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SPECIALIZING IN SELLING RESTAURANTS, BARS & NIGHTCLUBS
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1st Qtr | 2007
OFFICE LOCATIONS CHICO, YUBA CITY, REDDING 530-345-6600 LOS ANGELES & VENTURA COUNTY 818-879-7250 SACRAMENTO AREA 916-632-9003 ORANGE COUNTY 714-260-1979 SAN BERNARDINO & RIVERSIDE COUNTY 909-709-1010 SAN DIEGO COUNTY 858-635-8992 SAN FRANCISCO NORTH BAY 800-576-3615 SAN FRANCISCO SOUTH/ EAST BAY 408-469-3983 SEATTLE AREA 425-577-3499 NEVADA 775-324-2160 HOME OFFICE 800-576-3615
Toll Free | 1-800-576-3615
SELLING YOUR RESTAURANT, BAR OR CLUB ON YOUR OWN?
It sounds so simple, doesn’t it? Just place an ad in the paper, nd a buyer and close the deal. As brokers, we hear the horror stories most restaurant owners experience when trying to sell their restaurant without using a broker. Most stories go something like this: “I placed an ad in the local newspaper and got plenty of phone calls, but they were all tire-kickers looking for a deal. And they called in the middle of lunch hour! I was so frustrated with the process I would spend hours talking to this buyer and showing the business, only to have the person disappear on me. All this e ort wasted a er spending $500 on
a two-week newsprint ad!” Some Sellers do nd a buyer. But that’s when all the questions pop up: How do I qualify the buyer? What contracts do I need? How do I protect myself from unscrupulous Buyers who sue for any reason? What escrow company do I use? How do I set up the deal for success with the landlord, who is always the dealkiller? How do I nd nancing for the deal and set up my business for a loan? How do I get the deal closed; what are the steps needed to close this deal? Am I getting top-dollar for my restaurant? If you’ve tried to sell your restaurant on your own, and have been frustrated with the results, give one of our agents a call to nd out how we make the process simple for you while we get you top-dollar for your restaurant, bar or club and do it in a professional and con dential manner. n
Talk to one of our agents who can help you.
is is the fourth of a four part series designed to help a restaurant owner understand the complexities of the selling process.
IMPORTANT POINTS TO KNOW WHEN SELLING YOUR RESTAURANT
LENDING MONEY TO BUYERS
In a situation where the Seller is taking back a portion of the purchase price in a note (i.e., a loan from the seller to the buyer), the Seller is in essence lending money to a complete stranger. To protect the Seller, SellingRestaurants recommends the following procedure: 1. Obtain the personal nancial statements from the Buyer with proof of funds – look for plenty of cash and access to cash, i.e. plenty of home equity. Remember, most leases will require you to make the rent payment if the Buyer defaults. page 1
2. Get the buyer’s resume. Determine if they have the skills to be successful. 3. Get a credit check authorization form from the Buyer. Have a credit agency run the Buyers credit report. If the FICO score is below the 650 mark, you should have some concerns. Look at the details of why the score is low. Some people have valid reasons such as a divorce or long-term illness. If the FICO score is in the 500’s, turn and run! 4. Have the Buyer prepare a business and nancial plan. Look it over to determine if the buyer has any idea on how run a restaurant. Finally, SellingRestaurants suggests the following strategy in order to secure the note and the Seller’s position: (a) Have the Landlord agree to a sub-
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lease, not an assignment of the lease. With sub-leases, a er the sale, the Seller retains the same bundle of rights under the lease – the right of possession being the key right - while under an assignment all rights are lost. is means the sublessor (Seller) can, subject to certain legal restrictions, re-take the property in the event the sub-lessee (Buyer) defaults. Under an assignment, the Seller has no right to re-enter or possess even though they are liable for the rent payment. (b) e Buyer should personally guarantee the sub-lease. is means in the event of a default, the Sub-lessor can obtain a judgment against all the properties of the sub-lessee (Buyer) including real estate.
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WHY USE OUR SERVICES OVER ANOTHER BROKER OR EVEN SELLING IT YOURSELF?
1 We get results! 80% of every
restaurant we list we sell. Industry average is 30%. waiting to buy a restaurant, bar or club. Most of our sales come from this exclusive list. business! Our skilled agents know how to value and price restaurants. For example, we sold one restaurant for $195,000 more than another broker was willing to sell it for. In 2006, our listings sold for 95% of asking price! broker has a more aggressive advertising strategy than SellingRestaurants. We
SPECIALIZING IN SELLING RESTAURANTS, BARS & NIGHTCLUBS
IMPORTANT POINTS TO KNOW WHEN SELLING YOUR RESTAURANT, cont.
(c) e Seller should have the escrow company le a UCC-1 Financing Statement on the assets of the restaurant. is places a lien on the equipment and xtures of the restaurant. But remember, pieces of equipment have feet and tend to walk away when a sub-lessee is in default. (d) Finally, secure the note with the sublessee’s real estate. Make sure the equity in the house is su cient enough to cover the value of the note. Bottom-line, lending money to a stranger is a risky business, but if structured properly by a broker and attorney, the risk can be signi cantly reduced. n
2 We have 5,500 exclusive buyers
We have over 5,500 registered buyers waiting to buy your restaurant.
3 We get top-dollar for your
GETTING TO BE
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1 IN GUEST SERVICE
personality, habits, character, and values are not generally trainable skills. So hire the person whose untrainable qualities match your needs. en train them to perform the tasks. Don’t settle for less. STEP #3: DON’T PANIC HIRE Hiring the wrong person will likely lead to major problems in: wasted wages; low employee morale; poor guest service; the ; and a complete break-down of teambuilding e orts. Employees would rather work harder and/or longer until the right person is hired. Involving the sta in hiring a new team member is always a great way to get team commitment. Hiring the right sta is critical to the success of your restaurant, bar or club. Never take it lightly! Look at each potential person as future General Manager/Owner of the restaurant, bar or club and do not settle for anything less than your standards! Never crisis hire and go with your gut. n page 2
STEP #1: HIRING THE RIGHT PERSON Today’s workforce is certainly a challenge for any service proprietor. Understanding today’s workforce gives a business a competitive advantage in acquiring talented and loyal employees. All too o en, employers hire someone with server experience only to make them a “busboy or hostess” to evaluate the employee’s work habits or to “pay their dues” before earning the server position. Unfortunately, the new generation - the instant grati cation generation - doesn’t take well to “paying their dues.” So a paradigm shi is necessary in order to hire and train truly great people. STEP #2: HIRE BASED ON PERSONAL TRAITS Keep in mind to hire what you can’t train and then train what you didn’t hire. Sound confusing? Simply put, a person can be trained to perform tasks. But a person’s Toll Free | 1-800-576-3615
4 No
are at the top of the Google search engine. We advertise in 7 different websites and in print, too. We have a dedicated staff whose only job is to manage the company’s advertising programs. 5 Our agents are trained to be creative problem solvers to make deals happen. 6 No one sells more restaurants, bars and clubs in California than SellingRestaurants.
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SPECIALIZING IN SELLING RESTAURANTS, BARS & NIGHTCLUBS
SellingRestaurants
Join the #1 Restaurant Brokerage Firm in the nation. SellingRestaurants is looking for high-energy, honest and smart agents. is is a rare opportunity to work in an exciting and challenging industry with one of the nest and most dynamic business teams in the Nation. Our rst year agents o en earn in excess of $100k with superstars earning in excess of $200k. We’ve quickly grown, because our great business model puts our agent’s interest rst with exclusive territories, extensive marketing and advertising support, very competitive commissions, and unsurpassed training
CAREER OPPORTUNITY WITH
programs and mentoring. Agents are needed in Los Angeles County, Santa Barbara County, San Francisco Bay Area, Seattle, Washington, and Nevada. Successful candidates need a charismatic personality, strong ethical values, high energy, and good thinking skills. Many of our agents are former restaurant owners or managers. A Bachelor degree with some general business experience is needed to be successful. If you are interested, or know someone who is, please send your/their resume/bio to info@SellingRestaurants.com. n
Listing #
572 558 561 559 568 569 584 587 599 633 540 579 586 618 595 574 555 565 585 612 491 609 571 640 606 570 577 591 616 619 600 624 590 546 578 607 601 487 562 627 598 637 551
Restaurant Name
SellingRestaurants C U R R E N T
Location Price Listing #
588 541 610 638 427 537 542 547 557 589 614 630 631 632 634 617 623 626 580 625 593 597 611 613 615 622 582 620 641 499 629 635 545 605 636 639 583 567 488 544 621 604 608
Restaurant Name
LISTINGS
Location
Price
$250,000 $159,000 $149,000 $150,000 $135,000 $250,000 $39,000 $287,000 $40,000 $100,000 $99,000 $150,000 $299,000 $120,000 $80,000 $225,000 $250,000 $239,000 $298,000 $220,000 $29,000 $65,000 $195,000 $225,000 $69,000 $250,000 $69,000 $180,000 Call For Lease $120,000 $89,500 $199,000 $700,000 $149,000 $219,000 $189,000 $120,000 $198,000 $180,000 $250,000 $200,000 $1,450,000
Full Service Chinese Italian Diner Italian with Real Estate Bar & Grill (type 47) Franchise Combo Store Franchise Combo Store Franchise Sub Shop Café Restaurant Facility Catering Business Franchise Yogurt Sidewalk Cafe Coffee House Sports Bar (type 41) Full Service Chinese Breakfast/Lunch/Dinner Diner Franchise Ice Cream Gas Station Restaurant Facility College Area Bar/Club Pizza Franchise Franchise Hamburger Café Sushi Catering & Café Franchise Hawaiian BBQ Major Franchise Coffee House Full Service Rest. w/type 47 Franchise Pizza Master Franchise Sub Shop Rest/Hotel/Rest/ w/Real Estate New Mexican Restaurant Master Franchise Sub Shop Full Service w/Type 47 Mexican Bar & Grill Quick Serve in Mall Franchise Hawaiian BBQ Italian Family Restaurant Burger Place w/Real Estate Full Service w/Type 47 Full Service w/Type 47 & Real Estate BBQ Restaurant with Real Estate Coffee House
Agoura Hills, CA Amador County Carmichael Chico Chico Chico Chico Chico Chico Chico area Citrus Heights Citrus Heights Colfax Colton Corona Cottonwood Davis Davis Davis Escondido Fairfield Folsom Goleta Granite Bay Hayward L.A. South Bay Lake Almanor Lemon Grove Los Angeles County Marysville Natomas Orange County Oroville Oxnard Oxnard Pinole Port Hueneme Quincy Redlands Redlands Rialto Riverside Rocklin
$150,000 $220,000 $1,145,000 $130,000 $299,000 $269,000 $125,000 $65,000 $89,000 $90,000 $120,000 $250,000 $91,000 $135,000 $325,000 $400,000 $98,000 $98,000 $1,200,000 $225,000 $65,000 $45,000 $220,000 $350,000 $400,000 $280,000 $80,000 $135,000 $250,000 $850,000 $250,000 $250,000 $369,000 $260,000 $92,000 $300,000 $275,000 $725,000 $80,000 $2,400,000 $125,000 Call $74,999
Full Service Chinese 5 Star Bakery & Cafe Asian Seafood Buffet Beautiful Restaurant Facility Mexican Rest. w/type 47 Seafood Buffet Ice Cream Franchise Quizno’s Lowe’s Center Café Coffee House Drive-Thru Facilty Large Restaurant Facility 9,000 Sq. Ft. Mr. Pickles Elegant Full Service Franchise Hawaiian BBQ Sports Bar and Grill w/type 47 Master Franchise Sub Shop Juice Franchise Batting Cages w/ Snack Bar A&W Rootbeer w/R.E. Option Catering and Special Events Trailer Restaurant Facility Franchise Quick Serve Pizza Franchise Full Service Chinese Master Franchise Sub Shop Restaurant Facility Full Service Restaurant Pizza Place Santa Paula Retail Center Full Service Chinese Elegant Italian Diner Quiznos Sports Bar w/type 47 Italian Style Café Quiznos AAA Restaurant Location Mall Franchise BBQ & Grill Cafe & Bakery Master Franchise Sub Shop BBQ Place Restaurant with Real Estate
Rosemead Roseville Roseville Roseville Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento Sacramento San Bernardino San Bernardino San Bernardino San Bernardino Area San Bernardino Area San Deigo San Diego San Diego San Diego San Diego San Diego County San Marcos Santa Clara Santa Clarita Santa Paula Simi Valley Solano County South Placer County South Placer County South Placer County South Placer County Thousand Oaks Torrance Upland Vacaville Ventura County Whittier Yuba City
Toll Free | 1-800-576-3615
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SPECIALIZING IN SELLING RESTAURANTS, BARS & NIGHTCLUBS
HERE IS WHAT SOME OF OUR CLIENTS HAVE SAID ABOUT US!
“We’d like to say that Rodger has been a wonderful broker who has gone above and beyond to help us with the buying process. We highly recommend him and SellingRestaurants” Nicole Aguilar TEAM PIZZA Redlands, CA “ anks for everything. You have helped us in two deals now and I would recommend your services to anyone. It was especially helpful in keeping a complicated emotional deal on a level, constructive path.” Darren Chadderdon & Michelle Mazza THE RAWBAR RESTAURANT Chico, CA Toll Free | 1-800-576-3615 “We greatly appreciate your assistance, honesty and support to us during the sale of Pasghetti’s. We felt con dent in your representation of us even though we were not your client. We know you probably saved us thousands of dollars and we wish we could re-pay you accordingly…we will continue to recommend you and use you for any transactions we will have in the future.” Lao & Mary Valenzuela & Linda Giusti PASGHETTI’S Roseville CA “I have used Paramount Restaurant Brokers, Inc. to handle two of my restaurant sale transactions. Both times they have page 4 managed to turn what seemed to be impossible deals into closed transactions where we got top-dollar for our restaurants. ey have the skills to navigate through di cult situations with lenders, buyers, and landlords. ey’re smart, professional, well prepared and easy to work with. We’ll use them again and again.” Ted Fulmer THE BLACK CROW Chico, CA
Did you know most leases still hold you responsible for making the rent payment even after you sell your business?
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6231 Brookshire Drive, Rocklin CA 95677
Published by SellingRestaurants
A News & Information Letter For Privately Held Restaurants, Bars & Clubs
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SELLING YOUR RESTAURANT, BAR OR CLUB ON YOUR OWN ..... p 1 IMPORTANT POINTS TO KNOW WHEN SELLING YOUR RESTAURANT FINANCING A BUYER...................................... p 1 GETTING TO BE #1 IN SERVICE ..................................................... p 2
EER ES CAR NITI RTU BLE PO OP VAILAg e 3 A pa
INSIDE THIS EDITION OF MARKETPLACE NEWS:
see
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WHY USE OUR SERVICES OVER ANOTHER BROKER OR EVEN SELLING IT YOURSELF ..................................................... p2 CAREER OPPORTUNITY WITH SellingRestaurants ................... p3 “CURRENT LISTINGS” ...................................................................... p3
AUBURN, CA PERMIT NO. 25 PRSRT STD U.S. POSTAGE
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