Timing is Everything when Buying a Restaurant

Posted by Robin Gagnon on Dec 29, 2011 8:09:00 PM

Restaurant buyers often ask whether it makes a difference when they purchase a restaurant.  The answer is YES! 

Like all businesses, a restaurant for sale is subject to timing. Here are three factors that will affect anyone selling a business and benefit anyone buying a business.

Sales Cycle

The right time to buy a restaurant can be driven by the business cycle itself.  A sports bar is at its slowest in the lazy days of summer.  Loyal customers have abandoned their bar stools and big screen TV’s to sit by the pool or vacation with the family.  That means your neighborhood pub can be acquired at more favorable pricing than in the midst of college or NFL football season or March madness basketball games.

Count on the reverse of this timing if you’re looking at an ice cream or frozen yogurt franchise restaurant for sale. These are often available during the winter months at a discount even though they’ll have lines out the door when it’s warm outdoors.

License Renewals

If you’re buying a restaurant or pub that serves alcohol in a state where licenses renew once a year, you can often benefit from quick deals at year end (or the renewal date).  The current owner may not want to pay the costly expense of a liquor license renewal.  That makes him open to accepting a lower offer to close on the deal before the license is due.  You lose this leverage once the license is paid in advance for the entire year. 

Price Reductions

The time frame right after a price reduction on a listing price is a key time to grab a bargain.  The restaurant seller has already indicated his willingness to deal.  Anyone selling a restaurant is at their most negotiable at this time because they have already signaled that offers weren’t coming in the door at the original price.  Don’t be shy about serving up a lower offer on a reduced listing price as long as you’re willing to accompany that offer with an escrow check and a fast closing date.  

These are just three examples where timing the purchase of a restaurant business can pay off for the informed buyer.   An expert restaurant broker should be aware of these and other market specific timing opportunities to benefit you in buying a restaurant.

Topics: Buying a Restaurant

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