How to sell a restaurant


How can I offer an existing fast-food location in Puerto Rico to parties that may be interested?

for sale sign

Last week’s question on setting a value on a restaurant for potential sale clearly had operators dreaming of putting their feet up and counting wads of money. There were a few similar followups for our expert Harris Eckstut, a Philadelphia-based restaurant consultant—now that we can determine the value, how do you actually sell?

First, be sure you can. Start with your attorney. Do you have a franchise agreement that allows for a sale? Does your ownership structure create hurdles—would you have to buy out or get agreement from investors? What restrictions are in place in your lease? Once those questions are answered, you may be ready to sell.

Eckstut advises, “When selling an active restaurant operation, confidentiality becomes a critical factor. If one tries to market the property through traditional public means (on the internet, print and other public media), people will know you are selling—including your customers and employees. It has been my experience that more often than not, the employees start looking for other work (and find it) and customer counts go down. So, it is essential that you find a broker who knows and understands the confidentiality process. That person should explain to you how he or she will reach out to potential buyers through confidential means and then follow up with confidentiality agreements that the potential buyer must honor before they even find out the location and name of the business and property.”

A good broker is key to the process. Some guidelines for choosing one:

  • Beware of cash-in-advance. Most reputable brokers charge a commission rather than an up-front fee.
  • Check credentials. Eckstut recommends membership in the International Business Brokers Association (IBBA) or similar organization.
  • Check references. Make sure the broker has restaurant experience and expertise and ask if you can speak with past clients.

Finally, once you’ve found your broker, be realistic and don’t pursue a listing if the numbers don’t match your hopes and expectations. Eckstut advises, “They also will be straightforward in telling you what the market—as they know it—will bear for selling your business. In other words, if they list your business, they expect to sell it at the price that they feel you can get. This is how they make a living.”

More on selling your restaurant here.

Want to ask advice guy a question?

Refresh Type the characters you see in this picture. Type the characters you see in the picture; if you can't read them, submit the form and a new image will be generated. Not case sensitive.  Switch to audio verification.

Today's top stories

As if we needed more disinformation in the age of fake news, along comes CKE Restaurants’ controversial new advertising campaign for its dual fast-food brands, Carl’s Jr. and Hardee’s . The spots, in...
You don’t know me!” That was the cry of vegetarians and vegans a few short years ago. Today, about 4% of consumers say they are vegetarian or vegan, a figure that is down from 9% in 2014, according...
Scott Redler has no trouble counting the reasons that Freddy’s Frozen Custard & Steakburgers invested in digital menu boards. The chain’s chief operating officer says that in a growing company...
Two burger giants recently battled it out with an atypical weapon: cheesy sides. Technomic’s MenuSurf program found that a greater percentage of consumers say they’d visit Burger King for its Cheesy...
There are a few reasons that your pay rate may be lower than you think it should be: Your employer is taking the tip credit . The information on your stub is not presented clearly, or you are not...
In the face of high rent and a competitive real estate market, it’s a trend we’re likely to keep seeing from chains: shrinking footprints. But the idea of small stores isn’t new—beverage-focused...
Iced tea has become an American beverage staple, with 84% of restaurants offering it as a menu option. With this prevalence in the foodservice industry, are there still opportunities for growth and...
Fast-casual chain PizzaRev has been acquired by a venture capital firm helmed by a former McDonald’s CEO. Chicago-based Cleveland Avenue now owns a majority stake in the fast-casual brand, which has...
This year's NRA Show® was full of on-trend food, inspiring speakers and business-building education sessions—and it’s clear that operators couldn’t get enough. “We’re in our third year of record-...
Mike Greenberg, host of Mike and Mike on ESPN Radio and ESPN2, talked with Tom Ricketts, Chicago Cubs Executive Chairman, about leadership and how the Chicago Cubs overcame obstacles to win baseball’...