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From the category archives: Certified Business Brokers News

Buying a restaurant is one of the riskiest business purchases you can make. We're here to make sure your get the best price and a smooth transaction.

What Drives The Value of a Restaurant?

The valuation of a restaurant is much like any other business valuation. But, there are certain factors unique to the restaurant industry. The universal drivers for many restaurants are pretty simple: quality, hospitality, consistency, value, cleanliness, and customer loyalty. 

You may have heard the saying that the three most important ingredients for a successful business are location, location and location. Obviously, there are other factors which are very important as well, but you cannot compromise on location.

In a 2005 publication of Cornell Hotel and Restaurant Administration Quarterly, the authors noted how successful owners were able to describe their concepts - and why people like it - in great detail - those unique reasons why people choose their restaurant over their competitor.

1. Location, Location, Location

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Understanding Seller Financing in a Business Sale

Business owners who extend financing to a buyer for the purchase of their business often ask, "What happens if the purchaser defaults on the loan?" Should that happen, the seller would be able to exercise whatever rights are defined in the security agreement that is associated with the promissory note. The seller would usually have the right to get the business back, which may not always be the best scenario if the business has declined under the buyer's management and is not performing well. In addition, if the buyer is using the business' assets to get a bank loan, the seller will have to take a second position behind the bank. A seller should try to negotiate a personal guarantee by the buyer as part of the terms of the promissory note. The seller can also require the new owner to provide periodic financial reports on the performance of the business as part of the terms of the promissory note.

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Texas Restaurant Industry - Biggest in the Nation in 2009

Texas has long been the hot bed of restaurant activity in the U.S. With roughly $35 billion in sales expected in 2009, the restaurant industry in Texas is anticipated to be the leader in the restaurant sector in growth, according to the National Restaurant Organization, as reported in the Wall Street Journal. The $35 billion figure represents a 4 percent increase in sales year-over-year. That's down from 5.6 percent growth in 2008, but still shows that Texas restaurants are bucking the recession. The national sales growth rate is expected to be almost half the growth of Texas at 2.5 percent. In December 2007 California was #1 in restaurant sales, with Texas in the #2 position. We all know where California stands this day. Texas has outpaced the has-been leader and is kicking butt. “Even in these tough economic times, it is clear that the Texas restaurant industry is the best place to do business in the nation,” said Richie Jackson, executive vice president and chief executive of the ...

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