THE REAL STORY
Expertise and Experience Combined. With over 20 plus years as an Owner / Operator of multiple locations, and with multiple revenue streams from catering to consulting. When you choose to work with me concerning your restaurant / hospitality needs, know that you are banking on a track record of excellence and sound experience in the industry. I care about you and the success of your business ventures. Whether you are interested in a restaurant for sale listed or you simply want to consult with me about selling your business, I will put your complete satisfaction as my priority.
I’ll do everything I can to make sure you are matched with both the right situation and the right buyer or seller. I also make sure that I’m here to guide you through the sales process from start to finish. As a result, I’m confident in my ability to provide you with the best result and the most profitable transaction as possible.
If you would like to set an appointment, or if a restaurant for sale listed on my website has caught your eye, please do not hesitate to call or Text me at 905-931-8335
Buying an existing restaurant can be a great way to fulfill your dream of being a restaurant owner. You skip the difficult early years of getting a restaurant off the ground. As with buying a restaurant franchise, you gain instant name recognition and a built-in customer base. You don’t have to build a business plan and menu from scratch. But, in a purchase, you inherit the good, the bad, and the ugly. There might be a financial or legal mess waiting for you. If the existing establishment doesn’t have a stellar reputation, you may never be able to shake the baggage.
Before you jump to make an offer on your favorite diner or pub, you should thoroughly examine what you’d be buying. Just because you have a chance to dodge the difficulties of being a startup, that doesn’t make buying an existing restaurant an easy ticket to success. There is still as much to consider as there is when you open a new restaurant. It’s like buying a used car: you want to know everything before you end up with a lemon. Here are some key things to consider.
Why Is the Restaurant for Sale?
This is the biggest question—why do they want to sell in the first place? After all, if the restaurant is successful, then why would they want to get rid of it? There are two main reasons to sell:
The restaurant owners may want to retire or they may be tired of being their own bosses. It’s a demanding job, and the long hours can take a toll. Health complications, family issues, or other personal problems may make owning a restaurant too difficult for some people. If it’s not right for them, make sure owning a restaurant is right for you. They may not be making enough money to cover their overhead (warning bells) and want to unload the restaurant before they lose their entire investment (louder warning bells).
Are There Any Tax Problems or Legal Issues?
Failure to pay sales or payroll taxes is one of the most common reasons for restaurant closures. These obligations compound quickly under government penalties, and you don’t want to inherit that mess. There are many other legalities to watch for: unpaid wages, customer lawsuits, back rent, health department citations, and more. Enlist the help of a lawyer to review all public records so that your restaurant dream doesn’t become a legal nightmare.
How Is the Location?
Unless you are very familiar with the restaurant that is for sale (you either worked there or frequented it) you should find out how the location is working for the business. Is it located in a busy area? Is it visible enough to bring in foot traffic? Is there enough parking to encourage business? What is the competition like nearby? Have any new restaurants opened recently that might hurt business? If the property is rented, is the rent fair for the neighborhood? What are the future terms of the lease?
What Is Its Reputation?
Even if you’re a loyal regular at the establishment, take time to look at it through the eyes of the broader community. What do other locals think of the food and service? You can glean some of these insights through fly-on-the-wall observation. But take advantage of resources like the Better Business Bureau, Yelp, Google, and social media to see what people are saying about their experiences. While it’s true that you can always earn second chances by promoting that the restaurant is “under new management,” a terrible reputation may be hard to overcome.
Will You Buy the Whole Brand?
If you do decide you want to buy the restaurant, you still need to determine if you want the whole thing—the name, logo, and menu—or just the space and the equipment. It’s not uncommon for restaurants to rebrand after a sale, and this may be a good option if the reputation needs work. In some ways, though, this may feel like starting from scratch. If you don’t plan to make any big changes initially, then it might be best to keep the current restaurant name and branding. After all, if it ain’t broke, don’t fix it.
Every restaurant owner thinks about selling at one time or another. But even if your restaurant is a red hot success and buyers are lined up at the door, figuring out how to sell a restaurant isn’t as simple as selling a home or a car. It often takes several months to make a sale, and it can pay to start preparing a full year in advance. Understanding how to sell a restaurant is about more than just having your paperwork in order and upgrading a few appliances. It takes marketing savvy, knowledge of your business and sometimes even professional help to get your restaurant in shape to sell and fetch a price that will make you happy.
Deciding to sell isn’t always because something went wrong with the business. Partnership disputes can arise from big life changes in friendships and relationships. Sometimes owners get bored once they’ve successfully launched a restaurant and want to see if they can do it again. A restaurant that makes money might get sold to provide capital for an even bigger restaurant or other business venture. Selling your restaurant doesn’t mean you’re out of the business; it just means you’re changing things up and/or taking your life in a new direction.
If you’ve made the decision to sell, or are at least strongly considering it, you’ll probably have your work cut out for you. If you can swing it, plan to start preparing a year in advance – that way you can have your financials in good order, make any improvements you need to make and plan for steady or even increased sales to make your restaurant even more appealing for buyers.
The first thing to do when you are planning to sell your restaurant is to start gathering the required paperwork. You’ll want to compile the following documents:
A list of your assets
A copy of your lease
Copies of any applicable licenses (liquor licenses, sidewalk patio permits etc.)
Copies of health inspection records
Copies of architectural plans
Copies of your financial statements
Copies of other important financial documents
You may not want or need to provide prospective buyers with copies of all of these items, however it’s likely that you’ll need all of them eventually as part of the sale.
And there’s an added reason for gathering and updating these documents: you’ve been working hard inside your business for so many years, which means you are probably only seeing it from your insider’s perspective. Having these documents up-to-date and readily available will give you a comprehensive, accurate picture of what exactly you are selling, and allow you to see it from a buyer’s perspective. It also helps you to see where the gaps are that you’ll need to address.
The financials are always a critical piece of selling any business. After all, we’re in business – at least in part – to make some money! If possible, plan to share a year’s worth of financial records with prospective buyers, making these documents as accurate and orderly as possible. Financials can include your inventory of equipment and other assets such as furniture, profit and loss statements, cash transactions, tax documents and bank statements. Properly presented finances can have a huge impact on a sale, which is another reason to start preparing this piece well in advance.
As a seller, it’s your responsibility to disclose any liabilities as well, like debts, back taxes, looming repair costs, and so on. Failure to own up to liabilities can land you in court if the buyers find a surprise they don’t like after signing on the dotted line.
Is your restaurant location under a lease agreement? It’s critical that you understand the terms of that agreement before you begin the selling process. If you are under a false assumption about the particulars, your landlord may be able to stop a sale. This is the time to involve a lawyer who can help you understand all of the clauses and terms so you can be certain of your legal rights when selling.
Marketing to Sell Your Restaurant, We begin by setting a price. Setting a proper price for your restaurant can be tricky; too high and you might be waiting years to sell, too low and you might be giving buyers the impression that something is wrong. Not to mention you’ll be losing out on money from the sale!
Deciding on the value of your restaurant means assessing all things of value, from the easiest to the most difficult. Physical assets are the easy part; you can put a fair market price tag on your equipment (and the building and the land, if you own it), and so on. Financials are next. Potential buyers will want to know if you’re making money and will want to see those bank statements and tax returns to backup your claims.
Advantages of a Professional Broker. You might have the experience necessary to pull off the sale of your restaurant without outside help. However, there are many advantages to brokers, especially those that deal exclusively in the sale of restaurants.I know where to look for quality buyers, and will have the best understanding of the marketplace.
If you’ve ever sold a house, you already understand that presentation is everything. Polish it up and make the necessary improvements and repairs. And don’t forget about curb appeal! Clean up your sidewalk, polish windows and doors, and make sure your exterior is free of debris or trash. Lastly, it might sound like common sense, but if you are going to use photos as part of your marketing efforts, take those pictures after the restaurant has had a thorough cleaning!
Don’t put your restaurant on the market and then forget about it. You need to keep pushing your sales up and improving performance in all areas. Your operation will look much more impressive if you keep making sales and keep costs down through the selling process.
300 Welland Avenue, Unit 4
St. Catharines, ON. L2R 7L9
Office 905-685-7474 X 3
KRIS VRCEK - BROKER
DIRECT CALL or TEXT 905-931-8335