Even the fastest-growing companies have to sell assets from time to time. If you're looking to sell a restaurant, don't run out and get a "For Sale" sign. Run out and find a good broker—a good restaurant broker. There's no official certification for selling restaurants, but there are brokers who focus on foodservice. Check for-sale ads to find one. Specialized brokers can attract buyers already shopping for a restaurant and they can properly value your restaurant. Here are five questions to ask a potential broker.
If you're looking to sell a restaurant, don't run out and get a "For Sale" sign. Run out and find a good broker—a good restaurant broker.
There's no official certification for selling restaurants, but there are brokers who focus on foodservice. Check for-sale ads to find one. Specialized brokers can attract buyers already shopping for a restaurant and they can properly value your restaurant. Five questions to ask a potential broker:
- How many restaurants have you sold in the past year? In your career?
- What percentage of your listings sell?
- How will you market my listing?
- How will you maintain confidentiality?
- Have you had any lawsuits filed against you? Any judgments?
A good broker should review everything from your real estate to your books before suggesting a selling price. Expect the value to be about three times annual cash flow, according to the National Restaurant Association. If you're selling franchise units of a top chain, that multiple can go as high as five.
A good broker will also keep things confidential. Only after a potential buyer shows himself to be serious—and sufficiently funded—should the broker disclose the restaurant's identity and arrange for an after-hours tour. Once a contract is signed, the broker manages details like leases and licenses—before a buyer gets cold feet or the market shifts. A broker will collect 10 to 15 percent of the sale price.
Finally, timing is everything. Call a broker when business is booming, not when you're about to shut the doors.
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