The World’s Worst Restaurant Buyers Advice

There are as many bad pieces of advice for restaurant buyers on the Internet as there are good ones.  Knowing the difference can save you both time and money.   Here are the three worst pieces of advice these restaurant brokers have read or seen in the past few months.  Some of this is so bad, you may be tempted to believe we are making it up – sadly, that is not the case.

Bad Advice 1:  Sit in the parking lot and count cars if you want to know the sales.

According to what some buyers read online or learn from others, the only “true” way to know what kind of sales a business is doing is to watch the parking lot, count the cars and then estimate what each one just spent on dinner.  This methodology is known as a “SWAG (Scientific Wild A** Guess).  To anyone that believes this is a valid method to get at sales volume, we ask, “why would you count cars when any legitimate restaurant broker should be able to provide you with tax returns, sales tax filings, point of sale system access and deposits?” 

Bad Advice 2:  Buy Direct from the Owner off Craig’s List if you want a Good Deal

The same online posting service that gave birth to the Craigslist Killer, multiple car buying and selling scams, online advertising for “questionable” services and you think that’s the place to get a great deal on a restaurant?  We don’t even know how to explain this one since some things you just ought to know. 

Bad Advice 3:  Close Without an Attorney                                                                                                          

This piece of advice given to unsuspecting buyers is also so questionable we are surprised when it surfaces.  Nonetheless, at least once every six months or so, a buyer will say they plan to save the money and close without an attorney.  Don’t do it.  An attorney does a lien search and protects the restaurant buyer against purchasing assets a seller may not even own.  He makes sure there are no issues down the road with taxes that keep you from getting a liquor license.  He makes sure the seller is accountable for his representations and warranties those statements.  There’s never a time that closing without an attorney makes sense for a buyer.   

Sadly, these are only three of the worst pieces of advice we commonly see offered to restaurant buyers.  There’s plenty more where those came from.  What’s the easiest way to avoid bad advice?  Spend time researching the credentials of anyone offering suggestions.  Make sure they have education and most importantly, experience in helping restaurant buyers and sellers.

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