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 will be to assign or transfer the lease to someone else.

Lease Term – Buyers typically look for a remaining lease period of at least 7 years. When you negotiate your lease term, try to get an initial or base lease period plus several 3 or 5 year renewal options. Many operators try to obtain a lease term, including options, of 15 to 20 years.

Assignability – You don’t want a sale to stall due to an unreasonable landlord trying to withhold approval to extract more rent. While it’s common for assignments to be subject to the landlord’s consent, be sure your lease sets forth parameters as to what constitutes your ability to transfer and that the landlord’s consent cannot be “unreasonably” withheld or delayed.

Selling your restaurant can be one of the biggest opportunities for financial gain you’ll ever have. Make sure your lease is an asset, and not a liability, when you enter into this important transaction.

MARTY BOMBENGER…the “Miami & Florida Keys Restaurant Broker” 305.310.1982

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