Selling your restaurant is not like selling a home. Maximizing value can be complex and challenging if a restaurant owner is unprepared and unorganized. Restaurant owners know how hard it is to operate a successful restaurant, but most are clueless about selling it. Restaurant owners have sacrificed to build a successful restaurant, and when it’s time to sell a restaurant, they should make sure it pays off.
Now that the decision has been made to sell your restaurant, what obstacles could come up in the process?
The importance of accurate financial records for restaurant valuation and attracting qualified buyers. Restaurant owners should have the following documents ready to share:
2–3 years of tax returns
Profit & Loss statements
Franchise Royalty Reports
POS sales reports
Sales Tax Filings
Bank Statements
Credit Card Statements
Balance sheets
Payroll reports
A list of equipment owned (do not include leased equipment)
Marketing
Restaurant Brokers specialize in marketing a restaurant for sale confidentially; this is one of the most important steps when selling a restaurant. How can you protect your restaurant information online when it’s time to sell your restaurant?
Use blind marketing ads that don’t disclose the restaurant name or location.
Require interested buyers to sign a non-disclosure agreement
Require buyers to show proof of liquid funds before providing financials on the restaurant
Don’t disclose critical information to make the restaurant easy to guess
Why should a restaurant owner use a Restaurant Broker for marketing?
Restaurant Brokers know how to market to serious buyers and maintain confidentiality. They only spend time with the right buyers after screening them for financial qualifications and receiving proof of liquid funds.
Deal Structure
Dallas Restaurant Broker Dominique Maddox said, “It’s easy to find a buyer that wants to buy a restaurant, it’s hard to get them to the closing table.” A Restaurant Broker earns his/her commission by understanding the legal documentation, legal structures, franchise agreements, tax implications, and handling the due diligence process.
Once an offer is accepted by the owner, the real work begins. During the due diligence period, the buyer may request the following items.
Lease Agreements
Inventory invoices
Copies of all business licenses and permits
Vendor contracts and equipment warranties
Payroll summary with employee pay rates
Employee roster with work descriptions
Manuals and recipes
EATS Broker recommends that any restaurant owner considering selling a restaurant business contact a Restaurant Broker for a restaurant valuation. The process of selling a restaurant is like a slow cooker and not like a pressure cooker.
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
