“The Smoking Log”

What Is a Typical Restaurant Business Worth?

Posted by on May 29, 2013 in "The Smoking Log" | 0 comments

What Is a Typical Restaurant Business Worth? The worth of a restaurant is predicated on what someone will pay to buy that restaurant. As restaurants come in as many shapes and sizes as do their owners, determining worth is complex. In the most general terms, value can be established through either a multiple of annual sales or by its assets. Restaurant Categories Restaurants fall into two major categories: full-service and limited-service (or quick service). Then there are many subcategories such as, fine dining, casual dining, dinner house, bar & grill, deli’s, fast food, pizza...

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Selling a Failing Restaurant

Posted by on May 29, 2013 in "The Smoking Log" | 0 comments

In the current economy, many restaurants that once thrived are sadly no longer able to sustain a positive cash flow. However, the good news is that selling a restaurant that is operating under a loss or poor revenues is possible. The biggest barrier to entry in the restaurant industry is the initial build-out costs. If your restaurant has a functioning hood, flood drains, three part sink and a permitted refrigerator unit, then your restaurant will sell. If you have a liquor license, your restaurant will sell for more! The most common obstacles to selling your restaurant are: 1. The price you...

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How Much $$$$ SHOULD Your Restaurant Be Making?

Posted by on May 29, 2013 in "The Smoking Log" | 0 comments

My speaking and consulting work over the past several years has given me the opportunity to meet literally hundreds of independent restaurant operators from all over the United States and Canada. Frequently, I find myself in a conversation with an operator that goes something like this. “I own a restaurant and my food cost is around XX%, my labor is running XX% or so and my rent is $X,XXX per month. How are we doing with a net income of XX%?” Obviously I don’t have enough information (or time) to make an intelligent response, but to get the operator thinking in the right...

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When Should You Start To Plan For Selling Your Restaurant?

Posted by on May 28, 2013 in "The Smoking Log" | 0 comments

Before you open. That’s right. You should be thinking about the eventual sale of your restaurant in the earliest stages of your startup and in particular when you’re negotiating your lease. Your lease will either be an asset or a liability during the operational life of your restaurant and will directly impact the sales value and your ability to strike a favorable deal when it comes time to sell it. Whenever a restaurant is sold, two of the most important provisions in a lease, besides the rental rate, is the number of years remaining on the lease and how easy or difficult it...

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Restaurant Failure Rate Study

Posted by on Apr 5, 2013 in "The Smoking Log" | 0 comments

Restaurant Startup & Growth magazine commissioned survey indicates a “23%” first year restaurant failure rate. Dallas is considered one of the hottest restaurant marketplaces in the country. There are more than 6,000 restaurants within a 30-minute drive time of central Dallas, and according to the National Restaurant Association, Dallas/Ft. Worth ranks second in per-capita spending on food away from home. What do you think restaurant failure rates are in this Lone Star metro? Restaurant Startup & Growth (RS&G) commissioned Cline Research Group (CRG) of Dallas to...

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Restaurant Failure Rates Recounted: Where Do They Get Those Numbers?

Posted by on Apr 5, 2013 in "The Smoking Log" | 0 comments

For centuries, conventional wisdom held that we live on a flat planet. The Earth was believed to have been shaped roughly like a circle, with the oceans plunging over its edge, creating dreadful currents that would send hapless sailing vessels plummeting beyond the boundaries of the mortal world. Many believed that when Christopher Columbus set sail for the New World, the explorer and his crew would never be seen or heard from again. The Nina, Pinta and Santa Maria and their crews would simply disappear into the abyss. The rest, shall we say, is history. One hundred and forty years later,...

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