If you’re considering buying any food
service business there a number of questions you will want to
ask the seller. Today I’m going to focus on the ones
that i think the most critical So let’s get right to it. The first question
I’d ask is What is your reason for selling? There many good reasons why a business
owner may want to sell divorce, retirement, relocation,
health, burnout and many more. What is your relationship with your landlord? you my expect a positive answer but most
business owners will be frank if they have a difficult landlord and the sooner
you know this the better you’ll be. What is the length of your lease? A long lease or one with options is
highly desirable. What’s your Cost of Goods Sold? That will vary based on the type of
restaurant and you can do research to find the optimum cost of goods sold for
your type of business. What’s your rent as percentage of revenue? Ten to twelve percent is a good range.
When you get above twelve percent it’s very difficult for a restaurant to make a
profit. Are you open to seller financing? Almost all sellers want cash but it’s
important for you to know you can make an offer for a business contingent upon
seller financing. Do you work as a manager? As the seller and absentee or
non-working owner? If you will replace the paid employee you can add that
salary back in computing the owner benefits. Are family members employed in the business? Having family members as employees could
be considered a red flag in some cases. and the more family members the redder
the flag What non-compete terms would you offer? These are tricky the number of years and
distance are the key ingredients. Do you have suggestions to improve the business? The owner is likely to have given this a great deal of thought and his insight could be very valuable to you. A word of caution if you don’t have extensive restaurant
experience I’d recommend you start with something simple such as a sub shop,
a sandwich shop or perhaps a smoothie business or perhaps you’re working with
the manager who does have extensive experience I’ve run through this list pretty
quickly if you’d like a copy of this list just drop me an email or give me a call
i’ll be happy to send you that information In addition I have a wealth of
information in our database of restaurants that have sold in Florida
and I can sort that information and provide you values based on a percentage
of revenue or as a multiple of owner benefits and if you’re considering
buying a restaurant in Florida I’ll be happy to send you a list of all restaurants
available either by location or by type of restaurant. Simply send an email or
give me a call. I look forward to working with you.