Expect restaurant sale transactions to boom as more deals go into contract in the fourth quarter of 2024 and the first quarter of 2025 following the historic win of Donald Trump in the presidential election. His achievement as only the second man in history to win two nonconsecutive presidential terms, along with a strengthened Republican majority in the Senate and projected, though thin, majority in the House.

The market is signaling a drive for new dynamics in the business-for-sale marketplace overall and restaurant sales specifically. This wave of economic optimism reflects confidence in a regulatory environment that many believe will favor small businesses and entrepreneurial ventures, including restaurant acquisitions.

“Our restaurant buyers were bullish going into this quarter, and transactions at We Sell Restaurants surged in October,” said Robin Gagnon, CEO of We Sell Restaurants. “We’ve already seen a 48% increase in transactions compared to the same period last year, signaling a market ready to absorb more deals.”

Stock Market and Economic Boost

Following Trump’s victory, the stock market responded strongly, with the Dow Jones climbing over 1,300 points on the first day post-election, while other indices also reached new highs. Cryptocurrency markets, often viewed as more volatile and speculative, were similarly impacted, with Bitcoin soaring to a record-breaking $75,000. This wave of economic optimism reflects confidence in a regulatory environment that many believe will favor small businesses and entrepreneurial ventures, including restaurant acquisitions.

As buyers look to the future, economic conditions appear favorable. The increase in consumer optimism, which had recently hit a three-year low, is projected to reverse by year’s end. When the consumer sentiment is high, restaurant sales generally follow suit, as people dine out more frequently, viewing meals as both a necessity and a form of entertainment and social engagement.

In fact, industry forecasts projected that quick-service restaurants would reach $316 billion in sales this year—a 7.1% increase according to the 2024 Fast Food and Quick Service Restaurant Report. With heightened consumer optimism, actual figures may exceed expectations, potentially boosting the restaurant market even before the new administration officially takes office in January 2025.

Entrepreneurs Back in the Game

With the economy as the number one issue on voters’ minds, it’s no surprise that some prospective buyers have been hesitant, waiting to see the election outcome before investing. Exit polls showed that 52% of voters rated the economy as "extremely important"—a number not seen since the 2008 financial crisis. Trump’s win, along with his well-known pro-business stance, could bring these potential entrepreneurs off the sidelines, creating a fresh wave of demand for restaurant listings.

Trump has demonstrated an innate understanding of the restaurant industry and his plan to end income tax on gratuities or “No Tax on Tips” program he proposed over the summer has seen a strong response at grass levels. It also garnered bipartisan support and was subsequently copied by his Democratic opponent. It appeals to those working in the industry and with a significant portion of the server and counter staff receiving tips, it has mass appeal to those in the industry and could help to offset continued labor shortages. The policy could help alleviate staffing shortages and improve retention by making tipped roles more financially attractive, indirectly benefiting restaurant owners by stabilizing labor availability.

Lower Interest Rates: Making Capital More Accessible and Deals More Attractive

One of the significant factors driving increased restaurant sale transactions in the upcoming economic climate is the prospect of lower interest rates. When interest rates decline, the cost of borrowing drops, making capital more accessible and affordable for buyers. In the restaurant-for-sale marketplace, this has a powerful effect: lower interest costs mean lower monthly payments on financed transactions, which can be the deciding factor for many buyers considering a restaurant purchase.

A Trump administration that constrains spending, lowering inflation overall will result in the Fed dropping rates. Lowering the cost of capital doesn’t just benefit buyers; it also supports higher sale prices for sellers. When buyers face lower financing costs, they have more room to negotiate and may be willing to pay a premium for the right opportunity, knowing their monthly debt obligations will remain manageable. For sellers, this can translate into faster sales and a stronger return on investment, as well-funded buyers enter the market with confidence and increased purchasing power.

Interest rates are a particularly critical consideration for restaurant buyers who often face high initial costs, including not only the business purchase price but also investments in equipment, inventory, and working capital. Lower rates ease this burden, allowing buyers to preserve their cash flow, which is essential in a business with traditionally tight margins. This favorable financing environment can make restaurant ownership more attainable and sustainable for prospective buyers, especially first-time entrepreneurs who might otherwise hesitate to invest in a restaurant.

We can all hope for a low-rate environment coming out of the election. For buyers, this means predictable, affordable financing costs, and for sellers, it means an extended window to attract well-qualified buyers eager to take advantage of these conditions.

A Seller’s Market: Optimizing Timing for Restaurant Sales

For sellers, these favorable conditions make it an ideal time to list their businesses. Historically, the first quarter of the year sees the highest volume of transactions going into contract. According to Eric Gagnon, President of We Sell Restaurants, “January has always been our busiest month for deal flow. Deals go under contract during this time, with closings happening in the second and third quarters as due diligence, financing, and lease or franchise transfers are completed.” He advises sellers to list in the fourth quarter to maximize visibility and generate demand by the start of the new year.

Beyond timing, Trump’s tax policies may create additional incentives for sellers. The Trump Tax Cuts, originally set to expire at the end of 2024, are likely to be revisited by a business-friendly Congress, with the potential for new legislation favorable to business owners. Trump has promised to reduce the corporate tax rate from 21% to 15%, building on his 2017 tax cuts. This would leave sellers with more profit to reinvest or pass on to their heirs in future transactions.

The estate tax exemption under Trump’s previous administration, which was raised temporarily, may also be revisited. This exemption allows business owners to transfer their estates, including restaurants, with less tax burden, potentially protecting family-owned businesses from hefty tax obligations upon sale or transfer. The capital gains tax, another key consideration for sellers, is also expected to remain more favorable under Trump’s leadership.

Why Now is the Time to Act

With a renewed focus on pro-business policies and economic stability, Trump’s administration is poised to create a market ripe for restaurant sales. Lower taxes, increased consumer optimism, and favorable financing conditions make this an opportune time for sellers to list their restaurants.

At We Sell Restaurants, our expertise in navigating market trends and understanding buyer and seller motivations positions us as the top choice to guide you through this unique moment. Whether you’re looking to capitalize on favorable conditions and list your restaurant or explore new ownership opportunities, our certified restaurant brokers are ready to assist. Reach out to We Sell Restaurants today, and let’s make this season of opportunity work for you.