The Stages of Buying a Restaurant Franchise Resale can be complex and sometimes seem never-ending. The Restaurant Broker will provide a road map for success when buying a restaurant.
EATS Broker helps restaurant buyers through the obstacles of buying a restaurant. The majority of buyers have never purchased a Restaurant Resale and are clueless about what to expect. After reading this blog, potential buyers will not only be better informed of the Stages of buying a Restaurant Franchise Resale, but also feel empowered and ready to take on the challenge.
The Restaurant Business Broker tips for buying a restaurant:
Step 1: Inquire – Search online for restaurants for sale or restaurants for sale by owner
-Bizbuysell.com, BizQuest.com, Crexi, business brokers websites
-Sign a nondisclosure agreement to get more information on the listing
Step 2: Provide Proof of Funds-The Restaurant Real Estate Brokers will want you to prove you can purchase the restaurant before providing the sellers confidential information with the following documentation:
-Bank Statement
-401K statement
-Letter from Bank
-Franchise Approval Letter
Step 3: Analyze- This is the time to analyze and scrutinize the documentation you have received and anything you were told.
-Review the Profit and Loss statements.
-Review Tax Returns (if provided)
-Visit a restaurant as a secret shopper.
-Meet with the seller or have a conference call
Step 4: Make an Offer
-Broker or Attorney will draft Asset Purchase Agreement.
-Buyer chooses Closing Attorney.
-Set up escrow with the closing attorney within 3-5 days.
**Escrow is $10,000 or more**
Step 5: Due Diligence – This is the hardest part of the buying process
-Apply with the landlord for lease assignment
-Work with the bank for lending
-Work with Franchise for approval
-Attend Franchise training.
Step 6: Set up a Business Entity
-Establish a new legal entity to operate
-Apply/Confirm EIN
-Establish/Confirm new bank account
Acquire insurance required by either your Franchise, Lease, or Bank
7. Closing
-Schedule wire to the closing attorney
-Transfer utilities to your name.
-Sign lease assignment
-Sign Franchise Agreement
-Confirm POS transfer
– Inventory Count
-Sign tax documents with employees
It’s essential to understand the seven steps to buying a restaurant. Each step is critical to closing the deal. It’s highly recommended that you use a professional Restaurant Broker to help you navigate the obstacles of buying a restaurant. With their support, you’ll feel reassured and confident in your decisions.
For more information on the restaurant market and other available consulting services or a complimentary restaurant valuation, contact Restaurant Business Broker Dominique Maddox at 404-993-4448 or email at [email protected]. Visit our website at www.EATSbroker.com
