As we close out October 2024, the restaurant brokerage market continues to show unprecedented strength, with transactions increasing 48% for We Sell Restaurants compared to October 2023. The factors driving this surge may be surprising to some, as they reflect not only economic shifts but also the mood and optimism of small business owners nationwide. Here’s a look at what made October remarkable and what restaurant owners, brokers, and buyers should be looking forward to as we head into 2025.

The October numbers were significantly ahead of last year for the brand and far outpaced others selling restaurants. BizBuySell’s Third Quarter Insight report found that restaurant transactions were up 15.2%, with the powerhouse We Sell Restaurants brand outpacing that result with returns that were 25.7% ahead of the prior year, a ten-percentage point improvement over other restaurant sellers. The October start to fourth quarter far outpaced that result in units and dollars.

What is driving the latest numbers? Certified Restaurant Broker and CEO of We Sell Restaurants, Robin Gagnon says, “While most election years find restaurant sellers and buyers on a pause as they wait the results, this year’s response was nothing short of breathtaking.

The results for We Sell Restaurants are not consistent with other measures in the economy. Consumer confidence hit a decade low in September before rebounding sharply in October with its highest monthly gain since March of 2021. A rate cut by the Federal Reserve in September could have contributed to some optimism around deals, though if so, it was a modest impact since closings and transaction times can take months from offer to finish and the pre-election adjustment to interest rates was on September 15. The Federal Reserve subsequently followed up with an additional rate adjustment downward on November 7.

The Small Business Optimism Index was up 2.2 points in October at 93.7 but still below the 50-year average of 98. The NFIB (National Federation of Independent Businesses) also recorded the highest ever Uncertainty Index for the month at 110. Nearly one in four (23%) of owners surveyed report inflation as the “single most important problem in operating their business.”

Post-Election Payoff

With the election behind us, there are strong indications that consumer and small business optimism will rise. In the first day following the election the stock market surged by over 1,300 points, and cryptocurrency reached record heights. For restaurant brokers, this renewed confidence could fuel a wave of transactions as consumer spending rebounds and buyers look to capitalize on favorable conditions.

One of the most important measures of the economy is consumer confidence and this impacts restaurants since so much consumer spending is tied to dining out. September marked the lowest level of consumer confidence since the 2008 recession before climbing in September. Following the election, these Restaurant Brokers are forecasting a turnaround. As people begin to feel more financially secure, they’re more likely to enjoy meals outside the home, which serves as both dining and entertainment and creating even greater demand in the restaurant sector.

Restaurants play an essential role in bringing people together, whether for business meetings, family gatherings, or simple meals with friends. This sense of community drives their value and underscores why restaurants remain central to both buyers and sellers. During the pandemic, many realized just how important these dining experiences were, and as the economy stabilizes, restaurants are likely to experience renewed interest from both consumers and investors.

Legislative Changes

Among the recent policy shifts, the proposed "no tax on tips" initiative has the potential to address labor shortages in the restaurant sector. By reducing taxes on tipped income, restaurants can become more attractive workplaces for potential employees. This could be a game-changer for restaurant owners who have faced staffing challenges, as it incentivizes workers to return to the industry with greater take-home pay.

Preparing to Sell

For restaurant owners considering selling, now is the time to start preparing. We anticipate that the first quarter of 2025 will be exceptionally strong, so it’s crucial for sellers to get their financials in order and seek a valuation from a certified restaurant broker. Like buyers, many in the industry may have been on a “pause” while waiting for the outcome of the election. We expect many more properties to come on the market in fourth quarter of 2024 and first quarter of 2025. January is a traditionally strong month for restaurant sales. Positioning early allows sellers to benefit from the anticipated surge in buyer interest.

Preparing for a sale is no small task; it can take six to nine months to complete a transaction. By starting now, sellers can capitalize on the upcoming wave of market optimism and possibly even attract multiple offers, driving up the final sale price.

Advice for Buyers and Brokers

With market confidence on the rise, buyers should also prepare by organizing their finances and familiarizing themselves with available opportunities. We Sell Restaurants offers over a thousand listings nationwide, representing more than $425 million in inventory. Buyers are encouraged to start distinguishing between the “good,” “better,” and “best” opportunities in the market, as competition for prime listings is expected to intensify.

Brokers, meanwhile, should be ready for a busy season. With demand accelerating, there will be no shortage of work for brokers who know how to navigate the current market dynamics and respond to the high demand from buyers eager to enter the restaurant industry.

The Impact of Technology on the Restaurant Industry

Technology is reshaping the restaurant industry in response to rising labor costs and changing consumer expectations. Restaurants are increasingly relying on AI and robotics to manage operations and streamline service. Many restaurateurs are now re-evaluating traditional processes, integrating automation where possible, and ultimately reintroducing the human touch to deliver a personalized experience. This balance between technology and personal interaction will define the future of dining, as it combines efficiency with the warmth of human connection.

As we close out October, we look forward to the months ahead with optimism. The restaurant industry is more dynamic than ever, offering both challenges and exciting opportunities. For those ready to buy, sell, or enter the market, now is an ideal time. At We Sell Restaurants, we are here to guide clients through each step, ensuring they’re well-positioned to succeed in this vibrant and evolving industry.

We’ll be back next month with our November roundup, ready to keep you updated on the latest trends and insights in restaurant brokerage. Check out the full video on YouTube