bring in an independent third party for franchise resales.  

Reason 4:  Franchise Leads are Expensive

It is no surprise that there is great competition for those seeking to buy a restaurant franchise or any type of brand.  By outsourcing this important role, your lead Acquisition can focus on new stores without the expense going to Franchise resales

The requirement to generate leads is a costly proposition.  Those leads and the advertising is very different for the two different customers, one seeking an established business, versus one seeking a proven opportunity.  Let an outside resource commit their dollars to resales while you focus the dollars on one lead funnel with one set of costs.

Reason 5:  You Aren’t licensed

Another reason for a brand to avoid franchise resales is the requirement for licensing.  Reach an agreement with a firm like We Sell Restaurants with the proper licensing in all the states where it is required.  The last thing you want to do is open yourself up both regulatory issues with the sixteen or so states that require a license.  In some states it is a misdemeanor to practice business brokerage without a license.  In others, like Florida for example, it’s a felony.

That’s not the only reason.  If you have an unhappy buyer or seller, you just opened the door for a lawsuit if they don’t like the outcome of the deal and you’re practicing without a license. 

If you are running a successful franchise program, our advice is to stick with what you do best.  Avoid the issues with franchise resales by contacting an independent third-party specialist like ours.  We build programs to eliminate the risks for the franchise and integrate to their practices for resales. 

Consider these five reasons to avoid internal resales and understand why they should never be part of your focus.

Looking for a franchise resales specialist?  Contact We Sell Restaurants or visit www.wesellrestaurants.com for more information.

Topics: Restaurants for Sale, Selling a Restaurant

The We Sell Restaurants Checklist for Selling Your Restaurant

Posted by Robin Gagnon on Jan 21, 2019 2:47:18 PM

Selling your Restaurant may mean putting some materials together first.  Here’s a checklist of what most Restaurant Brokers will need to make sure you put your best foot forward!  There are limited buyers for the best restaurants for sale so be sure they get the best impression of your business.

It’s all in the name.  Selling your restaurant won’t happen without both the legal name of the selling entity and the business name (including the store number if it’s a franchise location).  Make sure your Restaurant Broker also knows what type of structure you operate your business under, whether it’s an LLC, C-corporation or Sole Proprietorship.  Expect an experienced broker to check the status of your legal entity with the Secretary of State before listing.  A corporation that’s defunct will keep a transaction from moving forward.

If you are selling your restaurant franchise, you have some extra items to pull together including:Checklist-1

  • Remaining number of years on the franchise agreement
  • Royalty percentage
  • Marketing Fee percentage
  • Transfer fee amount
  • Franchise training time period and understanding of whether this occurs before or after closing.
  • Date of any required refresh or remodel of the store and estimated cost.
  • Copy of the franchise agreement.

Do you have to tell your brand you are selling?  Most franchise agreements state that you provide a “right of first refusal” and notification to the brand prior to listing.  In reality, most owners skip this step until and unless it’s placed in contract. You should be clear on the process for transfer and understand who in the corporate office will assist in approving the new buyer.

Make sure the restaurant broker knows how to reach you including your cellphone, email address and any other information to provide up to the minute results on listing activity.

For the store itself, be prepared to provide information on employees (the number of full time and part time), a sample schedule and rates of pay.  For the business, buyers and restaurant brokers want to know the operating hours, how long it’s been established and how long you, as the seller have owned it.  They will also need to know the number of seats both inside the business as well as patio seating. 

Infrastructure is key to selling your restaurant and a key component of what you are transferring.  Make sure you understand the size of your hood and grease trap along with the age and condition of any heavy equipment like the HVAC system, coolers or freezers.

 Selling a restaurant may seem intrusive in some regards.  Buyers definitely want to know your reason for the sale.  Be prepared with a response on why you are selling your restaurant whether it’s burnout, retirement, relocation or simply a change in lifestyle.   

When it comes to the lease, buyers want to see a physical copy.  Either scan your original or ask your landlord for an electronic copy.  They will want to understand the escalations as well as any option years.  When quoting the rent, make sure you include Rent plus CAMS, taxes and insurance.  Your restaurant broker will also need contact information for your landlord as well.

It is critical that you provide up to date financial information when selling your restaurant.  Buyers are looking at the cash flow to make a purchase decision.  For lending, that means two years of tax returns plus the current year profit and loss statement.

Decide up front, when selling your restaurant, exactly what will transfer.  Will your famous cookie recipe be included or not?  What about the picture of your family over the fireplace?  If something is not included, pull it from the restaurant so you don’t have to explain that choice to buyers.

Lastly, do some local research and figure out key economic factors that make this a winning location or opportunity for someone one. 

Selling your restaurant is easy if you follow this simple checklist and provide your restaurant broker all the information he or she needs.  You can download our restaurant selling checklist at this link or contact us to sell your restaurant at this one.

 

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Topics: Selling a Restaurant

Restaurant Brokerage Firm We Sell Restaurants Expands to New Markets

Posted by Robin Gagnon on Jan 17, 2019 5:49:53 PM

Franchise Development Agreements signed to Expand Presence in Colorado & Wyoming

We Sell Restaurants, the nation’s leading restaurant brokerage franchise brand, announced today the expansion of its operations with new franchisees in Colorado and Wyoming.  This growth in the West is announced just a month after signing two other franchise development agreements for Charlotte North Carolina and Naples Florida.

A rise in franchise development is driven by the brand’s ongoing growth strategy and overall success in the industry.  This achievement, coupled with their proprietary software platform for business brokerage, the Broker’s Operations and Sales System or BOSS, has drawn experienced restaurant operators as well as those outside the industry, to join the growing company.

The expansion in Colorado and entry to Wyoming will be spearheaded by new franchisees Jeff and Tawnie Marcus.  They have signed an agreement to launch their location in Northern Colorado with Boulder as a base and extend their operations into Wyoming. The practice will launch in early February 2019.

The Marcus team has an unmatched passion for the restaurant industry and have owned and operated nearly a dozen restaurants since 1991. Their concepts ranged from breakfast and lunch and family diners to full service restaurants with complete bars, nightclubs and more. As owners of a family diner, they were awarded Marketers of the Year in 2007 for the National Independent Restaurant Association and were named "Best Casual" Restaurant every year from 2006 thru 2011.

jt smaller“We chose We Sell Restaurants since it complements our experience and knowledge.  We’ve owned, and operated restaurants and also worked alongside restaurants in the online ordering and delivery aspect. We can’t think of a better way to stay engaged in the industry than as a Restaurant Broker for a premiere firm.  We Sell Restaurants has solid systems, training and flexibility. We are also highly confident in the well-rounded background and cross-industry experience of the founders. We see Northern Colorado as a thriving and dynamic restaurant industry currently underserved from a niche, exclusively restaurant, business broker perspective.”

With more restaurants for sale across 42 states than any other firm in the country, We Sell Restaurants is the restaurant brokerage leader in America.  The company is currently seeking single and multi-unit operators to join in the brand’s rapid expansion. For more information about franchise opportunities, visit wsrfranchise.com or call 1 888-814-8226.

About We Sell Restaurants

Launched in Atlanta, Georgia, We Sell Restaurants has spread nationwide and sells restaurants in over 40 states.  We Sell Restaurants is the nation’s leading business brokerage firm focused solely on the restaurant industry.  Founded in 2001, We Sell Restaurants has been providing professional specialized services for the industry with a strong focus on franchise resales for almost 20 years.  We Sell Restaurants offers the only Certified Restaurant Broker training in the nation, resulting in experienced, knowledgeable brokers with unmatched closing ratios. For more information, please visit www.wesellrestaurants.com

Topics: Selling a Restaurant

5 Reasons January is the best month to Sell a Restaurant

Posted by Robin Gagnon on Dec 20, 2018 10:52:40 AM

Exactly why is January the best month to sell a restaurant?  For the nearly twenty years that We Sell Restaurants has been marketing businesses, the first of the year signals an uptick in buyer interest.  That means December is the best time to list your restaurant for sale.  Here’s why, in this Restaurant Broker’s opinion.

Reason 1 – It’s the Economy….

The economy, despite a recently announced rise in interest rates is still pumping out the strongest GDP (Gross Domestic Product) in years.  The real GDP growth in second quarter was 4.2 percent, something unseen in a5 Reasons January is the best month to Sell a Restaurant (1) decade.  With this economic news, combined with a strong labor market and record unemployment, those working a job feel comfortable taking a risk.  If they step outside their current corporate comfort zone and paycheck to buy a restaurant, the market is always good enough to return.  That gives them more security to take the chance on a new venture. That’s reason one that January will be a great month to sell a restaurant.  Buyers will be home over Christmas vacation studying opportunities that look more interesting than returning to work.  

Reason 2 – Restaurants are Worth more

Year end numbers are in and 2018 was much better for most restaurant sellers than 2017.  For that reason, the value of the restaurant you want to sell has increased over the prior year.  This is based on national results published by Black Box Intelligence data.  “Same-store sales were up 1 percent in November, which became the sixth consecutive month of positive sales growth for the industry. Excluding a very small dip in same-store sales during May, every month since March has posted positive same-store sales growth. This represents a period of expansion not experienced by the industry in over three years.”  When sales go up, earnings go up, particularly after a tough 2017.  If you want to know what your restaurant is worth in today’s market, now’s the time to find out.

Reason 3 – 401K plans are still worth more

Despite recent turmoil and sell-offs with issues around Fed Reserve hikes and more, the market is still good.  Even after the current sell-off, for instance, the S&P 500 through 12/10 close was up by nearly 15 percent since President Trump’s inauguration and more than 21 percent since Election Day 2016. This gives those in the market to buy a restaurant confidence that their nest egg is secure.  They can leave corporate America, leverage 20% down on a purchase and have money to return to if everything fails.  That’s the third reason January will still represent a high point in placing restaurants in contract.

Reason 4 – Lenders are Ready to Go

Lending is at a level unmatched in this Restaurant Broker’s history.  Multiple banks are making more than one offer on the same deal.  With rates inching up, based on the latest Federal Reserve hike, money is still cheap but more importantly, it is readily available. Someone in the market to sell a restaurant, no longer must worry about holding a note on the deal.  He or she can expect a payout, in most instances, at the closing table if the books and records are strong and sometimes, even when they aren’t. If you want to sell a restaurant today, be ready for the market to continue to be hot in January. Buyers only must bring between ten and twenty percent to the table to get a loan in today’s very favorable loan market.  The recent interest rate hike is meaningless overall in the hit to a payment but will make lenders even more anxious to close more deals and earn more interest on them.

Reason 5 – Because we said so....

We have been selling more restaurants than anyone else nationwide for nearly twenty years.  We have watched the cadence of the market through thick and thin, boom and bust. In all instances, we see buyers flock to the latest listings in January.  That creates a spike in our web traffic, more inquiries online and more deals placed in contract. 

Overall, if you’re in the market to sell a restaurant, now is the time to list the business, before January hits and buyers start looking at all the restaurants for sale.  Contact one of the Restaurant Brokers to learn more about the process or visit our listings online at this link.

Blog Byline Robin

Topics: Selling a Restaurant