Many a restaurateur often develops an idea for an outstanding restaurant business, mostly based around menu, themes or location based factors. Unfortunately, many of these ideas just get discarded upon realizing how much effort is actually needed to even raise the business from the ground, before even attempting themes or menus. In such cases, buying an existing restaurant may prove to be a winning business decision. We bring you a list of questions every great businessman will ask themselves before buying an existing restaurant.
Why is it for sale?
There are several reasons restaurant owners seek to sell their business:
- They are fed up with restaurant business or entrepreneurship in general, be it due to health or family issues or just changing interests, so they seek to move to another area of business.
- Their business isn’t really performing and they are only trying to shove it someone else’s way to deal with it, which is a huge red alert for the possible investor or buyer.
Will buying an existing restaurant result in success?
In reality, there is no way to surely know. It all depends on both existing problems and situations regarding the restaurant and how you and your management will deal with them and innovate. Of course, you and your team might completely turn it around, but do investigate the problems the restaurant is facing beforehand.
Check out this buying an existing restaurant checklist that may help you.
Buying an existing restaurant advantages
Buying a turnkey restaurant has its benefits. You and your team might choose to alter the restaurant’s areas, its business model or even the menu, but one great advantage is that all of those things have already been done by its former management. Theoretically, the existing restaurant has a working strategy already. Your team won’t have to concern itself with these complications as everything has already been done, albeit maybe not at your liking. Based on the price, buying an existing restaurant might end up a much more profitable one time investment than opening it yourself. There are even ways of buying an existing restaurant with no money.
Buying an Existing Restaurant – Legal Aspect
Before buying a turnkey restaurant, consider all the aspects in which the restaurant has done legal groundwork and investigate in what ways may your management end up in legal complications after the business has been acquired. Buying a restaurant with no experience or thought beforehand might surprise you later when unexpected problems occur. Write down all the permits, licenses, health inspections and similar. Ensure that you do not delve into a business far too complicated and expensive to run just because it has a few legal quirks you didn’t anticipate.
Buying an Existing Restaurant – Downsides
1. If the restaurant has a negative reputation, the projects you end up running after acquiring it may inherit some of it, setting you up for a hard time, initially.
2. If there is wear and tear in restaurant assets, it will present a higher repair cost down the road.
3. Initially, restaurant reopenings attract attention, but it could very quickly disappear if you don’t impress.
With proper thoroughness, the advantages of buying an existing restaurant will far outweigh the downsides. You can even look up buying a restaurant business plan.