The negotiation process plays a pivotal role in any restaurant sale. Not only do negotiations influence your final selling price but they also determine important terms and conditions that can impact the outcome and timeline of your sale.
If you’re considering the sale of your restaurant or franchise, it’s crucial to understand what you can expect from this part of the process – and more importantly, why choosing the right professional support for your sale will be key in securing a favourable result.
Let’s take a closer look.
If you’re planning on selling a restaurant, you’ll want to familiarize yourself with some key commercial real estate terminology before you head to the market. Click here to learn more.
Start With an Expert
Before getting into the specifics of negotiations, it’s important to highlight your number one resource as a restaurant owner who is interested in selling – a restaurant real estate agent.
Here’s the deal. Commercial real estate is a nuanced industry, and, as a specific subsect of the commercial space, restaurant real estate is also highly specialized. As a restaurateur, achieving the smoothest sale possible (with a lucrative result) requires guidance from someone who understands these types of transactions like the back of their hand.
If you choose to sell with a residential agent, or commercial real estate broker who isn’t well-versed in the specialized nature of restaurant sales, you could have a serious disadvantage in landing the best deal for you.
Looking to sell your restaurant? Explore these related blog posts for helpful tips.
- How to Present Your Restaurant for the Best Sale Price
- Why You Should List With a Business Broker
- Selling a Restaurant in Ontario: 5 Things to Know
Restaurant Sales – Who’s Involved?
One of the factors that make restaurant sales more complex is the sheer number of people involved. As with any business transaction, there are often multiple stakeholders to loop in. In addition to the primary buyer, your sale could see you (and your agent) working with various lawyers, investors, franchisers, franchisees, brokers, and more.
Zooming in on the negotiation stage, if a transaction involves a multitude of players, things can get intricate in a hurry. Once again, working with a specialized restaurant real estate agent will help make the process more efficient.
A Closer Look at Negotiations
Like the transaction as a whole, restaurant negotiations are multifaceted. Keep in mind, no two restaurants are exactly identical. As a result, there’s no pre-set template for what may be on the table during negotiations.
Instead, your agent restaurant real estate will leverage their industry-specific knowledge to ensure your interests are protected regardless of how the variables may shake out.
Stages of Negotiations
Preparation: Given the complex and lengthy negotiation process, you’ll want to start getting ready as soon as possible. Your agent will help you gather and organize relevant property information, including financial statements, lease agreements, and property condition reports, to present a compelling case to potential buyers.
Initiating Negotiations: Speaking generally, negotiations begin once the buyer submits a letter of intent (LOI) outlining the proposed terms and conditions of the sale. This document serves as a preliminary offer and initiates negotiations.
Due Diligence: During the due diligence process a potential buyer will have a look over the essential documents you’ve provided. They’ll mull over your restaurant’s legal, financial, and physical health to gain better insights about their potential purchase.
After the buyer has an idea of the property’s condition and revenue streams, negotiations will become more specific. I.e. the terms and conditions will become closely tailored to the property itself and the needs of the buyer.
Want a better return on the sale of your restaurant or business space? Dive into these blog posts for unique value-adding tips.
- How to Stage Your Restaurant For Sale
- Do I Need to Market My For-Sale Restaurant?
- Selling a Restaurant: Where to Start
Maximizing Your ROI
While important, negotiations are really just one piece of the puzzle when it comes to selling your restaurant.
If you’re looking for a high-performing team of restaurant real estate agents who can not only guide you through a painless sale but also maximize your ROI, Carve Real Estate can help. Our comprehensive, end-to-end approach ensures you sell for top dollar without getting lost in the process.
Want to sell your restaurant with an experienced team of industry experts? Look no further than Carve Real Estate. Click here to send us an email.
