A common problem for restaurant owners is selling a non-profitable restaurant. Did you know that owning a restaurant is one of the most demanding jobs in the world? The average restaurant will close within five years. If you’re overwhelmed by financial liabilities, health insurance, divorce, partnership issues, legal issues, or simply ready to retire, you’re not alone. Many restaurant owners in your position believe that selling is impossible if their business isn’t turning a profit—but that’s not true!
Restaurant Brokers help sell non-profitable restaurants, which are often referred to as asset sales. Restaurants advertised as Asset Sales are valued using the Replacement Cost Method. The replacement cost method assumes a buyer pays the seller to benefit from the existing investment in the restaurant facility, lease, leasehold improvements, location of the restaurant, and equipment.
Dominique Maddox, the restaurant broker at EATS Broker, says, “Many buyers are seeking opportunities to acquire second-generation restaurant locations through an asset sale, where the value lies in the location, equipment, and infrastructure rather than financial performance.”
As experienced restaurant brokers, our restaurant brokerage specializes in selling distressed restaurants. We ensure that restaurant owners transition out of ownership smoothly while maximizing their restaurant’s value.
Restaurant Business Broker step-by-step guide on how to sell Non-Profitable Restaurants:
Step 1: Consultation & Restaurant Valuation (Preparing Phase)
The first step is to connect with an experienced restaurant broker who understands how to sell an Asset Sale. During a confidential consultation, Restaurant Brokers will assess the restaurant’s assets, location, lease terms, and goodwill. This evaluation helps determine your restaurant’s most effective marketing strategy to attract potential customers.
Step 2: Preparing Your Restaurant for Sale (Action Phase)
Even if your restaurant is struggling financially, presenting it in the best possible light is essential to attract potential buyers. This involves taking inventory of the equipment, repairing any damaged items, and replacing non-functional equipment. A good cleaning and some new paint can also help a restaurant’s visual appearance. Cleanliness and a well-maintained appearance can make a big difference.
Collect your lease and any amendments. Ensure you review your lease and understand your terms, or consider hiring a professional Restaurant Broker.
Non-profitable restaurants should still be ready to provide a profit and loss statement and sometimes a tax return. Some buyers want to analyze the expenses of the established business to get an idea of how much utilities, insurance, labor, food, and other expenses cost. Buyers who plan to convert the restaurant space into a new concept typically don’t request profit and loss statements, as they are changing the concept and operations.
Goodwill is essential when selling a restaurant; the buyer plans to maintain the restaurant’s concept while making necessary changes. Restaurant owners should review the appearance of their restaurant website. Does it look outdated, or is it even functional? How does the social media presence look on Facebook, Instagram, and others? Lastly, review the activity on Google Reviews to maintain constant responses to customers’ reviews.
Selling a non-profitable restaurant is more challenging than selling a profitable restaurant, but it happens every day. Our restaurant brokerage has a network of buyers actively searching for opportunities to purchase restaurants without the burden of starting from scratch.
Many buyers are looking for turn-key opportunities, and we emphasize the advantages of purchasing an existing restaurant, including infrastructure, equipment, and an established location. We handle negotiations to help secure the best possible deal for Restaurant Owners.
Don’t wait—your restaurant has value, even if it’s not profitable. Let’s find the right buyer and give you the fresh start you deserve!
EATS Broker is the trusted choice for restaurant resales. For more information about EATS Broker and Dominique Maddox, visit www.eatsbroker.com or contact Dominique Maddox directly at [email protected] or 404-993-4448.
