Restaurant Seller and Buyer Meeting: Tips for Success
EATS Restaurant Brokers decided to create a Restaurant Seller and Buyer Meeting-Tips for Success checklist. The initial meeting between the buyer and a seller can dictate how the working relationship will be in the future.
The goal of the initial meeting is to familiarize both Restaurant Seller and Restaurant Buyer, view the back of the house, buyers get an opportunity to ask probing questions and review restaurant financials. The most straightforward deals are when the buyer and seller like and respect each other. When the personalities don’t mix, the restaurant closing process could be filled with turbulence.
Dominique Maddox of EATS Restaurant Brokers says, “ The best method to minimize differences in personalities is to keep the deal flow managed by a specialized trained Restaurant Broker. When Restaurant Sellers and Buyers communicate directly without a skilled Restaurant Broker, a deal can crumble quickly”.
EATS Restaurant Brokers 7 Tips for a Successful Seller and Buyer meeting.
- Buyer and seller should both have face masks on, even if social distancing is done.
- Walk around the restaurant to get the seller talking and to get the buyer more comfortable. Great way to break the ice between parties.
- We recommended starting with the back of the house (BOH) to show the kitchen area and cooking equipment. This task can range in time depending on the size of the restaurant and restaurant owner explaining items.
- Sit down for a meeting- This is a great time to introduce each party to start talking about why one party wants to sell and the buying party to explain the interest in buying.
- The sit-down meeting allows the buyer to ask questions about the restaurant operations, restaurant equipment, lease, employees, financials, and willingness to negotiate on price.
- Restaurant sellers should be prepared to explain the Cost of Goods (COGS), Labor, Sales, and potential to increase sales.
- Buyer should review financials before meeting with the seller. The buyer should come to the meeting with prepared questions to ask the seller.
- Follow-up questions after the meeting should be directed to Restaurant Broker to share with the seller.
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@eatsbroker.com. Visit our website at www.EATSbroker.com.
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Dominique Maddox of EATS Broker sells Hungry Howie’s Pizza Franchise
Dominique Maddox of EATS Restaurant Brokers sells Hungry Howie’s Pizza . EATS Broker represented the buyer and seller.
The buyer is a Michigan native that was raised on Hungry Howie’s delicious pizza. When the opportunity came available to purchase the Hungry Howie’s Pizza, Mike jumped on the opportunity. The restaurant has been closed since June, Mike has returned from his 4-weeks of corporate training in Michigan and is ready to re-open the business!
The buyer provided EATS Restaurant Brokers with the following Google Review, “ Process was very easy, and each step was explained. I was updated throughout the purchase and communication was great. Very impressed”.
Dominique Maddox of EATS Broker says, “ this transaction was a perfect match! The Hungry Howie’s reminded the buyer of his childhood memories of eating pizza. He saved this business that was recently closed, and now the surrounding community and Kennesaw State University students can enjoy Hungry Howie’s Pizza again”.
Dominique Maddox is the President and Founder of EATS Broker and www.EATSbroker.com, a business brokerage firm specializing exclusively in restaurant franchise resales, restaurants for sale, bars, and nightclubs. After working with one of the nation’s largest restaurant brokerage firms for seven years, Dominique decided it was time to bring a new flavor to the Restaurant Brokerage Industry and founded EATS Broker.
Dominique Maddox has been selling restaurants since 2010 and has undergone intensive training in the Restaurant Brokerage Industry. Dominique attended Morehouse College on a football scholarship, he brings that same competitive spirit and energy to the field of restaurant brokerage.
EATS Restaurant Brokers are Restaurant Resale Specialists that can guide you thru the complex process of buying or selling a restaurant.
Thinking about selling a restaurant contact EATS Broker. 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 sales@eatsbroker.com. Visit our website at www.EATSbroker.com
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Thinking about Selling a Restaurant?
Do you have an exit plan when it’s time to sell? Thinking about selling a restaurant is only the beginning of a process that can take 6-12 months to complete. Preparing a restaurant properly before hitting the sales market can make the difference between, receiving a solid offer from a buyer or selling at a considerable loss.
The lack of details when it comes to the presentation of the restaurant will make all the difference between a restaurant selling or not. On an average only 30%-40% of restaurants listed actually sell to new ownership.
Improve your changes of your restaurant selling by following the EATS Restaurant Brokers–How to prepare a restaurant for sale TIPS:
Tangible Items:
Back of House– Make sure all equipment is cleaned and in working condition. Clean the hood systems, service the high-ticket equipment, and CLEAN. Remove any items that are not working or can be seen as an eyesore. Make a list of any items that are leased with the vendor’s contact information with pricing and terms.
Front of House– Remove furniture, tables, and chairs that are dirty, broken, or torn. Hire a professional cleaning company to clean carpet, flooring, walls, windows, if you can afford. Remove decorations that can be seen as dated or that are dirty or broken. Clean or updated bathrooms.
Mechanical Systems– Have an HVAC company service HVAC system and keep documentation.
Non-Tangible Items: Documentation is not only needed it’s required!
Financial Books and Records- When it comes time to prepare a restaurant for a potential sale, restaurant owners need to buckle down and collect and organize financial information. Clean financial records are one of the most important factors in selling a restaurant for top dollar.
Most buyers will want to see three years of Profit and Loss statements, and year-to-date monthly profit and loss statement. Once the buyer has signed the non-disclosure agreement and provided the Restaurant Broker with proof of funds, they want the financial information ASAP. Time KILLS deals, financial documents should be prepared to share once the buyer has been financially qualified.
Professionally trained Restaurant Brokers only represent the financial information provided to the IRS and not the 2nd set of Books of Records that is unreported.
Menus & Recipes- Create a recipe manual with all the recipes and measurements to provide to the new buyer. Restaurants that come with systems and manuals are more attractive to buyers that are new to restaurant ownership.
Vendor List- Create a vendor list to provide to the new buyer. The vendor list should include all utility companies, food vendors, and other vendor’s company name, contact information, and any lease arrangements with monthly price.
Equipment List- Create an equipment list for only items that a buyer can lift and take with them if they decide to move locations. Do not include any items that the landlord owns, these items will include attached fixtures like hood systems, walk-in coolers, sinks, and grease trap.
A professional trained Restaurant Brokers can assist restaurant owners in the preparation of listing a restaurant for sale. A Restaurant Broker with help with the overall marketing package for the restaurant to be listed on the buyer market for sale.
Who has time to pre-qualify prospective buyers, educated restaurant buyers about the buying process, and help all parties reach the closing table? The answer is a Restaurant Broker!
Thinking about selling or buying a restaurant contact EATS Broker. 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 sales@eatsbroker.com. Visit our website at www.EATSbroker.com
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Dominique Maddox of EATS Broker sells Sidebar
Dominique Maddox of EATS Broker Sells Sidebar. EATS Broker represented buyer and seller. The new owner Chan will reopen Sidebar in the next 60 days. Sidebar was affected by Covid-19 and doors have been closed since March. Chan plans to make some improvements inside, improve marketing, and keep the legacy of Sidebar alive.
Dominique Maddox of EATS Broker says, “ this transaction was extremely satisfying because I helped a seller out of a tough financial position. Sidebar has been part of the Atlanta Downtown community for over 15 years. I can remember visiting as a customer while in college”.
Dominique Maddox is the President and Founder of EATS Broker and www.EATSbroker.com, a business brokerage firm specializing exclusively in restaurant franchise resales, restaurants for sale, bars, and nightclubs. After working with one of the nation’s largest restaurant brokerage firms for seven years, Dominique decided it was time to bring a new flavor to the Restaurant Brokerage Industry and founded EATS Restaurant Brokers.
Dominique Maddox has been selling restaurants since 2010 and has undergone intensive training in the Restaurant Brokerage Industry. Dominique attended Morehouse College on a football scholarship, he brings that same competitive spirit and energy to the field of restaurant brokerage.
EATS Broker are Restaurant Resale Specialists that can guide you thru the complex process of buying or selling a restaurant. EATS Restaurant Brokers is a full-service Real Estate Business Brokerage practice focused on the restaurant industry. Our company specializes in selling Restaurant Franchise Re-sales and Restaurant Sales. We also help clients with Restaurant real estate site selection, Tenant Representation, Franchise Consulting, and Business Price Evaluation.
Let us show you how Restaurant Brokerage is done with flavor!
Thinking about selling a restaurant contact EATS Broker. 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 sales@eatsbroker.com. Visit our website at www.EATSbroker.com
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Why do I need to show proof of funds
Did you know the statement “proof of funds” is not in the Merriam Webster dictionary? This information is interesting because the words, “proof of funds” are used daily in the Business Brokerage world.
Proof of Funds (POF) demonstrates how much money a person or entity has available in liquid assets. When purchasing a restaurant, you may need documentation showing your Proof of Funds to show the Seller or Listing Broker that you can cover the purchase costs of the restaurant transaction.
Dominique Maddox–Restaurant Broker and Founder of EATS Broker says, “I have experienced some serious heartburn from deals that I did not require a buyer’s proof of funds upfront. Restaurant Listings that are franchises with financial requirements, high-income listings, and SBA approved deals, I will require proof of funds before providing seller’s financials”.
A good Restaurant Broker will pre-approve buyers before sending the seller’s sensitive financial information to buyers for review. EATS Broker usually requires proof of funds in the form of a bank statement, 401 K statement, or letter from Bank. Once we have received the buyer’s financial information, we will send the restaurant name and profit and loss statements for review.
Proof of Funds should have the following information:
- Name of the account holder
- The balance of funds
- Date- needs to be within 3 months
- Letter from the bank-requires banker’s contact information
- Account Number is not needed
Proof of Funds not accepted
- Personal Financial Statement
- Copy of partner’s financials-if not involved in the deal
- Copy of mother’s or father’s 401K statement, but they are not part of the deal
- Copy of bank statement with balance amount blacked out
- Copy of a company’s Profit and Loss statement
- A verbal statement- I have more than enough to buy this business
- A verbal statement-I’m not showing my proof of funds until I see the restaurant’s financials
- A bank statement below the required liquid asset requirement
EATS Restaurant Brokers works with two different types of buyers. 1st the buyer that is willing to send proof of funds, and 2nd the buyer that doesn’t want to show proof of funds. Whom do you think a Restaurant Broker would prefer to work with and will respond to faster?
Some buyers feel entitled to view the seller’s financial information just because the restaurant is for sale. Imagine a buyer requesting a personal viewing for a home but doesn’t want to show their personal financial information.
EATS Broker advice to any buyers looking to purchase a restaurant have your proof of funds ready to show. Restaurant Brokers are looking for RAW(ready, able, and willing) buyers to convert into a closed transaction. Restaurant Brokerage is a 100% commission sales job, the buyers that are serious and ready to show proof of funds get the best customer service.
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 sales@eatsbroker.com. Visit our website at www.EATSbroker.com
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Steps to Start a Business
American Business is overwhelmingly Small Business According to data from the Census Bureau’s Annual Survey of Entrepreneurs. There are 5.6 million employer firms in the United States and 89% have fewer than 20 workers. The Steps to Start a Business can be challenging and time consuming for potential entrepreneurs.
While doing my research I decided I wanted to become an entrepreneur and open my own Restaurant Brokerage Firm. I knew after working with one of the nation’s largest Restaurant Brokerage Firms for over 7 years as a Sales Development Manager and Restaurant Broker, I was qualified to be my own Broker!
This blog is about my experience during my first 90 days since I opened EATS Restaurant Brokers. The challenges have been monumental at times, the setbacks have been hurtful, but the rewards have overshadowed all the negative the obstacles. I have listed some important steps I had to complete and a mistake I made during the process.
Organize Business Entity
The first obstacle was establishing the business entity. The first items I addressed in order are listed below:
– Drafted a Business Plan
– Set up Business Structure
– Set up Business License- create the company name
– Applied for an EIN (Employee Identification Number)
– Set up Business Account
– Set up an accounting system for debits and credits
– Created a Marketing Plan
– Created a Marketing Budget
Create a Website
The presentation of your business can make or break your business in the beginning stages of a company start-up. Like most start-up companies I was trying to save money any way that I could. I first used a Website developer based out of India, the prices were affordable and the websites this company produced looked good.
Once I paid my money and provided content and pictures for my website, it was completed in about 4 weeks. The website was active for one week before I started to have issues. After three weeks my website had an error message, I could not get in contact with the website developer.
Once I knew I have got scammed I quickly found a website developer located in the USA that specialized in Business Broker websites. The website development team made the process simple and my new website was down six weeks later. I paid double the price of my previous website but the quality is so much better.
It’s true you get what you pay for!
Marketing
Getting customers is the difference between closing the doors and succeeding. I did not start my business with a huge marketing budget.
I’ve spent countless hours cold calling restaurant owners, sending emails, sending mailers, and networking to get restaurant seller leads. Branding myself on social media and blogging has been time-consuming activities but have been successful in getting leads.
The marketing aspect of my business as a Restaurant Brokerage has been a challenging learning experience. The freedom to be creative with my marketing has been the most satisfying reward for opening my business.
There are more than 28 million small businesses in the United States, making up a whopping 99.7 percent of all U.S. businesses, according to the Small Business Administration. I’m glad that EATS Restaurant Brokers is one of those companies!
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 sales@eatsbrokers.com. Visit our website at www.EATSbrokers.com
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