Q. Why do I have to complete the Confidentiality Agreement?
A. Selling a business can sometimes be a lengthy process, if it does become known that a business is for sale it can create hardships for the business, employees will looking for other jobs or will not do their jobs in the same manner, theft by employees is also a threat. The same can be said for the outlook of the customers. We provide confidentiality to the owner by ensuring that anyone who receives information from us must agree, in writing, to keep the information confidential. This will make sure that the pending sale does not negatively impact or interrupt ongoing business.
Q. Why do I have to complete the Buyer Profile Questionnaire?
A. The Information noted in the questionnaire is utilized to determine what type, size, style and location of restaurant will best suit your needs while determining your financial and operational qualifications. This information greatly assists in the selection process so that we are providing a range of listings that best suit the particular needs of a buyer in every situation.
Q. What information is available on the restaurants listed?
A. Typically our files contain information on physical space (square footage, number of seats, etc.), pictures of facility, revenue and earnings data, lease information, equipment list, recent health inspection reports and liquor license information, if applicable.
Q. How long does it take to buy a restaurant?
A. Typically it takes about a month from the time that a contract is ratified (the price is agreed upon between buyer and seller).
Q. How do I make an offer?
A. We prepare a purchase contract that is signed by the buyer and presented to the seller who then responds in one of three ways: accept, decline or counteroffer.
Q. How much money do I need to buy a restaurant?
A. This depends greatly on the price of the business being purchased. In addition to the purchase price, plan on spending money on things like: licenses, security deposits, start-up inventory, product and supply purchases, printing, design, advertising and 60-90 days working capital.
Q. What about financing?
A. For the most part banks and other financial institutions (including SBA) do not lend money on restaurants unless they have a long, profitable operating history and excellent books and records to back it up. While there are some restaurants available that fit that description, be prepared to pay a premium price for them. The vast majority of restaurant transactions are all cash deals. If there is financing involved it would typically come in two ways. Collateral from an unrelated source, like a home equity loan OR a portion of the purchase price being financed by the seller.
Q. Do I need an attorney?
A. A restaurant can be purchased without an attorney; however, in most instances it is not recommended. We will provide the contract documents and an escrow company will complete the transaction safely. At minimum, it is a good idea to have an attorney review the existing lease for the business being purchased.
Q. What is earnest money?
A. When making an offer on a business it must be accompanied by a check. This check is generally referred to as the "earnest money deposit." The reason for the deposit is to impress upon the seller that the buyer "earnestly" intends to purchase the business and therefore it is taken off the market and the seller cannot accept any other offers for purchase while the contract is in effect.
Q. Should I form a corporation?
A. Most businesses are purchased and operated under a separate entity, typically a Corporation (Inc.) or a Limited Liablility Company (LLC). The advice of a CPA should be sought to determine what method is best in your particular situation.
Q. Do I need to buy a liquor license?
A. The Restaurant Brokers are very experienced in dealing with all types of liquor licenses and can be of great assistance in acquiring, transferring and applying for your liquor license.
Please feel free to call us if you have any questions on this information.
We're happy to assist you.
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