The best way to sell a restaurant in today’s market with restaurants closing at a record pace since the pandemic started is a tough question to answer.
BizBuySell’s 3rd Quarter Insight Report reflects a market-driven by opportunity seekers and business owners either well-positioned to profit or forced to exit.
The Restaurant Owners forced to exit likely will have to close permanently or try to sell as an Asset Sale. When a restaurant buyer is purchasing a restaurant, they are purchasing a salary/job or buying an Asset Sale.
An Asset Sale is a restaurant that is not profitable; books and records are not clean, open for less than two years, or closed. Why would anyone buy a restaurant that is not profitable? An Asset Sale can be a quick path to restaurant ownership.
Dominique Maddox, a Restaurant Broker and Founder of EATS Restaurant Brokers says, “The market in 2021 is projected to be filled with restaurants listed as an Asset Sale. The pandemic has reduced restaurant sales by 10%-50% of 2019 sales numbers for most owners. Restaurants work on narrow net margins ranging from 5%-10% starting and have little room for error. The pandemic will force many restaurant sellers to list for sale as an Asset Sale in 2021.
A large number of Restaurant Owners are trying to sell to pay back the rent owed and to get out of the lease obligations that usually come with a personal guarantor. They are selling their restaurant for pennies on the dollars”.
BizBuySell.com states that Asset Sales have become an increasingly popular path to business ownership. The only sure discount for value shoppers is likely to come by way of a business asset sale.
Restaurant buyers purchasing an Asset Sale can keep the concept the same or convert to a new idea. Restaurant Franchise Brands are taking advantage of the restaurant inventory coming available to buy and convert to their own concept. Buying an Asset Sale can save a restaurant owner thousands of dollars on build-out cost and save time to open the doors for business.
Asset Sales can be a perfect opportunity for existing restaurant owners to expand or for new restaurant owners to save money on opening a new restaurant. According to BizBuySell’s survey, 47% of buyers are considering purchasing the assets of a closed business.
EATS Broker recommends restaurant owners planning to sell a restaurant in 2021 to hurry to hit the market before inventory gets saturated with Asset Sales. January-April are the highest months for buyer activity on restaurants for sale.
For more information on the restaurant market and other available consulting services or restaurant valuations, contact Dominique Maddox at 404-993-4448 or by email at [email protected]. Visit our website at www.EATSbroker.com
