Bring your own bottle (BYOB). Is it good for restaurants?
Bring your own bottle (BYOB) policy can be good for restaurants, but it also has some significant downsides. If a restaurant has a BYOB policy, customers are allowed to bring their alcoholic beverage of choice to the restaurant. Strict licensing requirements and high taxes on alcohol sales have made the idea of restaurant owners to offer a Bring your own bottle (BYOB) popular.
Dallas Restaurant Broker Dominique Maddox says, “BYOB restaurants and bars are popular in Texas; this is a practice not commonly seen in Georgia, where I relocated from last year to Dallas, Texas. The concept of providing customers the freedom to BYOB is growing in cities like Philadelphia, Boston, Phoenix, and Dallas Fort Worth”.
EATS Broker provides a list of the pros and cons of owning a BYOB restaurant:
Pros:
-Does not require a state license to serve liquor (restaurant owners may have a beer and wine license). Restaurant owners can save money by not paying for a full liquor license.
-Can charge a corkage fee, usually, $3-$10 is the average cost, but the cost can go up to $20-35 depending on the city and state.
-Buyers tend to spend more money on food and desserts
-Customers like the freedom to bring their drink
-Can charge for glassware or mixture to compliment their drinks
-There are no statewide BYOB laws in Texas
-Less storage space is needed in the restaurant for liquor inventory
Cons:
-Liquor and cocktails are high-profit margin items on the menu
-When it’s time to sell the restaurant, BYOB concepts can be hard to resell to a buyer that prefers to have a full liquor license.
-Buyers can take advantage of the policy and order minimal food
-The server’s/waiters tips might be affected by lower check averages
-Customers can complain about the corkage fee
For more information on the restaurant market and other available consulting services or a complimentary restaurant valuation, contact Dallas Restaurant Broker Dominique Maddox at 404-993-4448 or email at sales@eatsbroker.com. Visit our website at www.EATSbroker.com.
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3 Mistakes to Avoid in Selling Your Restaurant
Selling a restaurant can be a complicated process. What are the mistakes to avoid when selling your restaurant? The Restaurant Broker at EATS Broker has been selling restaurants for over ten years. This blog will provide insights for restaurant owners thinking about selling a restaurant.
Mistake #1 Listing your restaurant for sale too late
Ask the Dallas Restaurant Broker when it is time to list your restaurant for sale. The response will be when you start to think about it. It takes an average of 6-8 months to sell a restaurant in today’s market. Even once listing a restaurant for sale, it’s a process to get sold.
It’s human nature that once a person has decided the restaurant industry demands are not for them, the restaurant becomes a mental and physical burden. When people decide they are tired, bills are hard to pay, and mentally checking out, it’s time to sell a restaurant.
Restaurant Broker advice: Call a Restaurant Resale Specialist for a complimentary restaurant valuation. Discuss your options to list your restaurant for sale before deciding to close the doors to your restaurant forever.
Mistake #2 – Going to market without Good Books and Records
It’s a common saying, “time kills deals.” Once a buyer is interested in a restaurant for sale, it’s essential to provide the buyer with accurate financials. When a seller goes to market without the ability to give a buyer up-to-date tax returns and profit and loss statements, it always kills a deal.
Restaurant Owners that decide to list a restaurant for sale without the capability of providing financials in a timely matter are making a big mistake. The buyer will request some financials before making an offer and more during the due diligence.
Mistake #3 – Closing the doors
Buyers like to see the lights on, customers coming in the doors, and the cash register ringing. One of the biggest mistakes is to get a restaurant valuation and list your restaurant sale, only to close the doors months later.
Once a restaurant is closed reduces the value in the buyer’s mind. Instead of getting a turn-key restaurant, they are getting used equipment and rights to the lease. These types of transactions are harder to sell. 41% of buyers will be 1st-time restaurant buyers and favor an open restaurant.
Restaurant Broker advice:
List your restaurant for sale months before you decide to close the doors. Contact a Restaurant Resale Specialist to discuss the value before deciding to close your restaurant.
To learn more about EATS Broker consulting services or to receive a complimentary restaurant valuation, contact Dallas Restaurant Broker Dominique Maddox at 404-993-4448 or by email at sales@eatsbroker.com. Visit our website at www.EATSbroker.com.
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When to sell a restaurant? 8 reasons why that start with D!
When to sell a restaurant is a difficult decision for most restaurant owners. Interesting fact that the reason a restaurant owner wants to sell a restaurant usually will start with the letter D! Buyers are always curious about why a restaurant owner wants to sell a restaurant?
The Dallas Restaurant Broker at EATS Broker explains the most common reasons to sell a restaurant. There 8 reasons to sell a restaurant:
1. Debt– A restaurant owner has multiple forms of debt. All these forms of debt can affect a restaurant owner mentally and physically. One of the biggest concerns of a restaurant owner is to avoid bankruptcy and sell a restaurant for a profit.
-Landlord Debt
-Bank loan Debt
-Vendor Debt
-EIDL Loan Debt
-PPP Loan Debt
-UCC lien
2. Disability- There are many types of disabilities, such as intellectual, physical, sensory, and mental illnesses.
3. Divorce- Restaurant ownership’s demanding physical and financial requirements can break up a happy home and lead to divorce. Many restaurants depend on an owner/operator to be present to be successful.
It’s common for a restaurant owner to work 50-60 hours a week and work on the holidays. The life of a restaurant owner requires sacrifices from the family and owner.
4. Death- Everybody deals with recovering from death differently. The thought of restaurant ownership after death could seem impossible.
5. Disinterest– It’s easy to get disinterested in a restaurant that is unsuccessful or doesn’t live up to the restaurant owner’s dreams.
6. Declining Sales- This is one of the biggest reasons for selling a restaurant business. Inflation is at an all-time high, labor costs are exploding, and rents keep increasing.
7. Dissension among owners-Once partnerships start to be unproductive, and the relationship between parties starts to crumble, it’s time to sell your restaurant.
8. Disaster- The pandemic is a good example of a disaster that happens and changes everything.
**Delivery of a child would be another good reason for selling a restaurant business**
To learn more about EATS Broker consulting services or receive a complimentary restaurant valuation, contact Restaurant Resale Specialist Dominique Maddox at 404-993-4448 or email at sales@eatsbroker.com. Visit our website at www.EATSbroker.com.
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Restaurant Broker Dominique Maddox of EATS Broker sells two Schlotzsky’s
Restaurant Broker Dominique Maddox of EATS Broker sells two Schlotzsky’s franchises in Galveston, Texas. EATS Broker represented the seller and buyer for this transaction.
The seller, a multi-unit owner, had experience selling their restaurants for sale by the owner in the past. After researching EATS Broker, they decided to give the Restaurant Brokerage Firm located in Dallas, Texas, an opportunity.
Texas Restaurant Broker Dominique Maddox says, “I really enjoyed this transaction. The seller was previously For Sale by the Owner. After a free phone consultation and a free restaurant valuation, they decided my Restaurant Brokerage was the best choice.
When I decided to start my Restaurant Brokerage in October 2019, I was challenged with a 2-year non-compete agreement in Georgia (which expires in October 2022). Low startup funds and the pandemic starts six months; later, in March 2020!
I will be forever thankful to Mr. Jain and his organization for giving my company an opportunity. This was my first Texas Restaurant for Sale I have sold since my relocation to Dallas, Texas”.
The buyer has an established history of success in the local market. Upgrades to the exterior and interior of both restaurants are coming soon. The new owner acquires the franchises for sale at the perfect time; summer tourism is booming in Galveston, Texas, right now!
Galveston is an island city on the Gulf Coast of Texas. It’s known for its restaurants that line Galveston Island Historic Pleasure Pier on the south shore. West is bird-rich Galveston Island State Park, with its trails, kayak launches, and fishing spots. Stewart Beach and East Beach are on the island’s eastern end.
For more information on the restaurant market and other available consulting services or a complimentary restaurant valuation, contact Dallas Restaurant Broker Dominique Maddox at 404-993-4448 or email at sales@eatsbroker.com. Visit our website at www.EATSbroker.com.
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Preparing to Sell a Restaurant-What you Should Know
The decision to sell a restaurant is the first step and figuring out how to sell a restaurant is the second step. When preparing to sell a restaurant, what should you know before starting the process?
Baby boomers at record numbers are planning to retire and want to sell a restaurant. The preparation to sell a restaurant can start a year in advance, but mostly it happens unplanned or forced to happen.
What makes a restaurant for sale listing attractive to buyers? EATS Broker explains the key factors that make restaurant for sale listings stand out from the crowd.
What makes an excellent restaurant for sale listing?
- Does the restaurant make a profit?– Profitable Restaurants have a greater chance of being sold than unprofitable restaurants. Only 20%-30% of restaurants listed for sale on www.Bizbuysell.com are sold. Restaurants for sale that show a profit stick out from the crowd and make themselves attractive to buyers.
- Has an excellent Restaurant Story– Part of branding for a restaurant is being able to tell the restaurant’s story. The largest Franchise brands in the world make sure that people understand the company’s story.
The Dallas Restaurant Brokers says, “The restaurant’s story is vital to a company’s success. People relate to stories and remember stories. Independent-owned restaurants need to do a better job of telling the restaurant story. I suggest that any restaurant focus on the following points:
- How did the restaurant get started?
- Family-owned business?
- Where did the recipes come from?
- What makes the restaurant different than other restaurants?
- How is the cooking method different?
- Can anybody operate? When selling a restaurant, it should be set up where anybody can handle the restaurant. Several Corporate America refugees are entering the restaurant industry, and most don’t have restaurant experience. How can you sell a restaurant to an individual that doesn’t have experience?
- Create systems and templates
- The restaurant should be easy to operate
- If the restaurant is a Chef-driven concept, make sure to have a Sous chef and replacement chef for the next owner
- Provide training to the new buyer
To learn more about EATS Broker consulting services or to receive a complimentary restaurant valuation, contact Texas Restaurant Broker Dominique Maddox at 404-993-4448 or by email at sales@eatsbroker.com. Visit our website at www.EATSbroker.com.
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Questions to ask when Buying a Restaurant Franchise Resale
Customers that are buying a Restaurant Franchise resale do intensive research on the restaurant for sale opportunity but not enough research about the Franchise Brand. The relationship between a Franchisee and Franchisor is a business marriage that can end in success or divorce.
Franchise Brands provide the franchise disclosure document (FDD) to individuals interested in becoming a Franchisee. The FDD is the blueprint on how the working relationship between Franchisee and Franchisor will work.
Franchisors must provide the potential Franchisee with the FDD at least 14 days before it can be signed or any money transferred. It’s a great time to ensure potential restaurant buyers get some critical questions answered.
Dallas Restaurant Broker Dominique Maddox says, “most restaurant buyers only think about the royalty fees, marketing fees, transfer fees, and restaurant upgrades required.
When Buying a Restaurant Franchise for Sale, I think buyers should be focused on researching and asking questions about the Franchisor, Franchise Support Services, and operations.
The Restaurant Broker at EATS Broker provides a list of critical questions that should be answered or considered before buying a restaurant franchise for sale.
-How long has the Franchisor been franchising?
-What is the experience of the Management Team?
-What is the expansion strategy of the Franchisor?
-What is the Franchisee selection process?
-How long is the term of the Franchise Agreement?
-What does the initial training consist of?
-Does the Franchisor have a preferred food supplier?
-What makes the product unique?
-What is the brand position within the category?
-What is the market demand for the product?
-Have unit sales been decreasing or increasing?
-How many units does the Franchise have open?
The Franchise Disclosure Document (FDD) has some of the answers to these questions above but does not have them all.
To learn more about EATS Broker consulting services or to receive a complimentary restaurant valuation, contact Texas Restaurant Broker Dominique Maddox at 404-993-4448 or by email at sales@eatsbroker.com. Visit our website at www.EATSbroker.com.
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Dominique Maddox featured in Voyage Dallas Magazine
In the February issue, the founder and President of EATS Broker Dominique Maddox was featured in VoyageDallas magazine Local Stories. This is Dominique’s second time being featured in the Voyage magazine; he was featured in VoyageAtlanta in 2020.
Voyage Dallas magazine’s goal is to highlight the best of Dallas people, businesses, organizations, and events. The Voyage Group of Magazines is based out of Los Angeles; they have magazines that feature local hidden gems in multiple states.
The company’s mission is to build a platform that fosters collaboration and support for small businesses, independent artists and entrepreneurs, local institutions, and those making different cities interesting.
Dallas Restaurant Broker Dominique Maddox says, “the opportunity to be featured in VoyageDallas is a blessing for my company. The article allows people to get to know me personally and learn more about EATS Broker.
I talk about my struggles as a Restaurant Broker and starting my Restaurant Brokerage firm. I moved from Atlanta, GA to Dallas, TX in August 2021 to grow my business”. http://voyagedallas.com/interview/exploring-life-business-with-dominique-maddox-of-eats-broker/
EATS Broker is a boutique restaurant brokerage specializing in exclusively selling restaurants, bars, and nightclubs. Our brokerage is known as Restaurant Resale Specialists that are Subject Matter Experts in the selling a restaurant and the buying a restaurant process.
We help our clients through the complex process of buying or selling a restaurant. Our company specializes in selling Restaurant Franchise Resales and Restaurant ReSales. We also help clients with Restaurant real estate site selection, Tenant Representation, Franchise Consulting, and Restaurant Price Evaluations.
To learn more about EATS Broker consulting services or receive a complimentary restaurant valuation, contact Dallas Restaurant Broker Dominique Maddox at 404-993-4448 or by email at sales@eatsbroker.com. Visit our website at www.EATSbroker.com.
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Restaurant Broker- What I like about the business
Restaurant Broker what I like about the business is a blog written from my viewpoint after being a successful Restaurant Resale Specialist for almost ten years.
I’m currently the Founder and President of EATS Restaurant Brokers, a brokerage firm specializing in selling Franchise Resales, independently owned restaurants, bars, and nightclubs.
The problematic fact about being a Restaurant Resale Specialist is that the average time to sell a restaurant is 6-8 months. The harsh reality is that only about 20%-30% of all restaurants listed for sale will actually sell to a new buyer. Most locations will be closed and returned back to the landlord.
The average survival time for a Restaurant Broker working full-time as a Restaurant Resale Specialist is less than 2 years.
You might be asking yourself, what do I like about the business if everything is negative?
My career as a Restaurant Broker started in 2010; I was told during the interview that it would take 6-8 months before I received a commission. I was broke at the time, but I believed in myself, and I was interested in becoming a franchise resale specialist.
Fast forward to October 2021, and EATS Restaurant Brokers is based out of Dallas, Texas. Our company sells restaurants in over 15 states. We hold a Brokers Real Estate License in Texas and Georgia.
EATS Restaurant Brokers and www.EATSbrokers.com, only established in 2019, have quickly become a popular resource as a franchise resale specialist and restaurant broker nationwide.
What do I like about the business as a Restaurant Broker?
- Affect Peoples Lives– People usually want to sell a restaurant because of personal reasons. When a restaurant owner can sell a restaurant, their personal life is generally affected positively.
The restaurant owner’s life can be draining on an individual’s personal life. Sometimes selling a restaurant will help multiple personal issues, but it can’t solve all problems.
On the buyer side, they have just realized the American Dream of business ownership. Buyers come into restaurant ownership with new energy and commitment to be successful. Buyers are fulfilling a life dream, buying for income, having a family recipe, and etc.
- Selling restaurants in multiple states– Every state requires a real estate license to sell real estate or real property but doesn’t for the sale of a business. Currently, 19 states require a Business Broker to hold a real estate license in the state to sell restaurants; most are located on the West Coast.
EATS Restaurant Brokers sells restaurants in Texas, Georgia, Oklahoma, Iowa, Missouri, Indiana, Ohio, Kentucky, Tennessee, Arkansas, Louisiana, Kentucky, North Carolina, South Carolina, Virginia, and Alabama.
- Eating at Various Restaurants– I’m a self-proclaimed Foodie, so I choose the right industry. Part of my job description is to try several different restaurants weekly. When I’m working with a client or trying to become a franchise resale specialist for a Franchisor, I like to experience the food.
This year I flew to Indianapolis, IN, to visit a client that owns a franchise restaurant and drove to Clark County, OH, to meet with another client and enjoyed some great BBQ.
For more information on the restaurant market and other available consulting services or restaurant valuations, contact Dallas Restaurant Broker Dominique Maddox at 404-993-4448 or by email at sales@eatsbrokers.com. Visit our website at www.EATSbrokers.com
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Restaurant Resales are HOT right now
Restaurant Resales are HOT regarding buyer’s demand as restaurant sale prices jump 34% in 2021 compared to 2020. BizBuySell’s Insight Report just released its report for Quarter 2 of 2021. Restaurant resale numbers are showing very promising growth and buyer interest. Restaurant resales headline growth as the buyer market seeks reopening opportunities.
Now with restrictions lifted across most industries, buyers are turning to restaurant acquisitions. Restaurants, specifically, was a sector that was drastically affected by the shutdown is coming back strong. While transactions are up 38% over the same time last year at the height of pandemic lockdowns, they are still 16% below Q2 2019 pre-pandemic levels leaving further room for recovery, according to BizBuySell Insight Report.
The restaurant for sale sector sees growth, with restaurant acquisitions up 17% in the second quarter of 2021. In addition to the bounce back in transactions, sale prices increased 34% versus Q1, tied to a 20% increase in median cash flow, according to BizBuySell Insight Report.
Dominique Maddox of EATS Restaurant Brokers says, “Labor Shortage, former employees seeking independence, and restaurant owners seeking retirement are increasing the number of restaurant acquisitions on the market.”
Restaurant Sellers and Restaurant Brokers will be happy to know that restaurants for sale during quarter two of 2021 had 190 median days on the market compared to 219 days quarter two of 2019. This data shows that restaurants are popular when it comes to buyer demand.
Dine-in establishments are expected to increase in market value as restaurant restrictions are lifted in most states. They are at the same time experiencing pressure for the labor shortage. A majority of restaurants have made tough decisions that have included reducing operating hours, closing for days, or going out of business.
The business-for-sale market continued to make gains in the second quarter of 2021, with closed transactions up 5% over the previous quarter. For bargain hunters, this may signal a closing window of the great opportunities made available a year ago, according to BizBuySell’s Insight Report.
For more information on the restaurant market and other available consulting services or a complimentary restaurant valuation, contact Dominique Maddox at 404-993-4448 or by email at sales@eatsbrokers.com. Visit our website at www.EATSbrokers.com.
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EATS Restaurant Brokers Checklist for Selling a Restaurant
Selling a restaurant when you have a checklist can make the process simplified and less stressful. When a restaurant owner wants to sell a restaurant, they mainly only consider gathering financial information.
The process of selling a restaurant requires the restaurant owner to produce numerous documentation and information that can be hard to find.
EATS Restaurant Brokers Rule #1 – Don’t list a restaurant for sale without gathering all the information a buyer will need or might ask for during the buying process.
EATS Restaurant Brokers provides a checklist for a selling restaurant besides the financial information:
When listing a franchise restaurant for sale, some critical information to provide to a Restaurant Broker besides your financials:
- Franchise Disclosure Document (FDD)
- Franchise Agreement years remaining
- Transfer Fee for franchise
- Assignment Fee for Lease
- Required training for a new franchisee
- Upgrade cost for restaurant
- POS sales upgrade requirements
- Equipment List-only items owned by the seller
- Business Entity name registered with the state
- Franchise renewal fees
- Royalty Fees/Marketing Fees
- Provide information on employees FT/PT (work schedule, pay rate)
- Copy of Lease and all amendments
- Size of Grease Trap
- Size of hood system
- 3rd party delivery service provider
When listing an independently owned restaurant for sale, some critical information to provide to a Restaurant Broker besides your financials:
- Copy of Lease and all amendments
- Assignment Fee for lease
- Equipment List-only items owned by the seller
- Utility Providers contact information
- Business Entity name registered with the state
- Provide information on employees FT/PT (work schedule, pay rate)
- Size of Grease Trap
- Size of hood system
- 3rd party delivery service provider
Dominique Maddox of EATS Restaurant Brokers says, “ listing a restaurant for sale requires the restaurant seller to be involved and provide a considerable amount of information.
Restaurant owners should start the process of gathering all the information needed to list a restaurant for sale before contacting a Restaurant Broker”.
Some of the most significant purchases the average American makes will have a checklist with a list of tasks, items to collect, and a roadmap to the finish line. The process of selling a restaurant should have a checklist to follow.
EATS Restaurant Brokers Checklist for selling a restaurant was made with the intent to help any current or future restaurant seller. Restaurant buyers will also benefit from this blog and start asking for more items.
Selling your restaurant can be difficult if you are not prepared. For more information on the restaurant market and other available consulting services or a complimentary restaurant valuation, contact Dominique Maddox at 404-993-4448 or by email at sales@eatsbrokers.com. Visit our website at www.EATSbrokers.com.
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