Selling a Restaurant? Ask the Tough Questions Early and Save Yourself Time and Headaches

As an intermediary selling restaurants for over twenty years, I wish I had read this article when I started out. You've decided to sell your restaurant ( or maybe you're selling a restaurant for someone else as an intermediary ) and a “suspect” buyer calls you. Do not make the mistake I did for years in assuming the buyer is a “prospect” buyer just because you are eager to sell the restaurant and they talk a good game.

It seems many times the “suspect” buyer asks all the questions and because restaurants can be hard to sell we don't want to offend the buyer by asking for things like a financial statement. So where do you draw the line in what to ask for without chasing away a good buyer?

Experience has taught me to ask early, firmly, professionally, and very nicely – but pretty much insist on getting “The Big Four”.

“Mr. Suspect Buyer, I really appreciate your interest in the restaurant and I sincerely hope we can put a sale together. I will be happy to provide you all the details about the restaurant in order for you to know if you are interested.

However, let's make sure we are spending our time wisely in pursuing this. Can you provide me a list which ( the Landlord will need, my other stockholders will require, shows me you have the ability to put this purchase together, etc.) . Here's what I need if you can help me.

1.) I need to see your personal financial statement.
2.) I need to know how much money you have allocated for the purchase, working capital, or maybe changes you might want to do. Do you have an investor? Are you going to need a bank loan?

3.) I need to know your history of ownership and management experience.
4.) I need to know what you are planning to do with the restaurant. Do you see yourself keeping it as is - or changing it to a new concept?

Does this list seem kind of tough? You bet it is. Try it. I predict what you will find out is the most qualified prospects will gladly share this information. Weaker prospects will be the ones who fight you on this – which means they may only be suspects and can't prove themselves as a qualified prospect. Remember, you can always back off after asking but it will teach you a lot about this potential prospect in how they respond. If you can't control the buyer in the early stages of the sale you will never be able to control them later. All that time spent – which could be spent finding a qualified prospect you can control.

Sincerely,

Jack Kimball
Director of Business Development
www.RestaurantBizOps.com
Toll free: 877 219-9747