How to Sell a Franchise Restaurant?
The decision to sell a franchise restaurant can be challenging in today’s market. The good news is that if you own a Restaurant Franchise, buyers are lining up with interest. Close to 60%-70% of the restaurants for sale in Georgia that sell are franchise concepts.
Franchise concepts are growing right now, while independent owned restaurants are declining. Franchise Restaurants are popular because they come with a proven system, support, business model, logo, IT support, and reputation.
When it is time for a Franchisee to exit the business, they have a couple of choices on how to sell their restaurant. One of the most significant considerations when selling a franchise restaurant is, do I sell to a current franchisee? Or do I sell to a non-franchisee?
Dominique Maddox, a Restaurant Broker and Founder of EATS Broker says, “ selling a franchise restaurant to a current franchisee is much different from selling to a new franchisee. Current franchisees understand the brand; new franchisees need much information to educate them on the Franchise Brand, process, qualifications, training, and closing process”.
Who do you sell your restaurant to, a current Franchisee or a Non-Franchisee? EATS Broker discuss the Pros and Cons:
PROS Selling to an existing Franchisee:
-Dealing with an educated buyer about the franchise
-Has already been approved by the franchise
-The capability of closing a deal fast because they don’t require the standard 4-6 weeks training.
CONS of Selling to a current Franchisee:
-They usually undervalue the business
– They understand the operation of the franchise brand
-They are harder to impress
-It can be challenging for them to get financing
PROS Selling to a Non-Franchisee:
– Can get a higher offer price
– They are excited about the new opportunity
– Usually are not experienced, restaurant owners
– Can sell them the opportunity for growth or proven sales numbers
CONS Selling to a Non-Franchisee:
– Lots of education about the buying process is needed
– Have to get approved by Franchisor
– Have to do the required training before a new franchisee can complete the sale. Training process is usually 4-6 weeks
– Closing process can take 2-4 months
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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How to Sell a Restaurant- Telling the story
How to sell a restaurant in today’s market only months after the Covid-19 pandemic crippled the restaurant industry is a challenging task. EATS Broker understands selling a restaurant is just not about the tangible items or the goodwill. Buyers in today’s market want to know what the story is of the restaurant. How has covid affected restaurant sales?
Dominique Maddox a Restaurant Broker and Founder of EATS Broker says, “when I take a restaurant for sale listing, I want to know the story about the restaurant. Every Business Broker can look at the Profit and Loss statements, but most cannot tell the story of the restaurant to a buyer, because they did not ask the owners the right questions”.
When I am Telling the story of a restaurant, I want the potential buyers to understand the strengths, historical success, and possible future of a restaurant”.
EATS Restaurant Brokers provides tips to restaurant owners for “Telling the story”
1st Review the financial numbers from 2019 and get a monthly average for the sales, compare the numbers to the 2020 sales numbers. How much of a monthly decline or increase do you notice? In the past 3-months how close are monthly sales averages compared to 2020?
EATS Restaurant Brokers advice: If your sales have declined from 2019 to 2020, know your historical success. Is March-May your busiest months and your business was affected negatively by the pandemic? How were your monthly sales history from 2017-2019? What areas of your business were affected the most dining in, catering, and how are those areas now affecting sales now?
2nd Restaurant owners should understand the SWOT analysis of the business before they list for sale. SWOT analysis is a strategic planning technique used to help a person or organization identify strengths, weaknesses, opportunities, and threats related to business competition or project planning.
Restaurant owners should be about to tell the story about the strengths and opportunities of the restaurant. The strength of the business is the “Sizzle”, meaning why should a buyer considering purchasing the restaurant. Think about how is your social media, how does your menu look online, do you have Google Reviews?
EATS Restaurant Brokers advice: Provide your Restaurant Broker with selling points about your business that would encourage a buyer to purchase your restaurant. Provide information on expenses that can be reduced ex. Food cost or labor cost. What changes can be made to improve the business, and why should a buyer make the changes?
Selling a restaurant is an art and science at the same. Telling the story of the restaurant helps a buyer understand the strengths, opportunities, and value of the business. Next time you want to sell your restaurant do not just list it for sale, tell the story!
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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Dominique Maddox of EATS Broker sells Papa’s Pizza To Go Franchise
Dominique Maddox of EATS Broker sells Papa’s Pizza To Go located at 3064 US-76, Hiawassee, GA 30546. EATS Broker represented buyer and seller.
The Gagnon’s were the sellers of the business, they plan to move to Florida to retire, after operating the business since 2009. The buyer ironically is moving from Florida to Hiawassee, Georgia. The buyer likes the lifestyle in Hiawassee and was tired of the Florida sun.
Dominique Maddox says, “ This is an interesting story of someone moving from Florida to buy a business in the beautiful mountains of Georgia, and the sellers are moving down south because of the weather. It’s common in the restaurant brokerage industry that a buyer located in a different state buys a restaurant in a different state and moves to that state to operate”.
Dominique Maddox is the President and Founder of EATS Restaurant Brokers 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.
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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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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Day in the life of a Restaurant Broker
What does a Restaurant Broker actually do daily? Dominique Maddox Founder and President of EATS Broker shares his thoughts about the Day in the life of a Restaurant Broker.
Restaurant Brokerage is like a BIG secret fraternity where there is limited membership allowed. A large number of people don’t know the responsibilities or tasks a Restaurant Broker has daily. I decided to track my activities on 9/11/2020 in a writing log.
5:15 am – Wake up and put on the 1st pot of coffee and drink water. Review my Cash Scoreboard with my to-do list for the day. Add any items that come to mind.
6:00 am- Arrive at the gym and go beast mode to get ready for the day.
7:15 am- Review closing documents, send reminder emails to buyers and sellers. Send wiring instructions to the closing attorney for all parties.
7:45 am – On the road to take pictures of a restaurant I recently listed for sale. I must arrive before the back of the house staff arrives so they will not be suspicious.
9:00 am- Conduct a conference call between a buyer and seller to discuss add-backs on the Profit and Loss statements, and why the POS sales number are different than Sales Tax Filings numbers.
9:30 am-Start responding to emails in my inbox and following up with the To-Do list for the day.
9:45 am – Call a landlord to discuss the lease assignment for the new tenant. Let the landlord know franchise training will be for 4 weeks, we should be able to close mid-October.
10:00 am -Follow up with a closing attorney that $10,000 buyer escrow has arrived
10:15 am – Review my CASH Report and touch all my pending deals. Start cold-calling for new restaurant seller leads.
11:00 am- Receive a call from a financially qualified candidate. The buyer needs help in understanding the price valuation of the restaurant. The buyer does not understand the definition of add-backs for a price valuation.
11:30 am- Send a potential seller lead a complimentary restaurant valuation. Seller sent a copy of a 2018, 2019, 2020 Profit and Loss statements for review 48 hours earlier.
12:00 am- Receive a call from closing attorney wire disbursements that have been made. I contact all parties expecting a payment to let them know to check their bank accounts for the deposit.
12:00-12:45pm- Mental break. Listen to some R&B, Jazz, and watch some ESPN or stock market show.
12:47-1:05pm- Conversation with a current seller client about buyer activity on his listing.
1:15pm- Receive email from the buyer that requests to see back of the house for a listing I’m advertising for sale. I call the buyer and they don’t want to sign a non-disclosure or show proof of funds.
1:40 pm- Follow up with Hungry Howie’s buyer to get some feedback on how the 4-week training is going.
2:05 pm- An interested buyer requests a copy of our Asset Purchase Agreement to review with the intent to make a formal offer. I draft the Agreement and sent it for review.
2:35 pm – Schedule a meeting between interested buyer and seller at the restaurant for Saturday morning.
2:50pm- Follow up with Papa’s Pizza To Go Area Representative to discuss the training schedule for the approved candidate.
3:10 pm – Review language in a 50-page lease to find out the option renewals, lease expiration date, security deposit, and any prohibited uses.
3:25 pm- Receive a referral from a Financial Advisor. His client has 3 sub sandwich franchises that he wants to sell and is interviewing Restaurant Brokers.
3:27 pm -Followed up with the lead and had a conversation with potential seller lead with 3 sub sandwich franchises.
3:50 pm- Request updated 2020 Profit and Loss statements from all seller clients, to provide buyers with updated numbers.
4:10 pm – Assist buyers with a business plan and give feedback for improvement.
4:25 pm- Read restaurant news related blogs, articles, and restaurant news updates
4:37 pm- Have a conversation with the seller that wants to increase the sales price because they need more money at the closing table.
4:50pm- Send website improvements for www.EATSbroker.com to the website designer to make changes
5:10 pm – Work on restaurant valuation for a potential client
6:15 pm – Conversation with Amaya about Dinner
6:45pm- Online looking for new seller leads and responding to any missed emails.
7:15pm – Start writing a new blog
Restaurant Brokerage is a contact sport, brokers that are uncomfortable with multi-tasking, a challenging career, or demanding clients will not be successful. The life of a Restaurant Broker is to be a Subject Matter Expert in the Restaurant Brokerage Industry.
EATS Restaurant Brokers was formed to bring a new flavor to the Restaurant Brokerage Industry!
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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How should I sell my Restaurant?
How should I sell my restaurant is a question most restaurant owners will have to deal with before exiting their business. Similar to residential real estate owners, restaurant owners have multiple options to choose from. Each option has pros and cons, but which one is actually better?
Today’s internet has tons of information on selling a restaurant, how to do a valuation, and ways to market a restaurant for sale. Some people think they can actually become experts in Restaurant Brokerage overnight.
Dominique Maddox a Restaurant Broker and Founder of EATS Broker says, choosing the right option to sell a restaurant makes all the difference. Only about 30-50% of all restaurants listed for sale on the market will actually sell, the best way to increase your odds of selling a restaurant is working with a trained professional in restaurant sales.”
Restaurants for Sale by a Restaurant Broker– Restaurant Brokers are specifically trained in the Restaurant Resales process. On a daily basis, they view restaurant owners’ profit and loss statements, negotiate lease terms with landlords, work with banks for SBA approval, and work with Franchise Restaurant Resales.
Pros:
-Expert in Restaurant Sales Industry
-Knowledgeable about the Restaurant Sales Process
– Understands industry specifics and comparable financial data for specific restaurant concepts
-Has experience working with buyers thru the Franchise Approval Process
-Has resources and vendors to help during the buying process
-Has forms and documents for an Asset Purchase Agreement
Cons:
-Will require an exclusive listing agreement for 6-12 months
-Commissions range from 10%-15%
Restaurants for Sale by a Business Broker- Business brokers, also called business transfer agents, or intermediaries, assist buyers and sellers of privately held businesses in the buying and selling process. They typically estimate the value of the business; advertise it for sale with or without disclosing its identity; handle the initial potential buyer interviews, discussions, and negotiations with prospective buyers; facilitate the progress of the due diligence investigation, and generally assist with the business sale.
Pros:
-Trained on Business Brokerage
-Have knowledge of business valuations
Cons:
-Jack of all trades-sells everything ranging from a gas station, laundry mat, hair salon, and etc.
-Not specifically trained in selling restaurants
-Most do not understand the usual cost in restaurants for food cost, labor cost, rent cost, and normal add-backs.
Restaurants for Sale by Owner (FSBO)- For Sale by Owner, or FSBO, is the process of selling a restaurant without the representation of a broker or agent. Restaurant owners may employ the services of marketing or online listing companies or market their own restaurant. Typically, they represent themselves with the help of a lawyer.
Pros:
-No Broker Commission to pay
-Have 100% control of the sales process
-Can dictate listing price with no logical reason
Cons:
-Emotionally attached to the sale of the restaurant
-Most Owners will overprice restaurant for sale
-Do not understand the sales process of a restaurant, UCC lien search, Sales Tax Certificate, and lease obligations
-Do not have the right paperwork to write an Asset Purchase Agreement, Amendment to change the contract, escrow docs, or any other document related to the closing.
Franchise Restaurants for Resale by Franchisor-The Franchisors are in the business of maintaining open locations and getting new franchisees to build out new restaurants. Franchisors are not in the business of resales. Franchisors have started to try helping current franchisees sell their franchise when they want to exit the business.
Pros:
-Franchisors have the power to approve any potential new franchisees
-Franchisors have the sales information for restaurants
-Receive customer inquiries seeking to join the franchise
Cons:
-Do not have a dedicated department for franchise resales
-Are not trained on doing restaurant valuations based on profit and loss statements, tax returns, or an Asset Sale
-Conflict of interest
-Too much time required for franchise resales
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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What is a Pocket Listing Agreement?
In the real estate industry in the United States, a pocket listing or hip pocket listing is a property where a broker holds a signed listing agreement (or contract) with the seller, whether that be an “Exclusive Right to Sell” or “Exclusive Agency” agreement or contract, but which is never advertised nor entered into a multiple listing system (MLS) according to Wikipedia.
Restaurant Brokers will usually require an exclusive listing agreement ranging for 6-12 months before working with a restaurant owner. Why would a Restaurant Broker want an exclusive agreement? Why would a seller want a pocket listing or open listing agreement?
Dominique Maddox a Restaurant Broker and Founder of EATS Restaurant Brokers says, “selling a restaurant as a pocket listing can be challenging. Not advertising a restaurant for sale on the major business brokerage websites puts a restaurant at a major disadvantage of selling. Our firm feels like a pocket listing should only be considered on listings over $2 million listing price”.
Pocket Listing Agreement- How to find them?
The reasons for a seller choosing the option of a pocket listing may vary from the need of privacy, worries of the public finding out, employees finding out, or overall fear. Selling a restaurant vs selling a home as a pocket listing or finding listings has some different challenges.
Residential- real estate agents can easily go on the Multi Listing Services (MLS) to find a list of homes that have expired, canceled, or withdrawn. Knock on home-owners doors, or send a mailer with advertisement to gauge interest.
Restaurants- restaurant brokerage does not have a Multi Listing Service (MLS) to view expired, canceled or withdrawn listings. Restaurants usually will not have an open house or sign in front of the restaurant. Finding the owner is not as easy as knocking on the door.
Restaurant Brokers will usually have clients contact them directly to explore the option of selling a restaurant as a pocket listing.
Pocket Listing vs Open Listing Agreement
The biggest differences between the two are a Broker has signed a listing agreement (or contract) with the seller, whether that be an “Exclusive Right to Sell” or an “Exclusive Agency” agreement or contract. Brokers agree not to advertise restaurants for sale to the public but only offer exclusive buyers.
Open listing can refer to a restaurant for sale whose owner is using multiple Restaurant Brokers in order to find as many potential buyers as possible. The Broker who brings in the ready, able and willing buyer for the restaurant collects the commission. Restaurant Brokers will be reluctant to take on an open listing because of the lack of commitment by the seller to work with them exclusively.
Pocket Listing- Pros and Cons
Pros
– Privately shop the buyer market to find out initial interest
– Chance to test listing price
– Exclusive buyers want to be the first to know about a successful restaurant going up for sale
– Less chance of anybody finding out about sell
Cons
– Not listed on The Internet’s Largest Business for Sale Marketplace
– Finding a buyer can be more challenging
– The lower success rate of selling
– Restaurant Brokers usually pay less attention to these listings
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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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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Why Buy a Restaurant? Here are Four Reasons?
It’s a golden opportunity for buyers to buy a restaurant in today’s market. BizBuySell.com states website traffic has increased with Buyers and Sellers activity. Customer traffic on the internet’s largest Business for sale site now exceeds pre-Covid-19 levels. Traffic to the website was up 19% May 2020 compared to May 2019.
Yelp recently updated its Local Economic Impact Report to provide in-depth information on the brick-and-mortar business sectors across the nation. Yelp states in March, Restaurants had the highest number of business closures, compared to other industries, and have continued to close at high rates.
53% of restaurant closures are indicated as permanent on Yelp.
What do high restaurant closures and increased seller activity on BizBuySell.com mean? It’s a great time to buy a restaurant!
EATS Restaurant Brokers Four Reasons Why it’s a great time to buy a Restaurant?
- Cares Act SBA Loan Program
As part of the coronavirus debt relief efforts, the SBA will pay 6 months of principal, interest, and any associated fees that borrowers owe for all current 7(a), 504, and Microloans in regular servicing status as well as new 7(a), 504, and Microloans disbursed prior to September 27, 2020.
This is a great opportunity to get six months of free financing for their business. For loans made after March 27, 2020, and fully disbursed prior to September 27, 2020, SBA will begin making payments with the first payment due on the loan and will make six monthly payments.
- Second Generation Restaurant space available.
The high amount of restaurant closures is an opportunity for another restauranteur. Prime real estate spaces are coming available due to restaurants not reopening. This is a golden opportunity for buyers to get a second-generation restaurant space in prime retail areas.
- Businesses with Growth Potential
Many businesses are well-positioned for a post-Covid-19 economy. Take Out and Delivery are in high demand from online ordering and increased digital exposure. Quick Service Franchises such as Wing Stop, Papa John’s, and Domino’s have seen business skyrocket since March when the Covid-19 outbreak happen.
The forced closures across the US have increased buyer’s ordering online. Restaurants that were in position with online ordering platforms are going strong.
- Exiting Business Owners
Many baby boomers may choose to sell or close rather than persevere through Covid-19 new guidelines for re-opening. Baby Boomers that are close to retirement are viewing the opening of the economy and increased buyer demand as the time to sell.
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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