Questions to Ask Before Buying or Selling a Restaurant
The restaurant business is one of the most competitive markets in the United States. If you are thinking about buying or selling a restaurant, there are many difficult legal related issues that must be discussed before completing the transaction. Antonoplos & Associates has helped entrepreneurs buy and sell restaurants for over 20 years and we have listed below some of the most common issues associated with this process.
If buying a restaurant on a rental property, you should get the lease to review with your lawyer. Understanding what financial burden the location you are buying has associated with it will be critical to your success. Furthermore, the lease will also list zoning laws for the building, what codes and regulations must be followed, and what party owns the fixtures on the property. On the other hand, when selling a restaurant that utilizes a rental property, you should ensure that your landlord allows you to assign all of your obligations in the original lease to the buyer so that you are not financially liable for any failure of payments.
Other Common Issues
Aside from the lease, you should know exactly what you are getting when buying or selling a restaurant. This should include if the business has a liquor license, what essential staff will stay after the sale of the company, vendor information, and any outstanding litigation on the company. Each of these issues will you better understand what you buying. Another benefit is that you quickly begin working if you go through with the purchase. For a seller of a restaurant, this question largely hinges on what business structure you used when forming your company. Understanding what debts or legal issues will follow you after you separate from the company may play a large part in deciding how much you will sell the company for.
Finally, when buying a restaurant, you should discuss with the seller exactly why they are looking to sell their business. For some restaurant owners, the answer may simply be that they want to retire and profit off of their work. Furthermore, maybe they lost the desire it takes to run a business full-time. However, there are many concerning reasons why a restaurant owner would want to sell their business. This includes increased crime in the neighborhood, construction issues, or problems with neighboring businesses. Each of these issues could be detrimental to the success of your new business. Thus, make sure you inquire about their reasoning before buying or selling a restaurant.
A quick tip is to ask is if the owner or any partners or the selling party would be willing to train you or your staff for a few months after the transaction has occurred. Antonoplos & Associates has helped several entrepreneurs work through selling or buying a restaurant. Our goal when entering into a business relationship with a restaurant is to resolve potential issues before the deal closes. Let our firm help guide you through this transition, whether you are buying or selling a restaurant.