As Labor Day ends, we are looking back at August, a traditionally robust time for selling restaurants to gauge the best restaurants for sale on the market as measured by our customer calls, clicks and interactions at We Sell Restaurants.
Buyers are out in force as we saw traffic continue to remain above last year's levels. The most popular restaurants were consistent with the trend that the Restaurant Brokers have been seeing since the onset of COVID-19.
Two levels of listings are getting the most activity currently: those with the highest earnings and highest price points and those at the lower end of the spectrum. The ones that are in the middle, essentially, one-man owner operator type listings are moving more slowly than a year ago.
The reasoning for this activity, in this Restaurant Broker's opinion is that those in the market for high price listings are essentially unaffected financially by the virus. Their earnings or investments are in the same status as prior to the virus and they are seeking the best restaurants producing cash flow to improve their financial position.
On the other end of the spectrum, seven of the best restaurants for sale this month, or 70% that generated most of the clicks, calls and outreach to our Certified Restaurant Brokers were priced under the $100,000 mark. These are being sought by opportunistic buyers who will purchase at lower price points now. They plan to improve and reopen the businesses at higher performance levels in the future.
Those listings in the "middle" of this spectrum would typically be acquired by those seeking a job. However, due to layoffs in the industry leading to unemployment benefits and enhanced unemployment benefits, these buyers are sidelined as they collect checks from home.
We Sell Restaurants expects these buyers to strongly re-enter the market when they have exhausted all unemployment benefits, creating a subsequent boom in middle pricing levels - from $150,000 to $250,000. These listings typically producing earnings in the $50,000 to $85,000 range, an income that would support a family head of household moving from a General Manager into a role as an owner operator.
These mid-priced listings are also affected by the temporary slowdown in SBA lending as most banks are overwhelmed and working to finalize a tremendous pipeline of deals that must close by the end of September in order to qualify for the free six months of principle and interest payments allowed under the CARES Act. This is causing many lenders to literally put the brakes on any deals under the $300,000 mark as it is more lucrative for them to fund the larger deals.
Here is the list of the best restaurants for sale this month with closing thoughts at the end.
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In conclusion, these top ten restaurants for sale in August of 2020 show that buyers are still active in the market and interested in restaurants for sale. We anticipate a strong selling season ahead as more deals move from interested to in contract and ultimately sold.
For a look at all our restaurant for sale listings, please visit our website. www.wesellrestaurants.com