Rules for Selling a Restaurant

YOU want to SELL your restaurant? There are eight tasks or rules that need to be followed to successfully sell your restaurant.

1) Bring the deferred maintenance up-to-date. When potential Buyers see items that need fixing - they often wonder about the condition of things they can't see

2} Make sure your location and any equipment leases are transferable BEFORE you look for a Buyer or Broker

3} Organize the 'Basic Information' about your restaurant onto a Summary Page [i.e. type of restaurant, City, Gross Income, Net Profit, years of operation, Lease costs, etc.] before you look for a buyer

4) Prepare a Business Offering package. Include the information that qualified buyers need to see: copy of lease(s); 2 yrs Financial Statements [P&L]; seating capacity; code requirements; plus, list of furnishings, fixtures, and equipment that is included in the sale of your restaurant. Also include a Restaurant Valuation Report that uses more than one valuation formula/approach + is independently generated and provides a value on the market [i.e. the Value Pak from Restaurant Values]

5) Establish a blank purchase agreement form [legal services may be appropriate] prior to trying to find a Buyer. Then you can fill in the blanks when you have a deal [Attorneys are sometimes very slow in putting on-the-spot agreements together and the qualified buyer's enthusiasm may evaporate if the purchase is delayed]. Also, if providing 'seller financing' [note: data from CBI's show that seller financing increases the dollar value of a bid], be sure correct procedures are followed

6) Look for Buyers in as broad an area as possible. Don't depend only on your local paper to produce leads. The way to get the optimal price is to have as many qualified buyers as possible. Advertise in restaurant specialty newspapers and newsletters. Also, use on-line restaurants for sale web sites like the one at bottom of home pagefor buyers/sellers

7) Qualify the buyers right away with a brief Buyer Profile/Disclosure form. You need to know about their financial strength and business skills before you give out the confidential information on your restaurant in the Business Offering package or spend a lot of time with them

8) Make sure that every agreement of the transaction is clearly stated in writing

Follow these 8 RULES for Selling your restaurant to financial SUCCESS !