(Blogger´s Note: There was a problem with Constant Contact yesterday. If you didn´t read Wednesday´s blog please read it now as it goes with today´s. We apologize for the inconvenience.)
Although two of the most common paths to restaurant ownership are to either buy a restaurant that’s for sale or lease a space, remodel and begin anew, there is a third option: buy a restaurant that isn’t for sale. Thought by many to be too time consuming, this approach offers many advantages. And, if done with good intentions both the buyer and the seller win at the game.
There are only two driving forces in what makes someone want to sell a restaurant. Either the business is fantastic and is worth a lot or the business is a disaster and isn’t worth a dime.Currently, both of these types of restaurants are on the market in various cities across the country. However, in order to buy a restaurant that isn’t for sale you must find the buyer who has not made a decision to sell yet. This is the guy who is still searching for the "bail-out weekend”, hoping that business will take an abrupt turn-around and everything will be fine in a week or so.
Naturally, this seldom happens. It is difficult to correct a tailspin in a restaurant no matter how much money, creativity, and ambition you have.
As the buyer, your job is to find restaurants spinning out of control that you think you would like to own. Remember, you are looking at space. Pay no attention to the actual concept, you will remodel that. Spend a few nights a week there. Become a regular. Watch the crowd, the wait staff, the traffic on the street, and the other restaurants in the neighborhood. If they are all constantly slow, find another space, quickly. The demographics are bad and you will be in the same situation as everyone else in a short period of time. But, if some eateries are packed, you have found your target.
Once you are known as “a regular” ask your waitress questions about business, the owner, and find out how the kitchen staff is doing. Disgruntled? Happy? Hard working? All of these are items that will help you when you present your package. They are all signs of what the owner deals with daily.
Once you have established the good points and bad points of the restaurant try to have a meeting with the owner. Have a mental plan with some points in mind on how to proceed. The owner may have no idea on what to do in order to escape the dilemma he operates in.
Let him know that you are interested in acquiring his business and that you would like to develop a proposal for him to look at if he has any interest in selling. At first he will claim it is out of the question, that everything is fine. However, if you have done your homework, within weeks you will get a call for another meeting and the negotiations will begin.
When I bought my first real restaurant, (the other two were grocery stores), I scouted the Wayzata Tea Room for six months. I would stop in on a Friday evening a do a customer count. I would ask to see the chef. I would go there for lunch. Basically, I was a culinary stalker. My wife thought I had crossed the line and was ready to have me institutionalized with the likes of Jack Nicholson in "One Flew"?¦" But, my apparent craziness paid off.
When I finally learned that the owner of the place hadn´t been around for six weeks and that he was contemplating his next move while staying at his cabin in the Minnesota woods I attempted to reach him. When I found out his phone had been disconnected I knew I was on the right track. I went to the phone company and paid the delinquent phone bill at his cabin. When he picked up the phone that had been silent for over a month he was shocked to hear any voice, let alone mine. Two days later we had lunch and one week later I owned my first 50 seat restaurant, closed I and began a remodel.
Theat deal is another story at a later time. Keep in mind, negotiating the deal may not be easy, but buying a restaurant that isn´t for sale is a great way to get into the business. The most difficult task could be paying the phone bill for the guy who doesn´t want to sell.